How Two Brothers Changed Online Transaction
Amazon, Uber, Lyft, Airbnb, Spotify, Salesforce, Postmates, Microsoft, Slack, Kickstarter, Indiegogo, all use a similar method of payment that operates quietly in the background which would not show up on your credit card bill. The company started by two teenage brothers from Ireland: Patrick Collinson and John Collinson reshaped the digital economy, Stripe has taken the business world by storm
The brothers found school boring but loved reading, a habit they developed after watching their parents. Boy’s school was a 40-minute drive from home, because of the long drive; they often found themselves deep in a book. After classes, they would hit the library and get books that they would read at night. These books would make their way at the dinner table, the family’s discussion would revolve around the latest trends in science and technology. After reading books on the internet, Patrick’s curiosity about this new world grew and he borrowed a book on programming, with skills in programming he built his first website.
Patrick at 16 would often hack John’s website, teaching him the importance of maintaining a safety standard. Patrick went to MIT while John was still in school, it was at this time when he decided to get started on a company called Shuppa- shop in Limerick, the idea behind Shuppa was to build a better version of eBay. However, enterprise Ireland did not allocate funding to the company, prompting him to move to California. After applying to Y Combinator, which provides early funding for startups, he and some partners launched Auctomatic. He moved to an apartment in San Francisco, raised angel funds, and went to work. The move to San Francisco was possibly one of the most valuable assets
“Having all these other people building startups and having them want to help us because we were a fellow YC company, that was super valuable for us.”-Patrick Collison
On Good Friday of March 2008, Collison, at nineteen, and his brother, at seventeen, sold Auctomatic to a Canadian company, Live Current Media, for $5 million.
After selling Auctomatic, they started to work on Apps, as they were working they saw a pattern that kept interfering in their work. Accepting payments on the web, it was harder to accept payments on the web than to actually create a program. At the time other companies were either building their own system for process payment or using Paypal which took the user to a different page for processing a payment, and also came with too many regulations and setup fees. They asked themselves that ‘why should they work on a problem few care about? When they could fix a problem, that could solve world’s infrastructure’. Patrick discussed the idea of an online payment method with his brother, and his brother reportedly said “YA, let’s do it, how hard could it be?”. After John dropped out of Harvard, the brothers went to the Y Combinator and managed to receive $20–30k.
They finally launched Stripe in September of 2011, the early product took about 2 years to perfect, with the launch came 50 users, working for two years and acquiring 50 users was not the most exciting feeling. However, having a slow start turned out to be extremely useful for them. In the early days of stripe, they would often call every user separately and ask, how they could improve their service. If an issue would come, they would open their laptop and start to fix any bug right away, and deliver a quick to the user saying that their issue has been resolved. The quick response would make customers happy, and in turn, through word of mouth Stripe, started to get more users.
After meeting Peter Thiel, the co-founder of PayPal offered his insights into the payments market. He also offered to invest $2 million. With Thiel, came other investors including Michael Moritz of Sequoia Capital, Andreessen Horowitz, and SV Angel. In total, the brothers were able to raise $18 million. Roughly about 18-months after launch, the first designer joined them at the office in downtown Palo Alto, in order to get big, they decided to hire.
By July 28th, 2015 Stripe announced a partnership with, Visa. Stripe was aiming to make it easier for developers to add a payment processing method. Developers who switch to Stripe notice the difference immediately. For starters, installing Stripe only requires copying and pasting seven lines of code. A process that once took weeks could now happen in a single day.
There are two major reasons for the success of stripe, one focus on making developer’s life easier, and two, word of mouth. Consistently asking for feedback from customers ended up being critical. Today, Stripe employs 2000+ employees, millions of businesses in more than 120 countries use Stripe for payment. With rates of 2.9% plus 30 cents for every successful transaction, Stripes’s future seems bright.