Stripe: Patrick and John Collison (2018)

Hey, so before we start the show, I want to tell you about today's episode, and it's about software, a seemingly simple payment system that was actually so complicated that none of the big tech companies wanted to take it on. And the two guys who did Were recent transplants from Ireland. Two brothers, both college dropouts, and as you're about to hear, both super, super smart. This episode first ran about two years ago. It is one of my favorites. I know I say that a lot, but it really is. I hope you enjoy it. We built the first prototype back in October of 2009.

And it w it really was apparent to us that kinda it wouldn't be easy. Like i it w it was not gonna 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, gonna be hard, but it is actually Possible. Yeah.

From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. Guy Roz and on today's show how two brothers from Ireland Wroven lines of computer code. Built it into a nine billion dollar 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 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 a hundred million dollars 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 underarm or shirts or Warby Parker glasses, but It is what allows you to buy those things online. If you use Instacart or Lift or Kickstarter or even if you shop online at Target. You're using stripe. It's basically the backend 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 youth of the two brothers who founded it. When Stripe launched in 2009, 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. Very small. Uh it had uh twelve bedrooms when he bought it. And Uh and we got a house maybe a mile or two away. Uh and so we grew up s surrounded by

Farmland. Yeah. Play in the garden and Did a lot of that. Uh and to Play with Lego and we did a lot of that and to read books. And uh I look back at it very fondly. 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 and you know, mop the floors?

Well remembered. You know, Patri I I think it was Patrick was probably four, uh when they started I I I was two. Uh and so, you know, there's only uh you know, a two year old can only be so useful uh in the operations of the uh of the hotel. I think my favorite memory is the uh you know the the ballroom floor, the highly polished surface. Uh, that was awesome as a kid for uh for kind of g getting uh y you know, kind of a length game in terms of who can slide the furthest. But uh mu much in all as I'd like to imagine that we were extremely useful in in running the hotel. I think we were Primarily a hazard. How did you guys get into coding? How did that happen?

I bought a book. When I was thirteen. And I I Read it one Saturday and

Started writing some web pages. Uh, and really it was all sort of uh it was all downhill from there. Yeah. And how about you, John? Did you Like seeing Patrick get into coding, did you think, Hey, I wanna try that too? Yeah, that's definitely an influence and and I think I had an experience um 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.

uh and you're making everything up as you go and you don't really understand, you know, you're copy 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 uh websites or uh or video games. And so in my case, the initial website I made was not very good. After I'd built it, Patrick taught me a lesson in Uh insecurity, you know, I was probably fourteen at the time and I cobbled together this website and there were vulnerabilities and issues and stuff that uh Patrick uh then hacked the site just uh to to teach me a lesson on that. Okay, so Patrick, I I'm mentioned this because you're not gonna mention this.

In two thousand five you won an award, like the I think it was like the Young Scientist a award of of Ireland. You were fifteen. And um or sixteen or something like that. And um I'm assuming and and maybe you weren't cognizant of this, but but We're I mean People must have said, Oh, they're the Collison boys, you know, they're those two s really smart boys. W were you aware

That you guys were Just really. smart. I mean, did did you were you were d were you aware that people were aware of the two of you uh when you were kids? Um I don't think they

Well when we were kids. I think actually this this kind of science contest is that was really the first time where uh anyone might have had even the slightest cause yeah uh to have kind of uh come across or or or or heard of either of us. Uh what what did you do? What what was your invention or experiment or submission that won you young scientists of Ireland.

Well, as we sort of touched on, uh I'd gotten really into programming and um 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 fifties, like really early in sort of the history of technology. Uh but it had been kind of forgotten uh and ignored. The thing I worked on was sort of a new version of Lisp, trying to kind of update it, um, making it really straightforward to build sort of complicated web applications and things like that. And you know, it's funny, I it's only kinda 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 I uh you know I didn't consciously think about it this way at the time, even if 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. So in two thousand six, after Patrick won the Young Scientist of the Year award, He decided to go to the US to hit 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, backend 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 him. Move to San Francisco. And called their company. Octomatic. What Octimatic did was it made it really easy to kind of manage

And to list items for sale. On existing platforms, things like eBay, uh or you know, other marketplaces for 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. Uh 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 kinda one side of the marketplace such that over time we could come and then build, you know, a better user experience for customers. So you guys build this thing and

Who is the public face of Octimatic? Because I mean, obviously you guys are super smart and talented, but You know, you were really young, right? Like eighteen and sixteen years old. So were you guys sort of staying in the background and were the other Founders. The public face was really the website. And you know, we kinda took full advantage of that. But the company must have done

pretty well, right? Because I I d I guess just over a year after you had your original idea, uh it sold for reportedly for five million dollars. So W 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 five million yourself. You had to divide it up and

And so but still you probably investors and 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. Well certainly. More money than we've ever seen in our lives, yeah. Um He It was enough money that it afforded a kind of freedom and and and really I think just kind of forced sort of a kind of reflection that, you know, had we been uh or had I been kind of on just the the treadmill of you know, you you go to college and you get your degree and then it's your first job and so on, such that you know

I I can certainly imagine sort of a different version of of you know my life or my career where I I didn't do some of that thinking, you know, un until I was much older. Yeah. So I I guess this was like right around the time you were at at Harvard, uh, John and Patrick you eventually went back to MIT f for uh for a while, right? That's exactly right, in the fall of 2009. And I should just preface this by saying both of you would drop out and never return. Um, but in that in that brief moment of time where where John, you were Harvard and Patrick, you were at MIT, uh Is that really this around two thousand nine, is that where the early sort of idea

Uh that would become stripe began? Yeah. That's an interesting question. On the one hand, a stripe was the most interesting idea we had come across during the course of Octomatic, in that Uh it was the single hardest thing. About developing an internet business. was just the the business side of it and the accepting money side. The payment side. Yeah. It's and it seemed it's it seemed like a really important problem.

And we thought there should be something really easy focused on developers, instant setup, to to let people start accept starting accepting money. But on the other hand, what did we know, right? We were the we were these two college students. Yeah. And so maybe the financial system had it all figured out and and we were these these impetuous youngsters uh with the wrong ideas. And so You're trying to figure out in those early days of of of starting a company or starting a product Are we wrong or is the world wrong? Aaron Powell So let me understand try to understand what the ta take us back to two thousand nine. 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 I'd I'd just hit you know, click to to buy it and uh it would be delivered like a couple days later.

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. Yeah. Uh and then you 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 the kind of the stories they would tell you. I again oftentimes they would tell you it was the single hardest thing about getting their business off the ground because the the the providers that exist 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 or or no you can't. And so it was a much more important uh step in in that regard. And you know it's funny, when we go to uh investors early on for stripe, they would say, you know, it seems pretty solid, you know, it's two thousand nine, like I you know, I think we have This Internet payments thing down. And they would do some asking around and that's when they got it. Right. So you so so if you were starting a b an internet business in two thousand nine, when when this idea came to you.

What I mean you w and you you want to accept payments. Let's say you had a business selling Oh, I don't know, uh you know, homemade peanut butter that you would ship to people. Um it it's great. It was hard. It w this it would have been really hard to set up a way to accept payments through your site. I mean it it it it's hard to imagine that it it could have been the case. And uh you know, clearly there must be some kind of reasonable answer to this, some 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. The that sort of technology companies were very hesitant to go and address it. Why? Why would they be hesitant? Because you 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. W with figuring out a better way to do payments, technology companies, startups, uh tended and still tend, I mean for understandable reasons, to kind of shy away from thing from problems that sort of uh where you have to solve a lot of hard problems in multiple domains. Yeah. And then

Yeah, 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 gonna solve this. Explain for a moment the PayPal thing, because I you know, I I've used PayPal not very often, but I've had you know occasions where somebody asked me to PayPal them and I've Paypaled them and it seemed pretty Easy. So w what was the problem? So the basic issue with PayPal was that it it it's designed for consumers, not for businesses. And so if you're building an app, if you're building, you know, a a website, if you're building a new marketplace, something like this, PayPal works Okay for sending, you know, twenty dollars from Joe to Jane. Yeah.

Where it works much less well is when you wanna do this at scale. You wanna sort of build an automated integration into 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. Uh whereas when you're building a business online, when you're again integrating this into a website or into or into an app or something like that, you have a quite different set of considerations around how you do this at scale. So okay, so H 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 and credit card companies that you know, Google and Apple clearly w felt that they could not resolve. In large part a healthy dose of the naivety of youth. Um But uh

You know, we didn't just leap into it. Uh we built the first prototype back in October of two thousand and nine. And then we basically spent kinda eight or ten 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 realised 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 w it really was apparent to us that kinda it wouldn't be easy. Like it it w it was not gonna 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. And but I guess yeah, what we got a sense for sort of after again that this kind of investigation was

Yeah, gonna be hard, but it is actually possible. So you guys had a couple of hundred thousand bucks from the sale of Octimatic, and obviously you had the coding chops and the technology chops, but y you did not have Any money. How are you able to to get money to

to you know, fuel the ambitions of this company. One of the things that Silicon Valley does well. Yeah, probably has the high you know. Patrick and I now travel to uh a decent number of other places and Stripe has offices around the world in Dublin and London and Singapore and places like this.

But 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 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 s uncertainty in every other aspect of the execution between would Patrick and I be able to get visas for you know for the United States to work here to would we be able to hire to what would the long term uh 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.

I I what I'm what I 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 and and a lot of investors love that. They love to see that experience. Um 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 gonna manage people? Or um you don't have any connections or involvement in the financial industry or b background. D did you get questions like that? Surprisingly, no. Uh I think people are used to that in Silicon Valley. I mean, by the time people become famous uh because because the thing they worked on succeeded, they tend to be older. But that means the mental image we have uh of people who do successful things is like ten to twenty years, maybe even more.

older than the ages at which they tend to have actually done them, right? And uh VCs and investors and 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 twenties, but is very commonly done by people in their twenties. Uh and so, you know, I think that's kinda to their great credit, and you know, we really benefited from it. Uh the th you know, the th the has I mean, this is not to suggest that investors, you know, r 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. Uh rather than the kind of uh we're bad people to expect. Well

Yeah, a whole host of reasons. It was going to be a developer oriented service rather than going and sort of um uh trying to you know run this big kind of expensive sales and marketing campaign. Exactly already thousands of companies doing something like this. Um W uh as you suggested, there 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 I think visually just how airly the market kind of still was. You know, we we were sort of starting strife in the wake of the financial crisis, and it's kinda hard to uh remember this or kind of uh internalize it now, but people were actually fairly pessimistic about technology in some ways back then. And that was in part because

US investors had really kind of um uh tilted quite skeptical on where technology was going. And so I think, you know, uh the 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 the stuff that we're gonna do. When we come back. 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. Hey, welcome back to How I Built This from NPR. I'm Guy Raz.

So it's two thousand ten. Patrick has dropped out of MIT. John has dropped out of Harvard and 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. We had a meeting with Peter Thiel. Uh and sort of uh you know, just as in this conversation, we sort of told them structurally what we saw as being all the kind of major flaws in PayPal. Uh you know, we we Um

looking back on it, I I sort of uh cringe a little bit at uh how uh impolite a guest I must have been again. Exactly, and co-foundered screen enough, yeah. Right, exactly. And so you know at at at great length um uh sort of belabored the point about uh sort of how they'd gone about things wrongly. Um But Peter being uh such a sort of you know an inveterate contrarian Um was quite sympathetic to this case and decided on the spot, uh to make, you know, a fairly material investment of two hundred thousand dollars.

So so what Did Peter TLC end stripe? Like w was it just Easy to use. I mean w was it the kind of thing where a a software developer would be like, Oh my God, somebody has finally figured this thing out. I I think many of the developers.

We're 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 was

We were fortunate to be a part of was the fact that now For Internet businesses Payments is actually part of the strategy that matters. It it 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 it was just something that needs to be taken care of and i the 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. So okay, so for people who are non-technical, non-coders, and I will account myself among them, explain how this works. Basically You're left.

And uh I I take a lift and I pay the driver, I just click pay and I've the lift or you guys I guess have my credit card. And so you have to communicate with my credit card company to um make sure that they are charging me Uh so then my bank account will be able to pay the credit card company later Um d presumably you also have to pay the credit card company, right? Like they're taking a cut of your money too. 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 for any time use it in future. That is securely sent directly to Stripe. So it's not, you know, hitting uh or it's not being stored on other servers. And then when a business wants to actually, you know, uh accept money and charge your credit cards, and you know, over time it's now more than just credit cards, bank transfers and different international payment methods and things like this. But the business that wants to charge your credit cards, they say Hey, I'd like to charge this card twenty dollars.

And and we put money in their bank account and we have h handle Everything that goes on. between that instruction and the money 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 minutiae of the financial system. Right. 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. Right. And and that at a technical level is is is kinda how it works. So my understanding is that It was basically seven lines of code. Which I guess from a coding um 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.

That's pretty much it. We had lots of stories of people integrating payments in an afternoon or in an evening, and then launching their business the next day. Uh and that just worked consistently. That was a big break from what had it prevailed before. And once you started to gain momentum and you launched and I guess you launch you launched publicly in 2011, right? That's right. Um, how did you convince Companies to to trust this to work with you. Who's your first big customer client?

Well Because we are serving high potential companies and startups and fast growing companies, Uh w we grew with our customers. So back in the early d in the very earliest days. Yeah, those companies were pretty small. But some of them start to, you know, become pretty big, like Lift and Shopify and so on became customers of Stripe. And of course Lift and Shopify have now become, you know, have very successful companies in in in their own right. And how did you get them to work with you? Did you just meet meet the people who were working at those companies and and you just developed a relationship with you?

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. Uh uh and there was no product that enabled a really good driver payment experience. And so w we've kind of co-evolved with them to enable the best And user experience. And and your re m m revenue stream was a percentage of every transaction that would that that was going to and that is the way that that You Get paid.

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. And it's like I think it's like two point nine percent or something transaction fee, right? W w 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. It could be a revenue stream for them, like D did w were there people who to try to Or was it just uh once you started, you just the momentum was b the wind was behind you?

Well in this department we really try to tried to approach things differently to I think how technology companies often tend to. Uh 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 partnered closely with banks and now we work with banks in many different countries. And and not just banks, but sort of other financial institutions besides. But we really wanted to build a stripe as sort of a multi-decade thing. And if we're going to go and sort of do it that way, we we really had to do it right. So as you started 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 um companies square and stuff say We're just gonna do what they do. Did they try? Well, what we were doing didn't look that important back then. Uh it wasn't the case that sort of we immediately uh or w what we were doing immediately

uh looked like it was obviously working and obviously of of major significance. We were Back then, in the eyes of others, sort of working with all these inconsequential little companies uh and making their lives a bit easier, but well, was this mobile payments thing actually going to amount to much? uh in aggregate were ac were there actually that many developers that would be starting these successful companies. I mean again it kinda gets back to this pessimism around technology that kind of existed and prevailed around 2009, 2010 and so on. And this is one of the great facts about our industry. uh is that you cannot turn

Money. Into great products. uh as a kind of mechanical operation. Uh If it were possible.

There would be many more great iPhone competitors. Facebook would have been long since eclipse by MySpace or Yahoo or Google or Facebook would be really good to use. The the intricacies. of good product, of good design, of good architecture. Those can't be trivially replicated. competitive advantage was

Was you guys. I think it's Um An amorphous. combination for any of these products and I I don't mean to single stripe out.

For any great product, some amorphous combination of sort of the ethos and the culture and the people and Sort of the work style. And Kind of a a fingertip sense.

For the priorities. And all these things that are just like very hard to copy. I mean, it's the the sort of a continuum, uh, where uh at one end, you know, you're um You're manufacturing steel. And at the other end, you're you know you're manufacturing novels. And in steel manufacturing, sure, you can turn capital into more, better, cheaper steel. And at the other end it's very hard to know how you how you turn the money into kind of better writing.

And software is 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. Google had every advantage against Facebook. They had uh 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. When when you think of this number Last year nine point two billion dollar valuation.

Does that mean anything to you? I mean, is it abstract, do you think Man, I'm rich. Or or uh do you even does it even cross your mind. I mean m must at some level, right? It's been my experience that people pay a huge amount of attention to the headline numbers of of Silicon Valley companies. And so, you know, Stripe is a company that's been valued in in fundraising at at night, you know, nine point two billion dollars or 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 to date, because the much more relevant fact is what we release in twenty eighteen, what we release in twenty eight nineteen, what what Stripe's global expansion looks like and uh and things like that. U you don't have a valuable company unless the company continues to execute. It's very dynamic. It's a very careful way of saying, Hey, I could lose this all at any moment. Yeah. What? How much of of of the success of this company do you attribute to

your skill and your You know, your intelligence and how much to luck. I think the question is less about Yeah, how much can be attributed to my skill and intelligence, uh and instead to

The skill and intelligence of the Hundreds of people who've gotten the striped 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 being so many people who just came up with So many smart ways of doing things and you know in many cases toils. 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. groups of people who are smarter and harder working than us. who just didn't have the same good fortune. You are still both of you guys are still So young. I mean you know

You're at a point in your life where Less so every day but at a point in your life where lots of People are just starting out, y you know, at the same age. 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, Massachusetts, to raising two million to

being valued at twenty and then a hundred and then billion and then today Yeah. More almost ten billion dollars. When did you Did you ever have a moment where the Two of you sat back and said

Wow, look what we built. There's never really been time for that. Uh um and there's nothing like a young company to Every morning remind you that there's so much

So much that's not yet working the way it should be. I mean it's it's really quite visceral. You wake up in the morning and there are twenty emails in your inbox that are sort of somehow all related to things that you're doing badly or wrongly. There's never a moment when it feels successful. And there's a quote that I Cyclist. It never gets easier. You just go faster. And I used to kind of

And then I'm not going to be able There's a lot of sort of uh 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. 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 gonna feel on your five hundredth bike ride. You'll just be going much faster on the five hundredth bike ride. And it kinda feels like that in this startup where Every day now the problems and challenges uh and

you know, visceral pain is is just as acute as when we were starting out. The problem is just of a different form. It's 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. Uh and we still have quite a ways to go there. Patrick and John Collison, founders of Stripe. In 2017, John Collison was described as the youngest self-made billionaire on earth. And I know you heard us talking about their valuation as being like nine or ten billion dollars. Well remember, we did that interview back in 2018. Today, just two years later, Stripe is valued at$35 billion. And please do stick around because in just a moment we're gonna hear from you about the things you're building.

Hi, I'm Anush Samarodi and I am the new host of NPR's TED Radio Hour. I am so excited because we are working on a bunch of new amazing episodes. We're exploring big ideas about reinvention, making amends, and the psychological effects of climate change. Our first show drops March 13th. Please join me. Hey, thanks so much for sticking around because it's time now for how you built that. And today we're updating a story that we ran about a year ago with Kirby Eardaley from White Salmon, Washington. And Kirby and his family spend a lot of time at the beach, which means they have all observed one of the great wonders of marine life, the free flying sun umbrella. When the wind comes up, those things blow down the beach like crazy. And you hear about it all the time. You hear about the beach umbrellas that fly through the air and you know land on somebody's car. And those things blow around because they're not always well anchored, right? In a big gust of wind a metal stake can just fly off the ground.

And Kirby just wasn't satisfied with the stuff that was on the market. Lots of Inexpensive tent stakes that you pound in with a hammer or a rock. But there was no really good toolless solution that would hold in all weather conditions and that would work in sand, it would work in clay. And because Kirby is a professional woodworker. He started to tinker around with ideas for a better ground anchor.

And he was inspired by one thing. in particular. You've probably seen it and it looks like a gigantic wine cork opener. And in case you haven't seen this giant wine cork opener, Think? Pets.

Because people use this corkscrew thing as kind of an anchor to help keep their dogs tethered outside. And Kirby thought a big screw like that could be great for anchoring all kinds of things. because the screw threads have quite a bit more surface area. It increases the surface area between the soil and the ground anchor. And more surface area means a firmer hold in the ground. Anyway, Kirby started experimenting with prototypes and looking for a company to make the screw. And while he's doing all this, he has this huge earth shattering epiphany.

The internet. is amazing. Kirby was able to locate the perfect recycled plastic to make the screws. and the perfect injection molding company that could make them. You could screw this into the ground, anchor your stuff, and the hold is pretty darn incredible. And then Kirby did a Kickstarter campaign about four years ago. He raised$45,000 and boom!

His product was launched. The crazy thing that kept happening over and over again is we would get a phone call or an email that says, I'm going camping on Friday. I have to have these for the weekend. And so I I don't know how we went from this product that never existed to something that people have to have for the weekend and they're upset if they're not gonna be able to get it. Okay, great story so far, right? But then one morning, about two years ago, Kirby gets

This email. You know, an angry email. and it said I ordered your screws from this promotion you did on Facebook and I haven't gotten anything yet. And I thought I don't even know what this is. We were not running a promotion on Facebook. And you probably know where this is headed. Scammers were starting to get into Kirby's business. They were copying his photos and design and advertising cheap knockoffs and way undercutting his prices. So as soon as we would report one of these for

trademark violations is how we would take them down. One would disappear and then Two more would pop up. So Kirby actually did something kind of unusual. He sent his own product for free. to anyone who had made the mistake of buying a cheap knockoff. Meanwhile, some of his loyal customers kept reporting the knockoff sites and leaving comments warning new customers about the scam.

we created this kind of international police force, probably of fifty or sixty people, that would email us every day and say, here's another one. And that helps for a while, but when we last checked in with Kirby, he told us that the counterfeit screws kept showing online. So in August of last year, he hired a law firm which has now gone after 85 knockoff companies with more lawsuits on the way. As for sales, Kirby's doing pretty well. He hopes to do about a million dollars in revenue this year. This product. It's called Orange Screw.

To hear more about it or hear previous episodes, head to our podcast page, how IbuiltThis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. And thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts, and while you're there, please do give us a review. You can also write to us at hibt at npr.org, and if you want to follow us on Twitter, it's at how I built this or at SkyRoz. Our show was produced this week by Thomas Lou, with music composed by R teen Arab Lui. Thanks also to Julia Carney, Candace Lim, Niva Grant, and Jeff Rogers. Our intern is Ray Toll. I'm Guy Raz, and you've been listening.

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