Stripe is a software startup founded by two young brothers from Limerick offering payment systems for websites – and it’s attracting a lot of attention in the US. Here John Gleeson looks at the startup’s manual for success.
IN THE LAST three years there has been a significant change in the startup ecosystem in Ireland. Programmes such as Endeavour.biz, Launchpad, Hothouse and Propeller have reduced the friction involved in getting started and the government are now pro-actively trying to keep the best technology start-ups here. A few slip through the cracks and some just want to move, but for the most part the situation is much improved.
That is why it is unfortunate that Ireland’s most promising startup is already in Silicon Valley. Stripe.com may have ultimately decided to setup in the US, but rejected applications for funding from government agencies and complete dismissal by Irish banks didn’t help. For those of us who read a lot about technology, the day that Stripe has its IPO feels strangely inevitable. There are no sure things in technology startups and a lot can go wrong quickly, but I would be slow to bet against Patrick and John Collison. Here are the reasons why:
1. The founders are exceptionally smart
Patrick won the Young Scientist of the Year Award when he was sixteen and John got the highest score in the history of the leaving cert in 2009. They have been programming from a young age and are exceptionally talented hackers as well as being academically strong. Not only that, but the smartest guys in Silicon Valley agree that they are exceptionally bright.
2. Paul Graham, Peter Thiel, Elon Musk, Max Levchin and Marc Andreeson
These are not household names in Ireland but they are some of the most well respected technological minds in Silicon Valley. Not only did they all put money into Stripe without much hesitation, some invested at levels that are untypical for their portfolio. They all believe these guys are not only smart, but can execute on a difficult problem.
3. They can execute
Before John and Patrick had been accepted to MIT and Harvard respectively, they had already created and sold an online startup based on optimizing eBay for power users. It only took 10 months for the company to be acquired and although they both went to start in US colleges, the startup bug had bitten them.
4. Their team is extremely strong
By all accounts there are no weak links in the Stripe team. While most start-ups need to worry about getting smart and hard-working people, this is the baseline at Stripe. Their primary concern when hiring is that new employees are ‘incredibly nice’. To judge this, they consider whether they would be happy to come into the office on a Sunday to work as an excuse to spend some time with the new hire. In a market where it is notoriously hard to find good developers, they turn away people who are just smart and hardworking.
The team are so focused on the details that it draws comparison with how people describe the culture in Apple’s hardware design team. They really care about things that other companies might dismiss as trivial, and that is a powerful advantage when combined with an ability to get things done. There are perfectionists, those who get things done and everything in between. Very few companies rank highly both in attention to detail and execution.
Reading about the company makes me think of Paul Grahams line in his 2005 essayReturn of the Mac. To paraphrase his thoughts on early adopters; ‘Whatever hackers are using now we’ll all be using in 10 years’. He used the Mac as an example. Admittedly Stripe is a software company, so the analogy isn’t exactly the same, but hackers in the US are moving to Stripe in large numbers. Stripe will hopefully come to Europe in the future and I’m sure they will have an Irish office.
Maybe predicting an IPO for a team of 15-20 seems premature, as only a tiny percentage of startup companies ever reach this level. But only a tiny number of companies have the combination of factors I have mentioned above.
The odds that a startup that has some financing will ever reach an IPO in the US are very long. But if you offered me an even money bet that Stripe won’t ever IPO, I wouldn’t take it. These guys are not only clever, resourceful and hardworking, they are arguably the most promising early stage founders in the US, and they are from Limerick.