[ { "i": 0, "speaker": "Harj Taggar", "text": "Okay, Patrick. Thanks so much for being here." }, { "i": 1, "speaker": "Patrick Collison", "text": "Welcome to Startup School. >> Great to be here. Harj and I first met 20 years ago and um uh he um we started a company together. I was going to give away the introduction." }, { "i": 2, "speaker": "Harj Taggar", "text": ">> Yeah, I I thought this was my interview, but keep going. You're doing a good job." }, { "i": 3, "speaker": "Patrick Collison", "text": ">> Well, we started a company together many many years ago and uh I learned a huge amount from Harj." }, { "i": 4, "speaker": "Harj Taggar", "text": "So it's really fun to do this. >> All right, let's um Well, actually I mean speaking of that. So when I think when I first met you 20 something years ago at the time your most impressive achievement I would argue was Chroma, your dialect of Lisp." }, { "i": 5, "speaker": "Patrick Collison", "text": "Any Lisp programmers here? Oh, wow. Okay, that was um I think I heard one whoop, which is more than I expected. Um but uh yeah, I I really liked Lisp when I was in high school." }, { "i": 6, "speaker": "Harj Taggar", "text": "Yeah, so what I was going to ask is um a prolific 16-year-old today could presumably just like prompt Claude to write their Lisp dialect. Would you would you advise them to not do that and still still do it?" }, { "i": 7, "speaker": "Harj Taggar", "text": "Is there Is there any value in such things?" }, { "i": 8, "speaker": "Patrick Collison", "text": "I don't know. I wonder a lot. Um Yeah, like I was saying on the one hand uh it used to be really fun to write all this assembly and machine code and to optimize your instructions and make layout in memory and everything and now we don't have to do that anymore." }, { "i": 9, "speaker": "Patrick Collison", "text": "Compilers do it for us. We don't mourn it too much. And so maybe in the same way we shouldn't mourn source code. We should just transcend the plane of uh instructions to Claude at all, but um but emotionally I miss it." }, { "i": 10, "speaker": "Harj Taggar", "text": ">> Um How about you think just like as I've been hanging out here um with these students like they're so like maybe the question behind it is many of them are just wondering what should they be learning at college?" }, { "i": 11, "speaker": "Harj Taggar", "text": "Like what is sort of in this sort of AI world like how much how much should they be trying to learn and derive from first principles and how much should they just outsource to the to the AI? >> Right." }, { "i": 12, "speaker": "Patrick Collison", "text": "Um, I mean, my model of this is, um, is cache. Um, you know, the c h not an s h, where Jeff Dean has this, uh, famous set of numbers that every programmer should know, uh, bandwidths and latencies and just kind of relevant constants you should have a reason as as you as you build systems." }, { "i": 13, "speaker": "Patrick Collison", "text": "And obviously, you know, thinking of building any system or distributed system or whatever, like, all lookups and all, you know, relevant bandwidths between different, um, components are are are very different, right?" }, { "i": 14, "speaker": "Patrick Collison", "text": "Uh, and you know, retrieving something from L1 cache is very different from retrieving from RAM is very different from retrieving across the network or whatever. And I think it's like that with knowledge." }, { "i": 15, "speaker": "Patrick Collison", "text": "Well, fine, yes, you can ask the agent or something to compute something for you or to look something up for you or whatever. That's a hell of a lot slower than knowing it in cognitive L1 cache." }, { "i": 16, "speaker": "Patrick Collison", "text": "And you can have way more round trips in your brain than you can, you know, muttering through, you know, super slow or typing it out a hell of a lot slower than knowing it in cognitive L1 cache." }, { "i": 17, "speaker": "Patrick Collison", "text": "And you can have way more round trips in your brain than you can, you know, muttering through, you know, super whisper or typing it out be will be much faster. will be much faster." }, { "i": 18, "speaker": "Patrick Collison", "text": "Um, and and then, you look if you look in revealed preference, uh, at what uh, companies themselves are doing, whether they're companies like Stripe or the labs or what have you, um, there still seems to be an enormous premium on cognitive ability." }, { "i": 19, "speaker": "Patrick Collison", "text": "And so, I wouldn't I I I I think, um, renouncing that before there's evidence that we've saturated, uh, those benefits would be >>" }, { "i": 20, "speaker": "Harj Taggar", "text": "Um, I mean, are there are there specific things that maybe you personally, either personally or as uh, CEO of Stripe, um, you still you purposely choose to sort of do yourself and like retrieve from your own cache, um, even though like the agents would probably do a reasonably good job." }, { "i": 21, "speaker": "Patrick Collison", "text": "Um I still I still write myself. Like I I um I I don't I I both philosophically but also uh both philosophically but also uh, substantively, uh dislike the writing of the models. I mean, it's very interesting, right?" }, { "i": 22, "speaker": "Patrick Collison", "text": "Because these can prove the Jacobian conjecture, you know, whatever. Uh and so clearly they're capable of these monumental feats." }, { "i": 23, "speaker": "Patrick Collison", "text": "Um but somehow I still haven't read the LLM essay that I found super compelling. Now, maybe it's just very hard to like its limit that domain because the you know, the utility function or something is kind of hard to define." }, { "i": 24, "speaker": "Patrick Collison", "text": "Um but yeah. Um I I think writing is a pretty inter interpersonal communication and writing I think are so very fundamental and so being able to reason sensibly in the multi-dimensional space of reality. And in some kind of indescribable way, I feel like the model is still kind of deficient at that." }, { "i": 25, "speaker": "Patrick Collison", "text": "And so I've never I've yet to send, you know, every tool is now trying to prompt me with, you know, pre-written uh suggestions, whether it's, you know, Gmail or uh apparently WhatsApp just rolled this out." }, { "i": 26, "speaker": "Patrick Collison", "text": "Um and I think I've still sent zero of those in my life. No. >> Um How about so if you talk talk about the Stripe story, uh the early days in particular a little bit, uh you were at MIT, then you left to start Stripe." }, { "i": 27, "speaker": "Harj Taggar", "text": "How did you think about that decision? And obviously we're in a stadium full of college students. How should they think about it? How do you How do they know if it's the right decision for them to uh leave college early and go start a company versus stay?" }, { "i": 28, "speaker": "Patrick Collison", "text": ">> Yeah, well, I I think I have the slightly unusual distinction of having dropped out of college twice to start a company. So, um so maybe one thing to know is that it's not totally trapdoor. Uh you can you can drop out and and in fact return." }, { "i": 29, "speaker": "Patrick Collison", "text": "So I dropped out after my freshman semester to start this company with Harj. That was super fun. And then after a couple years of that, went back, did another year at MIT and then dropped out again to" }, { "i": 30, "speaker": "Patrick Collison", "text": "start Stripe. Um and you know, I um I had this vision of my life and involving becoming an academic and I really like physics and I thought, you know, I'll do all this physics stuff." }, { "i": 31, "speaker": "Patrick Collison", "text": "It's so cool. I'd read all the Feynman books, all of this. And I guess I am Well, growing up in Ireland, I hadn't realized I hadn't thought much about the possibility of startups. Hello to the [laughter] other Irish folks here." }, { "i": 32, "speaker": "Patrick Collison", "text": ">> And um And I mean, way back then in the sort of you know, pre-Cambrian era, startups were definitely much less you know, well-known even on campus and so forth. You know, when I was dropping out, people thought it was super weird." }, { "i": 33, "speaker": "Patrick Collison", "text": "Um I think um You know, overall um if you enjoy college, I I would actually you know, I I I think there's no harm in finishing. I I I felt this real sense of urgency, which I think in hindsight was a bit unnecessary." }, { "i": 34, "speaker": "Patrick Collison", "text": "Um if you but if you don't enjoy college, just you know, whatever, it's not your thing. It's not what captivates you. You don't really want to learn all the physics things or whatever." }, { "i": 35, "speaker": "Patrick Collison", "text": "Uh there You know, I think a lot of parents think that dropping out is very risky and impair your reputation for the rest of your life and so forth. And as far as I can tell, nobody has ever cared. So I I both think you don't need to but also the cost of doing so is de minimis." }, { "i": 36, "speaker": "Patrick Collison", "text": "What was the urgency you were feeling? >> The urgency?" }, { "i": 37, "speaker": "Harj Taggar", "text": ">> Yeah, to go out and do something. I don't know." }, { "i": 38, "speaker": "Patrick Collison", "text": "Life is short, right? Um and I I I all I mean, it was a general kind of haste. Uh I think, you know, a lot of us um I'm sure many of the people here you you kind of a bit of that." }, { "i": 39, "speaker": "Patrick Collison", "text": "A bit of um Marc Andreessen also talks about a version of this. I thought that a bunch of the opportunities uh in startups in Silicon Valley and so forth were ephemeral and fleeting. And if we didn't build it then, but, you know, it wouldn't be possible to do it in three or four years." }, { "i": 40, "speaker": "Patrick Collison", "text": "And maybe all the opportunities will be gone. You know, in hindsight, I think that um that was a poor intuition. Uh it's been pretty robustly and reliably the case over many decades in Silicon Valley has a surfeit of opportunities. Um yeah, I think it was mainly those two things." }, { "i": 41, "speaker": "Harj Taggar", "text": ">> think it's um I mean, this is a very common thing that we hear when we talk to students now is that they are part of the reason they want to drop out en masse, it seems, at this point is they're worried that actually now is the moment that they're sort of I think the meme going around is that if you don't sort of uh drop out and start a company and make lots of money, you're going to be trapped in the permanent underclass." }, { "i": 42, "speaker": "Harj Taggar", "text": "So, is that um should everyone here be worried about being stuck in the permanent underclass? I guess is the question." }, { "i": 43, "speaker": "Patrick Collison", "text": "Um I think um humanity has always had um an affinity for these millenarian sort of models of how uh everything is um you know, everything will soon come to an end uh and be this this sort of permanent transformation of society and so forth." }, { "i": 44, "speaker": "Patrick Collison", "text": "Actually, there's a great book, The Winged Gospel. People thought that after the invention of aviation, that it was just like civilization was just entering humanity as a species were entering a new era and nothing is going to be the same." }, { "i": 45, "speaker": "Patrick Collison", "text": "I mean, obviously aviation was a pretty big deal, but uh I I I don't think it was sort of quite the um the sociological rewriting that some of the you know excitable proponents at the time imagined. So I am you know it's it's hard to predict anything especially the future but I would I would take the under on this" }, { "i": 46, "speaker": "Patrick Collison", "text": "being the last couple of years to get a company going. >> Fair enough. So going back to the Stripe story Stripe ostensibly seems like a good idea. Like even on day one it's the internet's a big deal money's a big deal like combine those two things." }, { "i": 47, "speaker": "Harj Taggar", "text": "Presumably is that how it went when you went to tell people you wanted to start Stripe and everyone just say hey this is a great this is an obviously good idea." }, { "i": 48, "speaker": "Harj Taggar", "text": ">> It was kind of funny it was um it was so something we learned from YC uh was that the importance of focusing on very concrete easy to explain customer problems." }, { "i": 49, "speaker": "Patrick Collison", "text": "Like it's it's very easy to to hallucinate or to you know imagine some customer problem that's not actually something viscerally felt by a person who would pay money." }, { "i": 50, "speaker": "Patrick Collison", "text": "And so over the course of in part working on Automatic together we have encountered this issue of it being really annoying to deal with movement of money or payments whatever on the internet." }, { "i": 51, "speaker": "Patrick Collison", "text": "Um and on the one hand it seemed like an obviously good idea in the sense that nobody liked the existing ways of doing so and they were broadly extremely unpopular and kind of antiquated and legacy and you had to like fill out all it seemed like a an obviously good idea in the sense that nobody liked the existing ways of doing so and they were broadly extremely unpopular and kind of antiquated and legacy and you had to like fill out all" }, { "i": 52, "speaker": "Patrick Collison", "text": "this paperwork and go to the bank in person and the paperwork was in Latin and just like it was all bad." }, { "i": 53, "speaker": "Patrick Collison", "text": "Um but then the flip side is it just seems kind of ridiculous that two kids would start a financial services business and fintech didn't exist as a sector at the time like the word literally didn't exist and so it's just kind of you know we felt like the proverbial squirrels you know in a trench coat trying to masquerade as a real business or as you know serious adults but obviously knowing nothing coming in about the space and and certainly a lot of people we met and pitched or banks or partners or whatever that we talked to, I mean you didn't literally laugh us out of the room, but I mean, you kind of see them looking for the button to like call security under the desk to have them haul us out" }, { "i": 54, "speaker": "Patrick Collison", "text": "cuz it just seemed so improbable. So, anyway, I'd say it like it both seemed like an obviously good idea in that people really wanted this, but also a bad idea in that nobody took it seriously." }, { "i": 55, "speaker": "Patrick Collison", "text": "Um but I I think that I think the fact that it was ultimately the fact that it was grounded in such a concrete actual real user problem saved us." }, { "i": 56, "speaker": "Harj Taggar", "text": ">> Um you actually speaking of that, how did you you had to in order to actually build the product, you had to get a banking partner and do things that a typical software company did not have to do. As two young founders, like how did you manage to convince a bank to trust you in the end?" }, { "i": 57, "speaker": "Patrick Collison", "text": "Yeah, um well, actually this is not an answer to your question. But um just a thing that strikes me as I sit here is the reason we decided to start Stripe is because John and I were in college together." }, { "i": 58, "speaker": "Patrick Collison", "text": "He was in his freshman year and we went to Startup School in 2009, which was held in Berkeley. And we we thought it was pretty cool." }, { "i": 59, "speaker": "Patrick Collison", "text": "Um and so we went to get sushi afterwards in Potrero and we were walking back from sushi and we're like, you know, we'd kind of been kicking around this idea for um a payment thing or like we've been thinking about the space." }, { "i": 60, "speaker": "Patrick Collison", "text": "And it was walking back that evening after Startup School that we decided to start Stripe." }, { "i": 61, "speaker": "Patrick Collison", "text": "I remember literally where we were in the road and I remember what we said to each other, which was, \"Yeah, you know, we might as well because it probably won't be that hard.\" Okay." }, { "i": 62, "speaker": "Patrick Collison", "text": "So, moral of the story is go get sushi in Potrero tonight and you might start the next Stripe. Um and yes, be beware of sort of these ultimate yak shaves." }, { "i": 63, "speaker": "Patrick Collison", "text": "We thought we could do it on the side while in college, you know, take a couple months, and that was almost 17 years ago." }, { "i": 64, "speaker": "Harj Taggar", "text": "Um at the time I remember you were also unusual in that you took sort of longer to do a big public launch. And especially within the YC world, the motto is very much sort of launch early," }, { "i": 65, "speaker": "Harj Taggar", "text": "launch quickly, be out there and iterate. Um could you maybe just talk us through a little bit about that?" }, { "i": 66, "speaker": "Patrick Collison", "text": "So, why did you do it that way? >> Yeah, so um we started working on Stripe um kind of seriously in the uh the well, we started working the week after school, but um we were going to college wasn't full-time." }, { "i": 67, "speaker": "Patrick Collison", "text": "We started working full-time the summer of 2010. We launched publicly September 2011. So, almost uh 2 years after like the first lines of code after the repo was started." }, { "i": 68, "speaker": "Patrick Collison", "text": "And yeah, waiting 2 years to launch seems I mean I you know, I've heard if we're going to YC meetings, you know, every every week, I think we'd have been, you know, bludgeoned on the head." }, { "i": 69, "speaker": "Patrick Collison", "text": "Um I think um I'm looking in many domains that probably is the wrong thing to do. Um in our domain, to answer your last question, because we had to do so much stuff around security and partners and money movement and infrastructure and reliability and you know, all the things." }, { "i": 70, "speaker": "Patrick Collison", "text": "We just we didn't feel like we could scale a really good self-serve experience without getting a lot of the kind of the preconditions um and the infrastructure in place. Um the thing that saved us um and meant that it wasn't a total walk in the wilderness is we had production users almost from the very beginning." }, { "i": 71, "speaker": "Patrick Collison", "text": "So, first lines of code um in uh fall of '09, we got our first live production user uh in um in January of 2010. So, like 2 months into working on whatever." }, { "i": 72, "speaker": "Patrick Collison", "text": "And it did very little. Like it was very larval and incomplete. Uh and uh our first production customer was uh Ross Boucher at a company called uh Twilio. Um and all it could do was charge a card." }, { "i": 73, "speaker": "Patrick Collison", "text": "Uh and so, you know, Ross would charge the card. Uh and you know, then he would ask some very reasonable question like, you know, how do I How can I look at all my charges? And like, reasonable request. And so, you know, let's code up a little dashboard here." }, { "i": 74, "speaker": "Patrick Collison", "text": "And then he'd be like, well, I want to refund a payment. And you know, we're like, all right, we'll build refund support. And then, you know, after a couple of weeks, he was like, so you know, at some point, do I get my money? And we're like, also a reasonable request." }, { "i": 75, "speaker": "Patrick Collison", "text": "So, let's let's build that functionality. So, it was very kind of just-in-time development." }, { "i": 76, "speaker": "Patrick Collison", "text": "Anyway, so we we had a production customer from very early, and then we did increase So, in private beta, we increased the number of customers every single month, you know, all the way to that public launch." }, { "i": 77, "speaker": "Patrick Collison", "text": "And so, every, you know, every week, we had actual customer feedback, requests, new users coming in. We're learning things from reality as opposed to our own kind of hypothesized or extrapolated conception of it. And I I think if you" }, { "i": 78, "speaker": "Patrick Collison", "text": "have, you know, a significant stream like that of of um of grounding, I think it's probably okay to not be like, launch launch. When do you I mean, you're you're an expert YC partner. Do you agree? [laughter] >> That's a good question." }, { "i": 79, "speaker": "Harj Taggar", "text": "Um Yeah, I mean, it is This is the the issue with advice in general is it's sort of so generalized. And like, they especially in startups, the exception proves the rule, right?" }, { "i": 80, "speaker": "Harj Taggar", "text": "So, I think those are Yeah, certainly certainly if um you know, your the cost of failure is high, um then it almost certainly you have to sort of take longer to like build." }, { "i": 81, "speaker": "Harj Taggar", "text": "Um You may be a very slight tangent, but something I'm curious about related to this, though, is you know, we we were talking like with with these coding agents, the ability to just like build and produce software cheaply and quickly, um, I wonder, should people be taking more of this path?" }, { "i": 82, "speaker": "Harj Taggar", "text": "Like, should people be more ambitious in general with what the version one of the thing that they launch is? Um, or you know, is it still fundamentally good product design to start out narrow and focused and then expand out once you know what people want." }, { "i": 83, "speaker": "Patrick Collison", "text": "Yeah. Um, um, it's a good question. Um, I think probably in the era of AI, I mean, I don't know." }, { "i": 84, "speaker": "Patrick Collison", "text": "And you know, to some extent YC will be I think the expert here, but um, you know, there's the whole kind of traditional lean startup doctrine of exactly what you say, like start out by" }, { "i": 85, "speaker": "Patrick Collison", "text": "buying Google Ads or something and identify this crevice or whatever and aggressively expand out from that. I think you can certainly imagine that that becomes much more competitive and much more aggressively mined and it's kind of hard to find those little niches." }, { "i": 86, "speaker": "Patrick Collison", "text": "The internet's a much bigger place than it was 20 years ago when some of those ideas emerged, whereas taking these really divergent starting points where nobody else is trying to occupy that territory is maybe a more like basically maybe you have to more aggressively de-correlate in the era of AI, and I think it is interesting to think about, you know, many of the" }, { "i": 87, "speaker": "Patrick Collison", "text": "companies that were most successful over the last 10 years, so many of them are anti-lean startup, right? Uh whether it's, you know, the labs themselves or Anduril or yeah, you can go down the list." }, { "i": 88, "speaker": "Patrick Collison", "text": "A lot of them have this characteristic." }, { "i": 89, "speaker": "Patrick Collison", "text": "So, I think maybe a better way of saying it is 20 years ago that whole lean startup thing was almost the only thing to do because of capital available and you didn't have AI that made, I don't know, spinning up an organization with many different potentialities and capabilities so much easier, whereas now I think you can start these much more aggressive and ambitious things up front." }, { "i": 90, "speaker": "Harj Taggar", "text": "Um within sort of YC and probably startup world at this point, you're famous for the at least the program term schlep blindness, this Stripe, um, at least on the surface was not like, you know, involved a lot of schleps, like things I presume you weren't like the intellectually most interesting things to work on." }, { "i": 91, "speaker": "Harj Taggar", "text": "Um, and I always found that especially interesting for you because you just mentioned you had academic interests in physics and you're just like clearly like, you know, a deep intellectual and have very many things that you're interested in." }, { "i": 92, "speaker": "Harj Taggar", "text": "As Stripe has sort of grown into this big company, in what ways sort of, you know, in what ways are there sort of like intellectual rewards that you've given up and which ones have you gained?" }, { "i": 93, "speaker": "Patrick Collison", "text": "Yeah, I mean, look, in any company there's a bunch of stuff that's not that rewarding or in and of itself all that interesting. Like so setting up payroll, no one sort of starts a company so that you can set up payroll." }, { "i": 94, "speaker": "Patrick Collison", "text": "Uh, and certainly building business financial services there's all sorts of, you know, more arcane and extensive versions of that. I think that I actually feel extremely lucky with Stripe and in this respect." }, { "i": 95, "speaker": "Patrick Collison", "text": "And I think this is something I don't know if you need to think about it that much up front, but I think once you think about it maybe before you raise a significant amount of money, you know, you always worry naturally about the possibility of failure and you know, what will happen if you fail and how to" }, { "i": 96, "speaker": "Patrick Collison", "text": "mitigate and avoid failure and all those things. I think you need to ask the uh, the sort of converse of that, uh, what if you succeed? And you know, you raise money and you've customers and you've employees and a whole thing. Like are you going to be are you going to enjoy that?" }, { "i": 97, "speaker": "Patrick Collison", "text": "Are you going to want to work on that for 10 years, for 17 years, for 30 years? Uh, I mean, Larry Ellison at Oracle is going for it mean, I I I guess it'll be a half century soon, right?" }, { "i": 98, "speaker": "Patrick Collison", "text": "Um, so so, you know, what if you succeed? And in the case of Stripe, I really love it because you know, we're working with the world's most interesting and innovative companies." }, { "i": 99, "speaker": "Patrick Collison", "text": "Uh like we're uh, uh 25% of all Delaware corporations are started with Stripe uh via Atlas." }, { "i": 100, "speaker": "Patrick Collison", "text": "And then we get to partner with them and work with them and hear from them and get their feedback and get their requests and everything, you know, through the entirety of the journey up to being the Shopifys and the OpenAIs and the, you know, all all the um the uh the uh the standout successes." }, { "i": 101, "speaker": "Patrick Collison", "text": "Um oh and actually speaking of Atlas, uh we're giving free Atlas incorporation to everybody at Startup School." }, { "i": 102, "speaker": "Patrick Collison", "text": "So, um if you are struck struck by the uh the urge to found something uh you know, over dinner this evening as we were, uh just email startupschool@stripe.com and we will get you your link uh for free Atlas." }, { "i": 103, "speaker": "Patrick Collison", "text": "Um but uh but yeah, I I you know, I think PG latched onto something where yeah, there are all these kind of menial tasks, but but in the kind of totality of Stripe, I find it so interesting." }, { "i": 104, "speaker": "Patrick Collison", "text": "Like every business is a kind of applied theory on how some aspect of the world works or how some market works or how some you know, how if the new company with a new um the new model, it's kind of a contrarian thesis on some counterfactual." }, { "i": 105, "speaker": "Patrick Collison", "text": "But yeah, just like it's it's I've never met a Stripe customer and thought that's boring. Um so so it's actually the business as a whole has been the opposite of uh of the Schlep Blindness um instinct." }, { "i": 106, "speaker": "Harj Taggar", "text": "And you have a particularly unique in um perspective on this cuz you work with the big model um providers, the big lab companies, and you work with all of the fast-growing AI startups on the ground." }, { "i": 107, "speaker": "Harj Taggar", "text": "Uh something that came up a lot here yesterday, uh honestly comes up within the batches, too, is people are just worried about um is my idea going to get sort of trampled by the the big uh lab providers?" }, { "i": 108, "speaker": "Patrick Collison", "text": "And I'm giving your perspective, I'm just curious like how how should people think about that? Yeah. Um Yeah, again, predictions are hard and certainly the labs are very competent, capable organizations. Um And maybe you should separate a little bit." }, { "i": 109, "speaker": "Patrick Collison", "text": "Will rapidly improving AI capabilities do this or will the labs specifically themselves do this? Um I think in general the track record of like no organization if we go back 20 years, you know, there's some sense with Google." }, { "i": 110, "speaker": "Patrick Collison", "text": "Like, you know, when we were doing automatic, the question was always for our company and every other company, you know, what if Google does this?" }, { "i": 111, "speaker": "Patrick Collison", "text": "And Google seemed kind of omnipotent and had this immense number of incredibly talented people and essentially infinite access to capital and server and just all the things. And just human organizations are complicated and it's very hard to have um to" }, { "i": 112, "speaker": "Patrick Collison", "text": "manage to aggressively pursue 100 different priorities and to deal with all the issues and interference that arises among them and so forth." }, { "i": 113, "speaker": "Patrick Collison", "text": "And so, you know, Google has done incredibly well in a bunch of specific places, but it's not like Google has done all the things even if in some kind of basic material sense, uh Google maybe, you know, had that ability. So, I'd say that the kind of the track record of that is um is uh is checkered." }, { "i": 114, "speaker": "Patrick Collison", "text": "And in general, I think that fear has been overstated. Now, I think there is a more specific thing of just like models themselves. Forget the labs." }, { "i": 115, "speaker": "Patrick Collison", "text": "Even even if the labs aren't specific particularly ambitious about expanding their scope, just like literally at length, uh will will obviate a bunch of or agentic capabilities will obviate a bunch of uh of you know, specific verticals or tasks or something." }, { "i": 116, "speaker": "Patrick Collison", "text": "You know, hard to say, obviously contingent on one's forecast of the model capabilities themselves, uh but, you know, in certain cases, I'm sure that will happen. And you know, in certain domains, it has already happened." }, { "i": 117, "speaker": "Patrick Collison", "text": "Looking at the Stripe data, one thing I will say that I think is germane to people here, um there are many more businesses getting started now than there were a year ago, like as little as a year ago. Um, way, way more than we're getting started, you know, 5 years ago." }, { "i": 118, "speaker": "Patrick Collison", "text": "Uh, and actually the relative change between last year and this year is pretty much the largest relative change we've seen in any given year. So, for example, from 2019 to 2020, we saw a big jump, you know, understandable during COVID." }, { "i": 119, "speaker": "Patrick Collison", "text": "So, you know, um, February to April of 2020 or whatever. Uh, you know, I I I think the growth rate inflected to maybe 50% or thereabouts, uh, year-over-year in terms of new businesses getting started." }, { "i": 120, "speaker": "Patrick Collison", "text": "Um, as I speak, the number of new businesses starting on Stripe is up around a bit under, but around 2x year-over-year, um, which again is the largest relative jump, uh, we've seen." }, { "i": 121, "speaker": "Patrick Collison", "text": "Um, and you might think, okay, fine, you know, there's way more vibe-coded, kind of lightweight slop, you know, whatever. Like, maybe fine, there's more things, but like, are they actually succeeding?" }, { "i": 122, "speaker": "Patrick Collison", "text": "Um, but actually the median business, uh, is doing better this year than a year ago. Um, and so and then if we kind of, um, stratify and look at the probability that any given business will reach some revenue threshold, a million dollars, five million dollars, 10 million dollars, whatever, um, those all seem to be getting better." }, { "i": 123, "speaker": "Patrick Collison", "text": "Uh, business are uh, the time to revenue for new companies incorporated with Atlas is declining. And so, by all the kind of objective metrics we can look at, uh, it seems to be a better time than ever to start a business. Then again, things can change." }, { "i": 124, "speaker": "Patrick Collison", "text": "I don't know what the world's going to look like in 5 years, but, you know, speaking today on July 26th or whatever, uh, of of 2023, um, I think it is the Stripe data would suggest that there's never been a better time." }, { "i": 125, "speaker": "Harj Taggar", "text": "Um, I mean, we see the exact same thing in the YC batches. Companies are just able to grow faster than ever. Um, >> Certainly within the batch." }, { "i": 126, "speaker": "Patrick Collison", "text": ">> It used when you know, back in again the old days when John and I were first starting out, like getting to a million dollars of revenue like running revenue was a big deal. Like people would know about that company. They'd be like, you know, I heard that X company got to a million dollars of revenue." }, { "i": 127, "speaker": "Harj Taggar", "text": "And now, I mean I don't think that's >> Yeah, that's actually you should be well, your first month it feels like. You should um that's an exaggeration for everyone here." }, { "i": 128, "speaker": "Harj Taggar", "text": "Um but I mean I certainly within sort of like sort of like the YC uh part of the life cycle like day zero to 90, it's really being driven by I would say enterprises willing to buy from startups, which is the new thing." }, { "i": 129, "speaker": "Harj Taggar", "text": "So, you can sign these new contracts um within like the batch. Um you have the data as the companies keep growing." }, { "i": 130, "speaker": "Patrick Collison", "text": "I'm curious, are there other factors that are driving these sort of um uh inflected growth curves from like one to 10 and 10 to 100? I think it's really the dynamic you just mentioned, uh which is businesses uh businesses everywhere are more um spring-loaded uh to adapt and to try new things." }, { "i": 131, "speaker": "Patrick Collison", "text": "And they have a real terror of being left behind with archaic and antiquated ways of operating." }, { "i": 132, "speaker": "Patrick Collison", "text": "And so, in normal times, you're a new startup, you have you have some mechanism for doing whatever, and you pitch the CIO or the CTO or the whoever at some company, and they kind of don't want to talk to you because, you know, your thing is not validated." }, { "i": 133, "speaker": "Patrick Collison", "text": "Maybe you won't be around in 2 years. You know, all all the kind of obvious objections. But now, people know that, well, the risk of the status quo is actually extremely high. And so, even if there's risk in doing all the new things, well, this path also looks pretty dangerous." }, { "i": 134, "speaker": "Patrick Collison", "text": "And so, I really think there's never been a better time for startups to to sell um and to have their products get adopted at, you know, pretty meaningful scale right out of the gate. Uh a lot of" }, { "i": 135, "speaker": "Patrick Collison", "text": "YC companies in recent times have demonstrated this, but uh I think it's a it's a really pervasive dynamic." }, { "i": 136, "speaker": "Patrick Collison", "text": "And there's a bit of it I think also, I mean Stripe is not a consumer company, obviously, but you know, I think there's some version of this on the consumer side where I think consumers, I mean, are also pretty, I mean, consumers have complicated views on AI and maybe they don't want the data centers, but people are very intrigued by the products and I think there is a kind of they're kind of beguiled by them and there's a a predisposition and an openness to experimenting with the new." }, { "i": 137, "speaker": "Harj Taggar", "text": ">> Um maybe just more broadly something I'm curious about is again with with this the data you have at Stripe, um has anything you've seen in that data stream um changed a belief you have about AI broadly say over the like the last 12 months?" }, { "i": 138, "speaker": "Patrick Collison", "text": "I mean, there's a fear uh that AI is going to be this um hegemonic, centralizing, totalizing force where a small number of companies gobble up a very large share of the economy." }, { "i": 139, "speaker": "Patrick Collison", "text": "And many companies at the forefront of AI um have done incredibly well and I think we'll continue to do incredibly well, for sure." }, { "i": 140, "speaker": "Patrick Collison", "text": "But based on what we can see at Stripe, the hunger and the intensity with which other companies are either getting started, taking advantage of these new capabilities, or existing companies are retooling, I don't worry about the centralization in the same way." }, { "i": 141, "speaker": "Patrick Collison", "text": "Uh I think there are going to be many thousands of winners. Um and again, we try not to offer any definitive" }, { "i": 142, "speaker": "Patrick Collison", "text": "prognostications cuz the future is not predetermined, but based on the trend lines we can see, I think we are heading towards a um more decentralized world and one with more broad-based prosperity. >> Yeah, cool." }, { "i": 143, "speaker": "Harj Taggar", "text": "All right, well, I think that is all we have time for today. So thanks so much Patrick for having me." }, { "i": 144, "speaker": "Patrick Collison", "text": ">> Thank you for having me and um It would be remiss of me not to say that Stripe would not exist without YC. >> All right, cool. All right, see you soon." } ]