Stripe: Patrick and John Collison Brothers Patrick and John Collison founded and sold their first company before they turned 20. They created software to help eBay users manage inventory online, which set them on a path to help make e-commerce frictionless. Today, John and Patrick are the founders of Stripe, a software company that uses just a few lines of code to power the payment system of companies like Lyft, Warby Parker and Target. Plus, for our postscript "How You Built That," how Robert Armstrong turned his grandma's cookie recipe into "G Mommas," buttery, bite-sized pecan-chocolate-chip cookies that are now sold in stores across the Southeast U.S.
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Stripe: Patrick and John Collison

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Stripe: Patrick and John Collison

PATRICK COLLISON: We built the first prototype back in October of 2009, and it really was apparent to us that it kind of wouldn't be easy - like, it was not going to be possible for it to be some sort of, well, you know, we code furiously for two months. We launch this thing. And then it's off to the races. Like, from when we started working on it full-time to when we publicly launched was almost two years. And so, yeah, going to be hard, but it is actually possible.



From NPR, it's HOW I BUILT THIS, a show about innovators, entrepreneurs, idealists and the stories behind the movements they built.


RAZ: I'm Guy Raz, and on today's show, how two brothers from Ireland wrote seven lines of computer code and built it into a $9 billion business.

So the Holy Grail for a venture capitalist is the elusive unicorn. This is what hundreds or thousands of business school graduates working at venture firms search for every day. They sit through pitch after pitch, PowerPoint after PowerPoint, hoping that today will be the day that one of these pitches will be the next WeWork or Uber or Airbnb - an opportunity so rare, so coveted, it's like a unicorn.

Well, welcome to today's story because Stripe is basically a unicorn with extra whipped cream and cherries on top. This was a company that went from zero to $100 million in value in a matter of months. And today, barely seven years after its founding, Stripe is valued at more than $9 billion. So now your next question - what is Stripe?

Well, Stripe isn't a thing you buy. It's not like Under Armour shirts or Warby Parker glasses, but it is what allows you to buy those things online. If you use Instacart or Lyft or Kickstarter or even if you shop online at Target, you're using Stripe. It's basically the back-end technology that allows you to safely enter your credit card details and pay for what you want.

And there are two things that make Stripe very different from its competitors. The first is its simplicity. It was originally just seven lines of code. And the second - the ages of the two brothers who founded it. When Stripe launched seven years ago, Patrick and John Collison were just 23 and 21 years old. The Collison brothers grew up in rural Ireland in County Tipperary, where their parents ran a small hotel.

P. COLLISON: Very small - it had 12 bedrooms when we bought it. And we got a house maybe a mile or two away. And so we grew up surrounded by farmland. You know, the options were to play in the garden - and did a lot of that - and to play with Lego - we did a lot of that - and to read books. And I look back at it very fondly.

RAZ: So your dad was running this hotel. And were you guys involved with it at all? Like, did you have to go there on the weekends and, like, change sheets and, you know, mop the floors?

JOHN COLLISON: Well, remember - you know, I think I was - Patrick was probably 4 when they started. I was 2. And so, you know, there's only - you know, a 2-year-old can only be so useful in the operations of the hotel. I think my favorite memory is the - you know, the ballroom floor, the highly polished surface. That was awesome as a kid for kind of getting a - you know, kind of a length game in terms of who can slide the furthest. But much in all as I'd like to imagine that we were extremely useful in running the hotel, I think we were primarily a hazard.

RAZ: Yeah. How did you guys get into coding? How did that happen?

P. COLLISON: I bought a book when I was 13, and I read it one Saturday and started writing some webpages. And really, it was all sort of - it was all downhill from there.

RAZ: And how about, you, John? Did you - like, seeing Patrick get into coding, did you think, hey, I want to try that, too?

J. COLLISON: Yeah, that was definitely an influence. And I think I had an experience that a lot of people I know who've learned to code had, which is it's often an end result that pulls you along. And you're making everything up as you go, and you don't really understand. You know, you're copying things from a book or from a website and typing them into a computer to get it to work. And it seems like the two big motivations that people often have are websites or video games.

RAZ: Yeah.

J. COLLISON: And so in my case, the initial website I made was not very good. After I had built it, Patrick taught me a lesson in security. You know, I was probably 14 at the time, and I had cobbled together this website, and there were vulnerabilities and issues and stuff that Patrick then hacked the site just to teach me a lesson on that.

RAZ: So - OK, so, Patrick, I'm going to mention this because you're not going to mention this. In 2005, you won an award - like, the - I think it was, like, the young scientist award of Ireland. You were 15 and - or 16 - or something like that. And I'm assuming - and maybe you weren't cognizant of this - but were - I mean, people must've said, oh, they're the Collison boys. You know, they're those two really smart boys. Were you aware that you guys were just really smart? I mean, did you - were you aware that people were aware of the two of you when you were kids?

P. COLLISON: I don't think they were when we were kids. I think actually this kind of science contest is - that was really the first time where anyone might've had even the slightest cause...

RAZ: Yeah.

P. COLLISON: ...To have kind of come across or heard of either of us.

RAZ: What did you do? What was your invention or experiment or submission that won you young scientist of Ireland?

P. COLLISON: Well, as we sort of touched on, I'd gotten really into programming. And in particular, I'd become interested in this programming language called Lisp. And I was kind of fascinated by Lisp because it had been invented in the late '50s - like, really early in sort of the history of technology. But it'd been kind of forgotten and ignored.

The thing I worked on was sort of a new version of Lisp, trying to kind of update it, making it really straightforward to build sort of complicated web applications and things like that. And, you know, it's funny, it's only kind of looking back on it that this sort of becomes clear. I mean, from a very early stage, I was interested in sort of working on tools or just kind of building things that created leverage for others and that basically, the whole point of working on this programming language was to provide a tool that would make it easier for others to build things.

And so, you know, I didn't consciously think about it this way at the time - you know, kind of starting Stripe or whatever. But basically, all the things that I've worked on, kind of somewhat seriously, have in some ways been kind of tools for creation.


RAZ: So in 2006 after Patrick won the Young Scientist of the Year award, he decided to go to the U.S. to MIT for college. And two years later, John would follow his brother to Cambridge to attend Harvard. But all the while, the brothers were always working and conspiring on ways to solve problems they'd come across on the Internet - for example, why it seemed so hard to buy and sell secondhand things in an efficient way.

So one afternoon while mulling over some ideas at their local pub, Patrick and John came up with a potential solution - back-end technology for eBay users to manage inventory. And they found two other guys who were working on a similar problem. So they joined up with them, moved to San Francisco and called their company Octomatic.

P. COLLISON: What Octomatic did was it made it really easy to kind of manage and to list items for sale on existing platforms - things like eBay or, you know, other marketplaces for selling some of these items.

You could use Octomatic to sort of track your inventory and to upload your items and to manage the listing photos. And so basically, it was a tool for people who were kind of selling significant amounts of stuff online, you know?

RAZ: Right.

P. COLLISON: And so it was software to help those people do that job better. And the idea was that kind of that could help us gain kind of one side of the marketplace such that, over time, we could come and then build, you know, a better user experience for customers.

RAZ: So you guys build this thing. And who was the public face of Octomatic? Because - I mean, obviously, you guys are super smart and talented. But, you know, you were really young - right? - like 18 and 16 years old. So were you guys sort of staying in the background, and were the other founders...

P. COLLISON: The public face was really the website.

RAZ: Right, right.

P. COLLISON: And there's the great line about how, on the Internet, nobody knows that you're a dog.

RAZ: Yes, right, right, right.

P. COLLISON: And you know, we kind of took full advantage of that.

RAZ: But the company must've done pretty well - right? - because I guess, just over a year after you had your original idea, it sold for - reportedly for $5 million. So was it strange to, all of a sudden, at that age, you know, land into that kind of money? I mean, I know you didn't get 5 million yourself. You had to divide it up and stuff. But still...

P. COLLISON: Investors and...

RAZ: Yeah. You still probably walked away with a couple hundred thousand bucks. That was probably more money than you'd ever seen in your life.

P. COLLISON: It was certainly more money than we'd ever seen in our lives, yeah. It was enough money that it afforded a kind of freedom and really, I think, just kind of forced sort of a kind of reflection that, you know, had we been - or had I been - kind of on just the treadmill of, you know, you go to college, and you get your degree, and then it's your first job and so on, such that - I can certainly imagine sort of a different version of, you know, my life or my career, where I didn't do some of that thinking, you know, until I was much older.

RAZ: Yeah. So I guess, this was, like, right around the time you were at Harvard, John. And, Patrick, you eventually went back to MIT for a while, right?

P. COLLISON: That's exactly right - in the fall of 2009.

RAZ: And I should just preface this by saying both of you would drop out and never return. But in that brief moment of time, where, John, you were at Harvard and, Patrick, you were at MIT, is that really - this was around 2009 - is that where the early sort of idea that would become Stripe began?

J. COLLISON: That's an interesting question because on the one hand, Stripe was the most interesting idea we had come across during the course of Octomatic in that it was the single-hardest thing about developing an Internet business - was just the business side or the accepting-money side.

RAZ: The payment side.

J. COLLISON: Yeah. And it seemed like a really important problem. And we thought there should be something really easy focused on developers' instant set up, so that people started - starting accepting money. But on the other hand, what did we know, right? We were these two college students.

RAZ: Yeah.

J. COLLISON: And so maybe the financial system had it all figured out, and we were these impetuous youngsters with the wrong ideas. And so you're trying to figure out in those early days of starting a company or starting a product, are we wrong or is the world wrong?

RAZ: So let me understand - try to understand what - take us back to 2009. I mean, I remember using Amazon and, you know, buying stuff from Amazon. And for me as a customer, it was - seemed fairly frictionless, you know? I'd just hit, you know, click to buy it, and it would be delivered, like, a couple days later.

J. COLLISON: That's exactly it. And I think that's part of why it didn't get solved, is that, as a customer, everything seemed fine.

RAZ: Yeah.

J. COLLISON: And then, you'd talk to anyone who had to run a business, and in particular an internet business, and they would talk your ear off happily about it, I mean, the kind of stories they would tell you. Again, oftentimes they would tell you it was the single hardest thing about getting their business off the ground because the providers that existed at the time - it was often through banks - they were the gatekeepers. They were the people that said yes, you can have an online business or no, you can't.

And so it was a much more important step in that regard. And, you know, it's funny. When we'd go to investors early on for Stripe, they would say, you know, it seems pretty solid. You know, it's 2009. Like, you know, I think we have this Internet payment thing down. And they would do some asking around, and that's when they got us.

RAZ: Right. So you - so if you were starting an Internet business in 2009, when this idea came to you, what - I mean - and you wanted to accept payments. Let's say you had a business selling, oh, I don't know, you know, homemade peanut butter that you would ship to people, it was...

J. COLLISON: That sounds great.

RAZ: ...It was - it was hard - it would have been really hard to set up a way to accept payments through your site.

P. COLLISON: I mean, it's hard to imagine that it could have been the case.

RAZ: Yeah.

P. COLLISON: And, you know, clearly there must be some kind of reasonable answer to this, some, you know, easy-to-use piece of software or something, and we just weren't finding it. But what we came to realize is that because it was financial, that sort of technology companies were very hesitant to go and address it.

RAZ: Why? Why would they be hesitant?

P. COLLISON: Because you have to deal with partnerships with financial institutions and regulation and risk controls and making sure that things are sort of done compliantly, and it becomes, then, very complicated to figure out how to offer that service internationally.

And so the fact that you had to kind of span these multiple sectors and deal with all these kind of different constraints with figuring out a better way to do payments, technology companies startups tended - and still tend, I mean, for understandable reasons - to kind of shy away from thing - from problems that sort of - where you have to solve a lot of hard problems in multiple domains.

RAZ: Yeah.

P. COLLISON: And then, you know, coupled to that was the fact that - I mean, PayPal existed. And I think for a while, back in the early days of PayPal, people thought that, you know, PayPal was going to solve this.

RAZ: Explain for a moment the PayPal thing because I - you know, I've used PayPal, not very often. But I've had, you know, occasions where somebody asks me to PayPal them, and I've PayPal-ed (ph) them. And it seemed pretty easy. So what was the problem?

P. COLLISON: So the basic issue with PayPal was that it's designed for consumers not for businesses. And so if you're building an app, if you're building, you know, a web site, if you're building a new marketplace, something like this, PayPal works OK for sending, you know, $20 from Joe to Jane.

RAZ: Yeah.

P. COLLISON: Where it works much less well is when you want to do this at scale, you want to sort of build an automated integration to your website where you're running a business with it. PayPal just isn't designed for the business-use case. It was built for eBay where you're kind of one-off sending a hundred dollars, manually, from this person to that person...

RAZ: Yeah.

P. COLLISON: ...Whereas, when you're building a business online, where you're, again, integrating this into a website or into an app or something like that, you have a quite different set of considerations around how you do this at scale. And PayPal had not been designed for that.

RAZ: So - OK, so here's what I don't get. You guys were obviously super smart and very good at coding, but what made you think that you could solve these big, enormous problems like regulation and dealing with banks and developing relationships with credit card companies that, you know, Google and Apple clearly felt that they could not resolve?

P. COLLISON: In large part, a healthy dose of the naivete of youth, but, you know, we didn't just leap into it. We built the first prototype back in October of 2009. And then, we basically spent kind of eight or 10 months trying to sort of map out what would actually be required to have this work at sort of, you know, any material scale, what sorts of people we'd have to hire, which sorts of entities we'd have to partner with and, you know, what that would look like.

And so we realized, well, we need to hire, you know, very senior and experienced partnerships people to make sure that we can get sort of first-tier relationships in place with banks. And it really was apparent to us that kind of it wouldn't be easy.

Like, it was not going to be possible for it to be some sort of, well, you know, we code furiously for two months, we launch this thing, and, then, it's off to the races. Like, from when we started working on it full-time to when we publicly launched was almost two years. That's how long it took us to kind of orchestrate all those details that sort of you're describing.

RAZ: Yeah.

P. COLLISON: And - but I guess - yeah. Well, we got a sense, first, that of after - again, that this kind of investigation was, yeah, going to be hard, but it is actually possible.

RAZ: So you guys had a couple hundred thousand bucks from the sale of Octomatic, and obviously you had the coding chops and the technology chops, but you did not have any money. How were you able to get money to, you know, fuel the ambitions of this company?

J. COLLISON: One of the things that Silicon Valley does well is it probably has the hot - you know, Patrick and I now travel to a decent number of other places, and Stripe has offices around the world in Dublin, London and Singapore and places like this. But I think Silicon Valley is probably the best place in terms of the risk tolerance of the investment capital that's available.

If we could get people convinced of the opportunity and if we could show people that initial, early, customer traction and how much it resonated with the target market, they were actually willing to take a bet despite the fact - I mean, when you look back on it, there was a vast amount of uncertainty in every other aspect of the execution between would Patrick and I be able to get visas for the - you know...

RAZ: Yeah.

J. COLLISON: ...For the United States to work here, to would we be able to hire, to what would the long-term, you know, financial partnership structure or things like that look like? But people are willing to look past all of those things to the opportunity.

RAZ: What I'm - what I wonder is when you - I mean, you had an advantage when you - when you started meeting with investors, I'm assuming, because you had already started and sold a business. And a lot of investors love that. They love to see that experience. But did they ask you - were you asked tough questions by potential investors like, for example, you know, you guys are really young, how are you going to manage people? Or you don't have any connections or involvement in the financial industry or - did you get questions like that?

P. COLLISON: Surprisingly, no. I think people are used to that in Silicon Valley. I mean, by the time people become famous because the thing they worked on succeeded, they tend to be older. But I think the mental image we have of people who do successful things is like 10 to 20 years, maybe even more, older than the ages at which they tend to have actually done them, right?

And VCs and investors and just people in general in Silicon Valley, I think, are sort of unusually sort of attuned to this fact and recognize and realize that sort of, hey, really significant work, not only can be done by people in their 20s, but is very commonly done by people in their 20s.

And so, you know, I think that's kind of to their great credit, and, you know, we really benefited from it. You know - this is not to suggest that investors, you know, rushed with enthusiasm to invest in Stripe. Most investors said no, but the reason was much more - reasons were much more because they just thought it was a bad idea, rather than the kind of...

RAZ: Why did they think it was a bad idea?

P. COLLISON: Well, you know, a whole host of reasons. It was going to be a developer-oriented service, rather than going and sort of trying to, you know, run this big kind of expensive sales and marketing campaign...

J. COLLISON: There's already many companies in the payments.

P. COLLISON: Exactly, there's already thousands of companies doing something like this. As you suggested, there were a lot of partnerships that we'd have to navigate and get in place and, you know, those don't tend to be kind of the forte of a startup. And it wasn't clear to them back then, I think viscerally, just how airily the market kind of still was.

You know, we were sort of starting Stripe in the wake of the financial crisis. And it's kind of hard to remember this or kind of internalize it now, but people were actually fairly pessimistic about technology in some ways back then. And that was in part because U.S. investors had really kind of tilted quite skeptical on where technology was going.

And so I think, you know, the kind of - the bear case on Stripe was in part this bear case on technology more broadly, where, well, maybe we've already done all of the stuff that we're going to do.

RAZ: When we come back, how John and Patrick stayed bullish on Stripe and how they finally got it off the ground. Stay with us, you're listening to HOW I BUILT THIS from NPR.


RAZ: Hey, everyone, just a quick thanks to two of our sponsors who helped make this podcast possible. First to Synchrony. Synchrony has the payment tools, technologies and insights to help people realize their own unique ambitions. Synchrony, what are you working forward to?

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DANIEL ALARCON, BYLINE: Hi, I'm on Daniel Alarcon, host of NPR's Spanish-language podcast, Radio Ambulante. Our latest episode is about detained immigrants awaiting asylum hearings in the U.S. For those who pay their bond, many use the services of a company, which promotes itself as pro-immigrant. The truth about that company is much more complicated. Find Radio Ambulante on the NPR One app or wherever you get your podcasts.

RAZ: Hey, welcome back to HOW I BUILT THIS from NPR. I'm Guy Raz. So it's 2010. Patrick has dropped out of MIT. John has dropped out of Harvard. Their parents are not freaking out about this, by the way. The brothers are working full-time on Stripe, and they start to look around for investors. And a lot of investors are saying no. But finally, John and Patrick catch a lucky break when they manage to get a meeting with a pretty big player in Silicon Valley.

J. COLLISON: We had a meeting with Peter Thiel and sort of, you know, just as in this conversation we sort of told him structurally what we saw as being all the kind of major flaws in PayPal. You know, looking back on it, I sort of cringe a little bit at, you know, how impolite a guest I must have been...


RAZ: He was the co-founder of PayPal.

J. COLLISON: Exactly, co-founder and CEO.

P. COLLISON: Really screwed it up.

J. COLLISON: Right, exactly and so, you know, at great length, sort of belabored the point about sort of how they'd gone about things wrongly. But Peter being such sort of, you know, an inveterate contrarian, was quite sympathetic to this case and decided on the spot to make, you know, a fairly material investment of $200,000.

RAZ: So what did Peter Thiel see in Stripe? Like, what - was it just easy to use? I mean, was it the kind of thing where a software developer would be, like, oh, my God, somebody has finally figured this thing out?

P. COLLISON: I think many of the developers were just really glad that someone was finally paying attention to them at all. Now, as it happened, we paid obsessive attention to them, and we were really building for that audience. But the baseline that people were working with was very low. It was not competitive.

I think what changed and what we were fortunate to be a part of was the fact that now for Internet businesses, payment is actually part of the strategy that matters. It's part of the product experience. And so basically I think this used to be a fairly tactical vendor decision for the business where it was just something that needs to be taken care of. And that there was - only downside really, you could make a bad choice, but you couldn't make a great choice. Whereas now, as we've seen with companies like Amazon, like Lyft, like Instacart, they can actually win based on their product experience. And that's new.

RAZ: So - OK, so for people who are nontechnical noncoders - and I will count myself among them - explain how this works. Basically, you're Lyft. And I take a Lyft. And I pay the driver. I just click pay. And I've Lyft - or you guys, I guess, have my credit card.

And so you have to communicate with my credit card company to make sure that they are charging me so then my bank account will be able to pay the credit card company later. Presumably, you also have to pay the credit card company, right? Like, they're taking a cut of your money, too.

P. COLLISON: That's exactly right. So what's happening underneath the hood when you use any business powered by Stripe is, you know, you probably type in your credit card - you probably only type it in once. And then it's saved with your profile...

RAZ: Right.

P. COLLISON: ...For any time you use it in the future. That is securely sent directly to Stripe. So it's not, you know, hitting - it's not being stored on other servers. And then when a business wants to actually, you know, accept money and charge your credit card - and, you know, overtime, it's now more than just credit cards. It's bank transfers and different international payment methods and things like this.

But the business that wants to charge your credit card, they say, hey, I'd like to charge this card $20. And we put money in their bank account. And we handle everything that goes on between that instruction and the money arriving in their bank account.

It's actually pretty complex what goes on under the hood. But, again, our aim is that people did not start businesses so they could deal with the minutia of the financial system.

RAZ: Right.

P. COLLISON: They'd start businesses because they have a vision. And they have a product that they want to get out there into the world. And we want to get them back to doing that. Anything that does not get them jumping out of bed in the morning, you know, we should be able to take off their plate...

RAZ: Right.

P. COLLISON: ...And that, at a technical level, is kind of how it works.


RAZ: Yeah. So my understanding is that it was basically seven lines of code, which, I guess, from a coding standpoint is very simple, elegant. And a developer could just plug that in to the application or site they were developing. And then that was it.

J. COLLISON: That's pretty much it. We have lots of stories of people integrating payments in an afternoon or an evening and then launching their business the next day. And that just worked consistently. That was a big break from how to prevail before.

RAZ: And once you started to gain momentum and you launched in - I guess, you launched publicly in 2011, right?

J. COLLISON: That's right.

RAZ: How did you convince companies to trust this - to work with you? Who was your first big customer client?

P. COLLISON: Well, because we were serving high-potential companies and startups and fast-growing companies, we grew with our customers.

RAZ: Right.

P. COLLISON: And so back in the early - in the very earliest days, yeah, those companies were pretty small. But some of them started to, you know, become pretty big. Like, Lyft and Shopify and so on became customers of Stripe. And, of course, Lyft and Shopify have...

RAZ: Yeah.

P. COLLISON: ...Now become, you know, very successful companies in their own right.

RAZ: And how did you get them to work with you? Did you just meet the people who were working at those companies? And you just developed a relationship?

J. COLLISON: Well, yes. We sort of got to know those people. But, I think, more fundamentally and importantly than that, we enabled product experiences that they wanted to have.

So in Lyft's case, for example, they wanted to not just charge their customers, but they wanted to pay their drivers. And there was no product that enabled a really good driver payment experience. And so we've kind of co-evolved with them to enable the best end-user experience.

RAZ: And your revenue stream was a percentage of every transaction. That was going to - and that is - the way that you get paid.

P. COLLISON: Yeah. We really wanted kind of clarity in the alignment of interests where we would only make more money when the businesses we served made more money.

RAZ: And there's, like, a - I think it's, like, 2.9 percent or something transaction fee - right? - on a transaction, is that right?

P. COLLISON: That's right.

RAZ: Did anybody try to stop you or make life difficult for you - banks or regulators? Because you're dealing with intricate financial regulations and - I mean - and big banks presumably have a big interest in this as could be a revenue stream for them. Like, did - were there people who tried to - or was it just once you started, you just - the momentum was - the wind was behind you?

J. COLLISON: Well, in this department, we really tried to approach things differently to, I think, how technology companies often tend to. Technology companies, I think, often have a sort of go-it-alone mentality. We'll build it all in-house. We'll do it all ourselves. We can do things better than ever in the outside world whereas we thought that Stripe would only be possible and it would only be possible to do it well if we partnered closely with people who had deep expertise and experience in industries that we ourselves were less familiar with.

And so from the very beginning even before we launched, we partner closely with banks. And now we work with banks in many different countries and not just banks but sort of other financial institutions besides. But we really wanted to build Stripe as sort of a, you know, multidecade thing.

RAZ: Right.

J. COLLISON: And if we're going to go and sort of do it that way, we really had to do it right.

RAZ: So as you start to really, you know, launch and develop and get more and more attention, why didn't the competitors come out from the woodwork? Why didn't, like, PayPal or these other transaction companies - Square and stuff - say we're just going to do what they do? Did they try?

J. COLLISON: Well, what we were doing didn't look that important back then. It wasn't the case that sort of we immediately or what we were doing immediately looked like it was obviously working and obviously of major significance. We were, back then, in the eyes of others, sort of working with all these inconsequential little companies and making their lives a bit easier.

But, well, was this mobile payment thing actually going to amount to much? In (unintelligible), were there actually that many developers that would be starting these successful companies? I mean, again, it gets back to this pessimism around technology that kind of exists and prevails around 2009, 2010, and so on. And this is one of the great facts about our industry - is that you cannot turn money into great products as a kind of mechanical operation. If it were possible, there would be many more great iPhone competitors.

RAZ: Yeah.

J. COLLISON: Facebook would have been long since eclipsed by Myspace or Yahoo or Google...

P. COLLISON: Mobile Google apps would be really good to use.

J. COLLISON: Right. And the intricacies of good product, of good design, of good architecture, those can't be trivially replicated.

RAZ: I mean, essentially your competitive advantage was you guys.

J. COLLISON: I think it's an amorphous combination for any of these products. And I don't mean to single Stripe out. For any great product, it's some amorphous combination of sort of the ethos and the culture and the people and sort of the work style and kind of a fingertip sense for the priorities - and all of these things that are just like very hard to copy. I mean, there's sort of a continuum where at one end, you know, you're manufacturing steel. And at the other end, you know, you're manufacturing novels. And in steel manufacturing, sure, you can turn capital into a more better, cheaper, steel. And at the other end, it's very hard to know how you turn the money into kind of better writing. And software is somewhere in between. And I think this is kind of constantly the challenge for people looking to analyze and make predictions in the industry where, again, Google should have beaten Facebook.

RAZ: Yeah.

J. COLLISON: Google had every advantage against Facebook. They had, you know, more people, more money, more distribution, more brand recognition, more of kind of any of the obvious inputs. And yet, somehow there was something missing.

RAZ: When you think of this number - last year, $9.2 billion valuation - does that mean anything to you? I mean, is it abstract? Do you think, man, I'm rich. Or do you even - does it even cross your mind? It must at some level, right?

P. COLLISON: It's been my experience that people pay huge amount of attention to the headline numbers...

RAZ: Yeah.

P. COLLISON: ...Of Silicon Valley companies. And so, you know, Stripe is a company that's been valued in fundraising at, you know, $9.2 billion or what have you. There is an assumption baked in that Stripe continues to execute very strongly. And so it would be a very dangerous mode to slip into to becoming rearward-looking and looking at everything that has happened today because the much more relevant fact is what we release in 2018, what we release in 2019, what Stripe's global expansion looks like and things like that. You don't have a valuable company unless the company continues to execute. It's very dynamic.

RAZ: It's a very careful way of saying hey, I could lose this all at any moment.



RAZ: What - how much of the success of this company do you attribute to your skill and, you know, your intelligence and how much to luck?

J. COLLISON: I think the question is less about, you know, how much can be attributed to my skill and intelligence and instead to the skill and intelligence of the hundreds of people who've gotten Stripe to where it is. And I guess I would say that skill and intelligence and especially - most importantly - intense application and hard work - I think all those things are necessary. I think had they not been there, had there not been so many people who just came up with so many smart ways of doing things and, you know, in many cases toiled at such length, there's not a chance - not a sliver of a chance that we would be here. But I also think that the luck was required too. There are, again, groups of people who are smarter and harder working than us who just didn't get the same good fortune.

RAZ: You are still - both of you guys are still so young. I mean, you know, you're at a point in your life where...

P. COLLISON: Less so every day. But, yes.

RAZ: Less so every day. But you're at a point in your life where lots of people are just starting out, you know, at the same age.


RAZ: So when did you guys know that this was huge? I mean, you know, it was going from this idea that you have in Cambridge, Mass., to raising $2 million to being valued at $20 then $100 and then billion and then today almost $10 billion. When did you - did you ever have a moment when the two of you sat back and said, wow, look what we built?

P. COLLISON: There's never really been time for that. And there's nothing like a young company to every morning remind you that there's so much left to be done, so much that's not yet working the way it should be. I mean, it's really quite visceral. You wake up in the morning, and there are 20 emails in your inbox that are sort of somehow all related to things that you're doing badly or wrongly. There is never a moment when it feels successful. And the quote that I kind of often think about from Greg LeMond saying - of course, the cyclist.

RAZ: The cyclist, yeah.

P. COLLISON: It never gets easier. You just go faster. And I used to kind of cycle quite a bit. And there's a lot of sort of painful truth to that where as you cycle more, as you practice more, as you get fitter, as you get faster, as your form gets better, sure, you start cycling faster. Your times get better. But the experience of being on the bike never gets easier. The pain that you feel on the first bike ride, that's the same pain that you're going to feel on your 500th bike ride. You'll just be going much faster on the 500th bike ride. And it kind of feels like that in a start-up, where every day now the problems and challenges and, you know, visceral pain is just as acute as when we were starting out. The problem is just in a different form. It's this kind of relentless process of trying to shift what it is that exists and what we've collectively managed to create so far into what we all set out to create in the first place. And we still have quite a ways to go there.


RAZ: Patrick and John Collison, founders of Stripe. In 2017, John Collison was the youngest self-made billionaire on Earth. By the way, the brothers are also voracious readers. Patrick recommends everything from the collected lectures of Richard Feynman to the collected works of Jorge Luis Borges. And last year, Patrick and John decided to launch an in-house intellectual journal at Stripe. It's called Increment. And it's meant to be an online gathering place for engineers in the tech community.


RAZ: And stick around because in just a moment, we're going to hear from you about the things you're building. But first, a quick thanks to one of our sponsors, Allbirds. The brand-new Allbirds Tree Runners are light and breezy shoes made from sustainably sourced, responsibly harvested tree fibers. Head to to find your perfect pair today.

Hey, thanks for sticking around because it's time now for How You Built That. And this story comes to us from Selma, Ala., with Robert Armstrong and his grandmother Anice.

ROBERT ARMSTRONG: She was really the matriarch of our family, lived through the Great Depression. Even her accent was older Southern. She would say, you know, buttah (ph) for butter.

RAZ: And butter is the operative word here because Robert's grandma - she used a lot of butter in her recipes, especially in her family-famous pecan chocolate chip cookies.

ARMSTRONG: I've never tasted anything like the way my grandmother baked them. They were small. They were crispy. And it was a good bit of butter in it. So the taste would linger. And I told her when I was in junior high school that, you know, I'm going to make a million dollars off these cookies one day.

RAZ: And that idea kind of stayed with Robert. So after he got out of college, he thought, hey, you know, maybe I'll try this. Maybe I will bake and sell my grandma's cookies. But the problem - he had never baked a cookie in his life.

ARMSTRONG: So I convinced my grandmother to teach me how to bake them. And she kind of thought it was funny. I mean, she had no idea that somebody would want to make a business out of it. She was all for it. It was just, oh, absolutely. So let's do it.

RAZ: So step by step in her kitchen, Anice taught Robert how to make her buttery pecan chocolate chip cookies. And then he tried making them himself.

ARMSTRONG: The very first day, I baked about 3,000 cookies by hand, did it exactly like my grandmother told me. And it rained that day. And it was humid in the kitchen. But I had no idea that that was going to affect the product. So they all turned to mush. So I had to throw them all away.

RAZ: And that's when Robert learned rule number one of cookie making - no humidity. Anyway, he eventually figured it out. He found a tiny kitchen in an abandoned restaurant in Selma. And he started placing his cookies in specialty shops around the city and around the state. And for two years, that was his life. He was selling cookies in the afternoon and baking them early in the morning.

ARMSTRONG: I called it cookie prison for a little while because it was just - I was in there by myself for so many hours. But you're sitting there, baking cookies. And you're thinking there's got to be a better way. I think I was making about $4 an hour at the time.

RAZ: Robert could not pay his bills. So in 2011, he actually shut the cookie business down. And he tried a bunch of other jobs.

ARMSTRONG: A T-shirt printing business - I did it online. I sold beef and pork to the military for a little while.

RAZ: But the whole time he was going from job to job - and this was for like two years...

ARMSTRONG: ...GPS monitors for like...

RAZ: ...Robert kept thinking he should go back to what he really loved doing.

ARMSTRONG: And, you know, I kind of came back to the cookies and thought, you know, I'd proved the concept. I'd proved people would pay money for this thing.

RAZ: But this time around, Robert knew that if he wanted to make money on the cookies, he had to find a real bakery to bake them and some serious brokers to sell them. So after months of calling around, he finally found a bakery in Pennsylvania that said, OK, you know, we'll give this a shot.

ARMSTRONG: And so we worked for a few months on a recipe, taking it from, you know, a cups and teaspoon family recipe to an industrial recipe that could be baked on some industrial equipment. We took out a line of credit with a local bank...

RAZ: Robert designed a package with a drawing of his grandma on the front. And he called them G Momma Cookies. G for Gammie (ph), which was her family nickname.

ARMSTRONG: She would - you know, would blush some that her face and her kind of - her name was all over the place. But she was, you know, just my No. 1 cheerleader.

RAZ: Gammie passed away in 2013. So she never got to see how G Momma's has grown since it relaunched. But the cookies are now in stores all over the Southeast and in some big stores too like Publix and Wal-Mart. And last year, G Momma's revenue was nearly half a million dollars. You can find out more about G Momma Cookies on our Facebook page. And, of course, if you want to tell us your story, go to We love hearing what you're up to.

And thanks for listening to our show this week. If you want to find out more or hear previous episodes, you can go to Please also subscribe to our podcast at Apple Podcasts or however you get your podcasts. You can also write us at You can tweet us, too. That's @howibuiltthis. Our show was produced this week by Thomas Lu. Ramtin Arablouei composed the music. Thanks also to Nour Coudsi, Neva Grant, Sanaz Meshkinpour and Jeff Rogers. I'm Guy Raz, and you've been listening to HOW I BUILT THIS from NPR.


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