In a truly digital age, shopping often no longer means piling into the car and scouring the shelves for goods that may or may not be in stock. Every day, Americans spurn traditional brick and mortar stores and spend about $1.2 billion online; a number projected to double in under 5 years, according to the Department of Commerce. With a few clicks, consumers can have almost any product imaginable delivered to their doorstep in as little as a day, but the payment systems used by many of the most popular websites are too outdated and slow to efficiently handle the increasing traffic. Financial technology has not kept up with demand for online services, presenting challenges for up-and-coming web-based businesses jumping through hoops to set up their e-commerce systems, and opportunities for those with the technological know-how to create elegant solutions for fast, reliable online transactions.
The answer to e-commerce’s efficiency problem arrived in 2010 when two Irish brothers decided that even financial giants like PayPal did not provide the infrastructure needed to put startups with fewer resources on the same level as multimillion-dollar corporations in terms of speed and service. Patrick and John Collison, from the picturesque village of Dromineer, Ireland, are lifelong high-achievers who dropped out of MIT and Harvard to pursue creating innovative technology solutions. Their first startup, Auctomatic, which manages eBay auctions, sold for $5 million in 2008, and in 2009 they began brainstorming their next big idea in an office across the street from PayPal’s old facilities in Palo Alto. That idea became Stripe.
Stripe: Changing How the Web Does Business
Stripe is a simple, intuitive system that provides the banking, fraud prevention, and technical infrastructure for processing quick online payments without the red tape associated with setting up a business’s typical financial structure. With just seven lines of code, any website conducting sales can access all the financial resources they need to get paid by their customers. Stripe charges a flat rate of 2.9% plus 30 cents per transaction; a small number compared to the setup, banking, and transfer fees imposed by competitors and traditional banks and credit card companies. “We wanted to make sure that we only make money if you make money.” Patrick Collison says. “It’s a messaging challenge for us to explain to people that they’re paying more for their credit card processing then they think.”
The idea took off in the entrepreneur and startup communities via word-of-mouth, and between 2016 and 2018 the company’s worth ballooned from $9.2 billion to about $20 billion. Stripe is estimated to handle $50 billion in commerce annually, and its yearly revenue tops about $1.5 billion. Its users include giants like Amazon, Lyft, and Facebook as well as about 100,000 other businesses, from tiny startups to websites processing hundreds of thousands of transactions each day.
Not content with simply building an infrastructure, the Collison brothers have continued to expand Stripe’s services and make constant adjustments to keep up with evolving technology. The company hopes to sell add-ons to its larger clients, bolstering its bottom line and adding value for users and is in talks with companies like Target and Under Armor to establish a presence in select physical stores. Stripe’s aim is to “increase the GDP of the internet,” and to level the playing field for startups trying to make a name for themselves in the competitive online marketplace. “The themes we’ve talked about since the beginning are creating opportunities,” Patrick Collison says, “and trying to accelerate the progress of tech in the world around making incumbency less of a competitive advantage.” With Stripe, mom-and-pop shops have access to the same financial technology as behemoths like Amazon, eliminating one of the major barriers to starting a new business. “We think giving two people in a garage the same infrastructure as a 100,000-person corporation—the aggregate effects of that will be really good,” Patrick says.
Atlas: Creating Global Commerce Opportunities
As immigrant entrepreneurs, the Collison brothers are aware of the challenges involved with launching a U.S.- based startup. Foreign entrepreneurs dreaming of owning a U.S. company typically are required to make costly trips to the U.S. over several months to perform basic tasks like registering an LLC, opening a U.S. bank account, and connecting with lawyers and tax experts to help with the process. Stripe’s Atlas program bypasses these steps, allowing foreign entrepreneurs to start fully legitimate corporations and LLCs registered in the state of Delaware.
Atlas has signed hundreds of international startups from over 130 countries since its launch in 2016. Companies around the world desire the clout and legitimacy that comes with being a U.S. business. It opens doors to becoming a globally-recognized company and streamlines the process should the business owner decide to move forward with applying for a business immigration visa. Users call Atlas’s service “friendly,” and “seamless,” and recommend it for those with “zero legal or financial experience” in the U.S. For those unfamiliar with the complexities of U.S. tax law, Atlas is worth its $500 base-cost several times over.
A Family of Achievers
The Collisons are immigrants with entrepreneurship in their blood. Born in Limerick, Ireland, the brothers settled in Dromineer, where their parents started their own businesses after spending years in the scientific community as an electrical engineer and microbiologist. Their mother ran a corporate training company from their family home, while their father operated a 24-bedroom hotel. For Patrick and John, their parents’ impressive backgrounds and drive to become entrepreneurs was not so much an anomaly as something they grew up expecting to do themselves. “Entrepreneur is a long, fancy French word, but it didn’t seem like something you aspire to,” Patrick says. “It seemed normal because whatever your parents do seems normal.”
Global Outlook, Day-To-Day Focus
Many of the brothers’ decisions can be boiled down to the understanding that life is short and wasting time won’t result in a life well-lived. They run marathons, fly planes, and paid to have one of Patrick’s favorite books, the out-of-print The Dream Machine, reprinted so that their employees could enjoy it too. Patrick keeps a countdown of his approximate remaining lifespan on his desk, and both he and John travel extensively, with a focus on technologically-underserved countries like Israel and Palestine, to meet investors and other entrepreneurs and learn about how Stripe can help their businesses.
Because of their upbringing in remote, rural Ireland, the brothers relate to the many challenges entrepreneurs in isolated areas and economies face, and the struggles they experience while building businesses and trying to attract investors and customers. Stripe is dedicated to offering a truly universal service, and when the brothers realized that PayPal is available for Israelis, but not Palestinians, they decided they would not discriminate, stating: “Stripe wants to expand its business in Palestine, and anywhere else entrepreneurs need help…We are drawn by places that the rest of the world tends to underestimate.”
“So Much Left to be Done”
Like many immigrant entrepreneurs, Patrick and John Collison maintain a stunning level of humility and willingness to learn from experiences. They seek out opportunities to grow by connecting with others and helping them reach their goals and simplify their lives so that they have more time for the things that matter. Their outside perspective as immigrants allows them to approach Stripe differently from how many native-born entrepreneurs would. Mike Moritz, a Stripe board member, says “They’re more humble and well-rounded (than other Silicon Valley CEOs). There’s such an improbability to their story—that these brothers from a little village would come to build what could well be one of the most important companies on the internet.” Patrick expressed in a podcast that he feels that Stripe will never be a completely finished product. “There’s nothing like a young company to every morning remind you that there’s so much left to be done…” he says. Stripe will evolve alongside the internet, embracing new technologies and anticipating users’ needs, and the Collison brothers will continue enabling and inspiring entrepreneurs in even the most far-flung corners of the world by giving them access to the technology they need to succeed in today’s competitive online economy.