Building Stripe
💡JCNews #61
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In JCNews, I share the articles, documentaries and books that I enjoyed the most in the last week, including a must-read.
Let’s talk about this together on LinkedIn or on Twitter. Enjoy!
💡The weekly must-read
Each week, I share with you a must-read which you chose.
👉 Patrick Collison and Stripe’s building (The Knowledge Project #32)
The type of people to hire for a start-up (start-ups are extraordinarily hard, and we don’t say it enough):
People we hire [are] people who are seeking correctness and who don’t mind being wrong and who are willing to at least contemplate things that seem improbable or surprising if true or really divergent [from] that which is the generally accepted status quo. [...] We look for that combination of openness and rigor.
The cliché, of course, is that startups are extraordinarily hard, and they just are. You want somebody who is at a stage in their life where that’s the kind of challenge they want, where the fact that the particular area in which they’re going to be working is undefined or significantly under-built-out or significantly broken
There are always plenty of reasons your idea could be a bad idea, you need to find what makes it great:
This was a crowded market, there were tons of existing incumbents, there were significant regulatory and partnership/institutional barriers to entry. We had no experience in the domain. We were very young. [...] We had no obvious mechanism for gaining significant distribution, and we were not a naturally viral product or one with an organic adoption the way maybe a social network or a consumer product might have. I think a lot of people very reasonably thought that Stripe was a bad idea or us pursuing Stripe was a bad idea, and they certainly didn’t hesitate to tell us that.
It is very important to start small:
The prototype was going to build up on top of existing payment systems, and so it didn’t do anything overly ambitious.
How to make a decision in fast-moving environments:
You’re often making decisions that have significant long-term impact, or that are at least difficult to reverse or to course-correct, in the face of great uncertainty. “We could have less uncertainty, we could take steps to mitigate that, but we just don’t have time to.”, constantly trying to balance exploration and exploitation
I now just place more value on decision speed. If you can make twice as many decisions at half the precision, that’s actually often better. Make more decisions with less confidence but in significantly less time. And just recognize that in most cases, you can course correct and treat fast decisions as a kind of asset and capability in their own “I think one deep mindset difference in people is often right” [One should] not treat all decisions uniformly. I think the most obvious axes to break them down are degree of reversibility and magnitude.
How to allocate resources, and make bets:
Roughly speaking, we invest most of our effort— [...] 70 or 80 percent—in optimizing that which we already have, that which we already know is producing returns. And then some fraction of the work and the distribution of bets skew… but some fraction of the work, let’s call it 20 percent, into things that are more speculative.
We’ve tried to shift into a model where it is somewhat less uniform In certain teams, less optimization of what already exists is going to be required; it’s going to require more exploration. And in other parts of the company it could be tilted in the reverse direction
The question is just: which things just seem like a good bet? In most cases, the downside cost is not that large, either in terms of direct financial cost or in terms of the potential broader damage to the organization, whatever form that might take.
How the organization should share their objectives:
Having different parts of the organization write down what they’re optimizing for essentially. Like what their mission is; what the long-term key metrics are for their part of the organization; who their customers are, either internally or externally.
Misc.
A [...] thing worth pointing out is the line from Basho, the Japanese poet, that you shouldn’t follow the people you most admire but you should follow what they admire. I try do that. I really enjoyed [...] A Culture of Growth by Joel Mokyr, a book about [...] enlightenment and the industrial revolution,...
More content on Stripe? In JCNews #55, I shared other key principles John Collison (Stripe’s other cofounder) followed to build the company. Fascinating!
🏯Building a company
In addition to selected articles, I share one of Alan's leadership principles each week - the same one I share internally and with our investors every Wednesday.
👉 At Alan, we do not tolerate brilliant jerks (Healthy Business)
We treat each other with the same respect and humility that we bring to our business. We want to work in a company of deeply good people who treat their colleagues exceptionally well. No matter how talented, we won’t hire or keep people who behave like jerks.
Alaners are high performers, but it doesn't mean they will brag about what they've done or diminish what other people would do.
It is key to maintaining a great atmosphere in our fast-moving and challenging environment. Some examples of behaviors that we don’t accept: (i) Bad-mouthing other Alaners (ii) Using your authority over other Alaners to force a decision
Bottom line, leadership at Alan is about excellence AND making it really easy to work with you.
👉Being Smart is Not Enough, you need to spread knowledge (fs.blog)
One point he makes is that it’s not enough for a species to be smart. What counts far more is having the cultural infrastructure to share, teach, and learn.
Instead, you’d want to pair Geniuses with Butterflies—socially attuned people who are primed to adopt the successful behaviours of those around them.
👉 Doing Old Things Better Vs. Doing Brand New Things? (a16z)
New technologies enable activities that fall into one of two categories: 1) doing things you could already do but can now do better because they are faster, cheaper, easier, higher quality, etc. 2) doing brand new things that you simply couldn’t do before. Early in the development of new technologies, the first category tends to get more attention, but it’s the second that ends up having more impact on the world.
What’s even more exciting are the new things you simply couldn’t create before, like internet services that are owned and operated by their users instead of by companies. Another example is business productivity apps architected as web services.
Entrepreneurs who create products in the “brand new things” category usually spend many years deeply immersed in the underlying technology before they have their key insights. The products they create often start out looking toy-like, strange, unserious, expensive, and sometimes even dangerous.
🗞In the news
📱Technologies
👉 News about social networks (Platformer)
Dispo is an invite-only social photo app with a twist: you can’t see any photos you take with the app until 24 hours after you take them. (The app sends you a push notification to open them every day at 9AM local time: among other things, a nice hack to boost daily usage.)
Facebook, Twitter, and other big companies pledged that 25 percent of their leadership will be women and underrepresented minorities by 2025. A welcome and overdue step.
LinkedIn is developing a marketplace for freelancers. With 740 million users, it would appear to be poised for success.
👉 The end of gated app stores? (Platformer)
A North Dakota bill would require Apple to allow alternative app stores and payment systems. The bill, which would also apply to the Google Play Store, comes amid Epic’s lawsuit and growing antitrust scrutiny of the app store duoply.
🏥 Healthcare
👉 Food as medicine (Out-of-pocket)
Geisinger (which is both a payer and provider) launched a Fresh Food “Farmacy” to prescribe food to diabetic patients from a pantry it ran along with diabetes management classes, pharmacist access to manage medications, etc. The outcomes for the pilot saves nearly $200K per patient per year relative to $2,400 spent.
We can actually improve outcomes literally by giving patients the right food. How do we make it easier for the doctor to “order” food for patients?
The easiest way to do that is for the provider to actually own and run the pantry/grocery store because then the integrations you need are minimal.
One interesting area to watch is Medicare Advantage, which can now cover meal benefits in their supplemental benefits and is on the hook financially for a patient’s whole health. The meal benefits supplement seems to be growing quickly.
If you imagine a world where ordering meals at home becomes more frequent over time thanks to food product/delivery costs going down, then having something like a unified health record being able to track all of those orders in one place would make meal tracking passive.
Companies like Levels have healthy people tracking their blood sugar.
Food can give healthcare companies reasons to have consistent and frankly more ordinary touch points with patients.
This is exactly where dieticians can play an important role -- especially because the engagement with the patient looks extremely different vs. a regular visit with your doctor.
The integration of food in healthcare is most critical when it comes to kids, because that’s when habits and taste are getting formed.
💚 Alan
👉 [French] Scale-up Europe (Le Figaro). I took part to the kickoff of the #ScaleUpEurope program on March 4th; until June, I’ll be working on initiatives about winning the battle for startup talent. I was very happy to share first ideas with Roxanne Varza (Station F Director) and Ersilia Vaudo, ESA’s Chief Diversity Officer (Youtube).
👉 [French] Ministers at Alan’s Office (Twitter). We were very happy to welcome Mrs. Élisabeth Borne (Minister of Labour) and Mr. Adrien Taquet (Secretary of State for Child Protection) last Thursday at the office for the launch of a mission on improving work-life balance for employees.
🙍 Featured in this newsletter
Patrick Collison 🇮🇪 Co-founder and CEO, Stripe | Twitter
Chris Dixon 🇺🇸 General Partner, Andreessen Horowitz | Twitter
Casey Newton 🇺🇸 Founder, Platformer News | Twitter | LinkedIn
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Great as usual!