this week when key studies with the biz
dock I took one of your suggestions and
it’s stripe the global payments company
that’s in a war with PayPal where did
they come from
where are they going and how did they
get to a ten billion dollar valuation
stripe the global payments company that
seemingly has come out of nowhere but
actually they’re about eight years old
first I’m going to take you through the
history then I’m going to take you
through their product features and then
I’m going to take you through where I
think they’re going including a path
that has come to some amazing valuations
specifically a ten billion dollar mark
that they just recently passed let’s
start with the history the brothers John
and Patrick Collison they have a dream
like many entrepreneurs do like many
brothers have and they want to build an
online payments company they see
opportunities to help people that are
building an e-commerce company work on
their company work on their product work
on the essence of what they’re doing not
have to spend a lot of time in the
complicated matter of getting
relationships with payment processing
interchange companies banks all the
things you have to do to receive money
over the internet and if you’re a
company maybe like lyft or uber get the
money back out to people that are in
your marketplace like your delivery
people these are a lot of the issues
that people like instacart have as well
money’s got to come in quickly
accurately without fraud money’s gotta
come out quickly accurately not fraud
and people like lyft they want to build
a great lyft app with maps and features
so that you and I can use it they don’t
want to be fussing around with all of
the infrastructure that’s required to
build the payments into their company
and that is exactly the problem that the
Collison brothers set out to solve with
stripe in 2010 what do they do they get
into Y Combinator my favorite
accelerator and they graduate with a
little bit of seed funding a year later
they raise two million dollars from
Peter Thiel oh there’s a familiar name
in the payments industry and andreessen
horowitz so now they’ve got a highly
credible money that’s come in two
million dollars you could call it sort
of an advance
seed coming out of Y Combinator
incubator not really quite as serious a
but it doesn’t really matter
they’ve got credibility from Y
Combinator and super credibility from
some votes of confidence from two of the
best early stage investors in Silicon
Valley at this time they were in a beta
what a beta means is they’re a select
number of companies invited to test and
use the system to take money and to get
money out to the marketplaces or on
their e-commerce websites then they went
live in September of 2011 and to be
accurate I think it was September 29th
2011 they went live in public taking
more customers in more developers in
more companies don’t want to use it and
they are now effectively public coming
out of the beta now beta is important
because it can be a controlled
environment where you tell somebody hey
if you’re gonna be in my beta you need
to accept some growing pains on my
software or my product platform in
exchange you get to use it early and be
part of the beta and a company might say
well you know what I’ll do that because
I like the problems you’re solving
they’re gonna be beneficial to me so I’d
like to be part of that beta
that’s how developer betas work there’s
also betas that maybe products for you
and me as consumers you might have been
using Google Maps for a long time and
saw the Google Maps beta icon right at
the top of the page for years
nonetheless betas usually are a tightly
controlled period with the beginning
middle and end of testing with full
awareness on the people in the test that
this is not the final product this is
the near final product and what you do
in the beta is going to be instrumental
in bringing the first one to market
which happened September 29 2011 well
they had a tremendous start and acquired
a lot of customer base in terms of
companies wanting to use it and then in
February they’ve got good traction some
new customers and they raised eighteen
million dollars led by Sequoia now
they’ve got very high quality set of
investors along with the notoriety that
comes with being a successful Y
Combinator graduate in short order
they’re just a few months they
another 20 million Sequoia participating
again and this time General Catalyst
and AMEX ventures that’s right Amex
ventures that’s American Express
ventures which is sometimes referred to
as corporate venture capital when an
established company like American
Express whose primary business is not
investing sets aside of fun and makes
investments in it that are going to
bring new technology or products or
services to American Express and when
they invest in this they get to be kind
of on the inside of seeing it develop so
I would imagine American Express would
want to get access to that technology or
services before other credit card or
financial services institutions would
nonetheless another 20 million gets
raised and now they’ve got 50 million
dollars has been raised during this time
we move forward and they just get
traction traction traction and a little
less than two years later in January of
14 they raised 80 million dollars now
how much traction well at the time they
raised the 80 million the investment
community seemed to think that they were
worth one point seven billion dollars
the momentum is building the validation
is in place and things really pick up
when you’re in market places such as
lyft or uber or what they’re doing your
proliferation can go on what’s called a
j-shaped curve exponential very very
quickly and that drives valuation
because from your product validation and
traction over a short amount of time
comes extreme valuations that run quick
in a Silicon Valley a billion-dollar
valuation is referred to as unicorn
status and as we can see they ran past
that in a hurry how much momentum and
how fast let’s take a look at what
happened with the next two tranches of
funding after that January tranche at a
1.7 billion dollar valuation validating
them as a member of the unicorn Club
they raised 70 million dollars general
catalysts leading that and coming along
to add to its previous investment
3.4 billion dollar valuation which is
double the valuation earlier that year
and then just months later they raised a
hundred million dollars at a four point
nine billion dollar valuation that’s a
big number and there’s only one word for
that and that is damn that is a huge
increase on valuation in such a short
time it is on Elon Musk rocket to Mars
well they made that money last just shy
of two years and then in November of 16
they raised another hundred and fifty
million dollars at a nine point 1
billion dollar valuation that’s almost
good for another damn this time Capital
G was part of it capital G is a venture
fund inside Google remember I mentioned
Amex and corporate venture capital well
if you take a look you have capital G
visa and Amex strategic investors were
now in the boat along with traditional
venture investors what’s the difference
a strategic investor is usually referred
to as a company not normally in the
financial business but for whom your
product or service is strategic to their
vision for the future
in other words venture capital investors
are providing venture funding startup
funding in tranches to startups to grow
forward for a financial return when you
get Amex and Visa and Google involved
there’s a financial return as well
because they’re carefully managing their
CVC fund corporate venture capital fund
I mentioned a minute ago but they’re
also looking for strategic value to be
brought to them in services that they
can get a hold of and make their own
product better that’s the difference
between a strategic investor and a
venture investor
and strategic investors come along
usually later and can often be a key
propellant going to the future because
they could be a customer they can also
be an early date with someone who’s
going to be a buyer and write a check
for the whole company later on so that’s
the history how they amassed some
tremendous venture capital partners and
some great strategic partners now if
they’re head-to-head with PayPal Tom why
do you think that they were successful
wouldn’t PayPal be the existing choice
and just squash all
competitors well you might think that
but it’s not as easy as that there’s a
lot of ways that a fast follower can
improve what a fast follower is nothing
more than a second player in the market
who’s keeping an eye on the leader and
doing everything the leader does but
also adding things to it and enhancing
the product similar to drafting and
racing come up behind the other person
let them push the air out of the way and
pass them when you get the opportunity
it’s very much like that in business in
other words if you watch PayPal go
through and you see things that were
issues for PayPal maybe data leakage
fraud and things like that and you say
aha if I build something similar to them
I better address those issues very
successfully so I can say well I’m
better than PayPal because of these
things that have just happened I’m gonna
talk about the things that I think
differentiated them because there’s
nuances to it that add up to be a big
difference if you just put the rates and
fees side-by-side PayPal and stripe are
charging companies to use their service
really very similar rates there’s
differences on international PayPal may
do this stripe may not the minor
differences there but for the core
markets and the core fees you go right
down it it’s very very similar one of
the things that stripe did to set them
apart as they said we want to be
developer centric well what does that
mean they want a customer like OpenTable
or lyft or Kickstarter or instacart or
Yelp they want them to work on their
offering not worrying about the payment
infrastructure they want this to be very
easily integrated but they wanted it to
be also adaptable and so one solution is
you make it in a box and you say here it
is plug it into your website but what if
the developer wants some variation and
wants to do some adaptive programming to
a core piece of code well they allow you
to do that they also allow what’s called
data portability
now here’s what data portability is over
time when you have stripe integrated
with your website you’re gonna build up
a library of customer names addresses
billing information and credit card
numbers X
operations what do you do with all that
well you protect it with your life and
you better have it in very tight
security environment stripe provides
that for you but what if you decide you
don’t like stripe anymore and you just
want to take it and go to PayPal or go
to some other processor that you’re
gonna work with and integrate that with
your website well the guys at stripe
said you know what we believe in data
portability for two reasons it’s a
selling point if you don’t like stripe
you can take your credit card
information and move it to another
processor second it puts the pressure on
stripe to deliver great service great
features great support every minute of
every day because they’ve given you the
ability the keys to your own handcuffs
PayPal is legendary for being very
finicky freezing your data and refusing
to let people take the credit card
information to a new processor in other
words PayPal is like Hotel California
you can checkout any time you want but
you can never leave whereas stripe is
saying hang on I’m gonna let you have
data portability and it’s on me to
deliver every day to make sure you stay
that puts the pressure on everyone
inside stripe to make sure that all of
the websites and the integrations that
they put on are in the hands of happy
customers I think we can agree that
shows a great deal of confidence in the
company the people and the product to
give you that data portability option I
also think there’s what I call a lots of
littles let’s take a look at him there
are some sub products that make up the
overall stripe offering one of which is
Sigma
it’s a reporting tool now what’s the
difference between a reporting tool and
a reporting system a reporting system is
usually written in German you can’t have
dis fund or dis fund or dis fund and
that’s all you get and it’s very strict
so I’m joking about the German but you
understand what I mean you can have the
reports like this but you can’t
customize them if they’re not perfect
for you sorry about that
there’s the report library there’s what
you get with what they did with Sigma is
they make a reporting tool so you can
get some standardized reports out of it
but if you want to get in there and
adapt the query which is nothing more
than that fancy
word for the request you’re making of
the database to give you a report they
let you do it and they give you a lot of
power over it but they make it simple
the second thing they offer is radar is
a fraud confirmation and validation tool
now that’s critical in the modern world
we live in so this is key to a small
company maybe making a market place
online and they don’t have time to deal
with the fraud they have to choose a
partner that’s going to keep it tight
because of customer confidence in you
know what if your lift and customer
confidence blows up the first year
you’re there because of credit card
concerns guess what you’re done people
like you and me are gonna say hey I
heard about that I don’t know if I trust
those guys well it all has to be there
radar is that product to provide
iron-fisted response to fraud and give
you great controls for confidence in
your business by your bank and confident
in business by the customers that are
using it then we come to Atlas it’s a
company in a box with e-commerce
end-to-end built in what is it about
well what if you took one of those
services that helps you create your
company
hey in five minutes you can create an
LLC or this well that’s kind of
straightforward but you need it to be
for an e-commerce company well what if
you had a lawyer that’s already set up
to do that right next to all the data
integration and all the tools that you
need to add ecommerce to your site
that’s what Atlas is company creation
banking agreements everything you need
along with the powerful stripe product
to offer payments and be able to pay the
vendors yet just like an insta cart
receiving money from a consumer who buys
the groceries and paying the driver that
delivers a grocery that’s a marketplace
being able to put that technology into
instacart to build the marketplace and
all the corporate formation documents
that and instacart would need that’s
Atlas everything in one place so if you
have a dream idea of how to build an
e-commerce system or a marketplace like
that stripe becomes the one place that
you can go to that also gives you
powerful reporting options powerful
fraud protection and a developer centric
model so
you can adapt it a little bit to what
your vision for your company is but it’s
still easy enough that the original
vision that the Collison brothers set
which is build your company build your
product and we will help you make all of
the e-commerce integration easier don’t
spend the time on that spend the time on
your vision for instacart or whatever it
is that you’re building in addition to
atlas just recently like weeks ago they
announced stripe is also going to offer
cards the cards can be branded for an
affinity group which is a fancy way of
saying a white label on the front so if
you wanted to put instacart or Yelp or
deliver rooooar DocuSign whatever it is
you wanted to put on the front of the
card you could do it and you’re also
going to offer some benefits that a
percent of the feed the normal credit
card feed that gets collected is gonna
go back to whoever has the name on the
front of the card
stripes customer so now they’re actually
offering credit cards that will
integrate with the stripe system but
they can be used elsewhere
which i think is a very natural
progression moving forward also being
successful offering your own credit card
and looking back and noticing that you
have a couple strategic investors in
Visa and American Express it also could
be a glimpse of a potential acquirer in
the future imagine if a commercial bank
or Visa buys them for what would now
probably be in the eleven the thirteen
billion dollar range and incorporates
them into the services that they have
for e-commerce companies right now I
think that’s a powerful combination
because merchant services and the things
that have been tacked onto them at some
of the commercial banks are nothing
compared to the power that stripe can
bring to that relationship so if your
Chase or your Citibank or Wells Fargo
actually nevermind Wells Fargo go back
and look at the case study I did you
know the fraud written corpse that is
Wells Fargo I would never go back to
them ever go watch the case study we’ll
put the link down there for you so you
can see it but imagine one of those
commercial banks adding that to their
services and buying this it’s very very
natural which shows you how these things
can go end to end remember way back it
was eBay that bought PayPal
once upon a time because PayPal was
doing such a phenomenal job helping eBay
make those transactions now they
subsequently respond out of eBay but you
can see how relationships especially in
financial services can quickly move from
a business relationship to an
acquisition stepping back for a second
let’s talk about entrepreneurs and some
lessons that we can take for this I mean
what can you learn from this is I like
to say if you’re running a t-shirt
company in Berlin a jelly company in
Belarus or you’re making furniture in
Indianapolis Indiana what can you learn
for this well you don’t always have to
be first
sometimes being second and picking
something that you’re gonna focus on
stripe is remarkably similar to PayPal
but when you back up and peel it back we
are gonna be developer centric and we
are gonna do that so much incredibly
better we are gonna give you a reporting
tool that will be better and so a lot of
littles with a core promise sometimes is
what you can do to compete with someone
who’s established in the market think
about pizza
how many pizza places are in the average
city lots of them there’s the big ones
you know the national change we know
about and I’m not going to give them any
love by mentioning them but then there’s
the mom and pops that maybe do this just
a little bit better that deliver just a
little bit quicker or maybe they have a
loyalty program that’s just a little bit
better there are little things that you
can do to have a lot of littles that add
up when your company may be
substantially similar remember just
because it’s done already doesn’t mean
you can’t be a fast follower and it
doesn’t take a technological leap to be
that fast follower and I believe that
stripe even though it got going years
after PayPal and on the paper if you
just compared the rates right now you
say well these are very very similar I
think these little advantages all add up
to make a clear choice and that if
you’re gonna build a new marketplace or
you’re gonna build ecommerce in it would
be striped that’s what I think about
stripe but what do you think leave some
comments below and tell me what you
think about this case study and also let
me know who you’d like to see me cover
in a case study in the upcoming weeks I
listen to you and I take suggestions
stripe came from you you can also find
me on social media on Facebook and
Twitter I’m Tom Ellsworth and on
Instagram I’m Ellsworth dot Thomas
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dock I took one of your suggestions and
it’s stripe the global payments company
that’s in a war with PayPal where did
they come from
where are they going and how did they
get to a ten billion dollar valuation
stripe the global payments company that
seemingly has come out of nowhere but
actually they’re about eight years old
first I’m going to take you through the
history then I’m going to take you
through their product features and then
I’m going to take you through where I
think they’re going including a path
that has come to some amazing valuations
specifically a ten billion dollar mark
that they just recently passed let’s
start with the history the brothers John
and Patrick Collison they have a dream
like many entrepreneurs do like many
brothers have and they want to build an
online payments company they see
opportunities to help people that are
building an e-commerce company work on
their company work on their product work
on the essence of what they’re doing not
have to spend a lot of time in the
complicated matter of getting
relationships with payment processing
interchange companies banks all the
things you have to do to receive money
over the internet and if you’re a
company maybe like lyft or uber get the
money back out to people that are in
your marketplace like your delivery
people these are a lot of the issues
that people like instacart have as well
money’s got to come in quickly
accurately without fraud money’s gotta
come out quickly accurately not fraud
and people like lyft they want to build
a great lyft app with maps and features
so that you and I can use it they don’t
want to be fussing around with all of
the infrastructure that’s required to
build the payments into their company
and that is exactly the problem that the
Collison brothers set out to solve with
stripe in 2010 what do they do they get
into Y Combinator my favorite
accelerator and they graduate with a
little bit of seed funding a year later
they raise two million dollars from
Peter Thiel oh there’s a familiar name
in the payments industry and andreessen
horowitz so now they’ve got a highly
credible money that’s come in two
million dollars you could call it sort
of an advance
seed coming out of Y Combinator
incubator not really quite as serious a
but it doesn’t really matter
they’ve got credibility from Y
Combinator and super credibility from
some votes of confidence from two of the
best early stage investors in Silicon
Valley at this time they were in a beta
what a beta means is they’re a select
number of companies invited to test and
use the system to take money and to get
money out to the marketplaces or on
their e-commerce websites then they went
live in September of 2011 and to be
accurate I think it was September 29th
2011 they went live in public taking
more customers in more developers in
more companies don’t want to use it and
they are now effectively public coming
out of the beta now beta is important
because it can be a controlled
environment where you tell somebody hey
if you’re gonna be in my beta you need
to accept some growing pains on my
software or my product platform in
exchange you get to use it early and be
part of the beta and a company might say
well you know what I’ll do that because
I like the problems you’re solving
they’re gonna be beneficial to me so I’d
like to be part of that beta
that’s how developer betas work there’s
also betas that maybe products for you
and me as consumers you might have been
using Google Maps for a long time and
saw the Google Maps beta icon right at
the top of the page for years
nonetheless betas usually are a tightly
controlled period with the beginning
middle and end of testing with full
awareness on the people in the test that
this is not the final product this is
the near final product and what you do
in the beta is going to be instrumental
in bringing the first one to market
which happened September 29 2011 well
they had a tremendous start and acquired
a lot of customer base in terms of
companies wanting to use it and then in
February they’ve got good traction some
new customers and they raised eighteen
million dollars led by Sequoia now
they’ve got very high quality set of
investors along with the notoriety that
comes with being a successful Y
Combinator graduate in short order
they’re just a few months they
another 20 million Sequoia participating
again and this time General Catalyst
and AMEX ventures that’s right Amex
ventures that’s American Express
ventures which is sometimes referred to
as corporate venture capital when an
established company like American
Express whose primary business is not
investing sets aside of fun and makes
investments in it that are going to
bring new technology or products or
services to American Express and when
they invest in this they get to be kind
of on the inside of seeing it develop so
I would imagine American Express would
want to get access to that technology or
services before other credit card or
financial services institutions would
nonetheless another 20 million gets
raised and now they’ve got 50 million
dollars has been raised during this time
we move forward and they just get
traction traction traction and a little
less than two years later in January of
14 they raised 80 million dollars now
how much traction well at the time they
raised the 80 million the investment
community seemed to think that they were
worth one point seven billion dollars
the momentum is building the validation
is in place and things really pick up
when you’re in market places such as
lyft or uber or what they’re doing your
proliferation can go on what’s called a
j-shaped curve exponential very very
quickly and that drives valuation
because from your product validation and
traction over a short amount of time
comes extreme valuations that run quick
in a Silicon Valley a billion-dollar
valuation is referred to as unicorn
status and as we can see they ran past
that in a hurry how much momentum and
how fast let’s take a look at what
happened with the next two tranches of
funding after that January tranche at a
1.7 billion dollar valuation validating
them as a member of the unicorn Club
they raised 70 million dollars general
catalysts leading that and coming along
to add to its previous investment
3.4 billion dollar valuation which is
double the valuation earlier that year
and then just months later they raised a
hundred million dollars at a four point
nine billion dollar valuation that’s a
big number and there’s only one word for
that and that is damn that is a huge
increase on valuation in such a short
time it is on Elon Musk rocket to Mars
well they made that money last just shy
of two years and then in November of 16
they raised another hundred and fifty
million dollars at a nine point 1
billion dollar valuation that’s almost
good for another damn this time Capital
G was part of it capital G is a venture
fund inside Google remember I mentioned
Amex and corporate venture capital well
if you take a look you have capital G
visa and Amex strategic investors were
now in the boat along with traditional
venture investors what’s the difference
a strategic investor is usually referred
to as a company not normally in the
financial business but for whom your
product or service is strategic to their
vision for the future
in other words venture capital investors
are providing venture funding startup
funding in tranches to startups to grow
forward for a financial return when you
get Amex and Visa and Google involved
there’s a financial return as well
because they’re carefully managing their
CVC fund corporate venture capital fund
I mentioned a minute ago but they’re
also looking for strategic value to be
brought to them in services that they
can get a hold of and make their own
product better that’s the difference
between a strategic investor and a
venture investor
and strategic investors come along
usually later and can often be a key
propellant going to the future because
they could be a customer they can also
be an early date with someone who’s
going to be a buyer and write a check
for the whole company later on so that’s
the history how they amassed some
tremendous venture capital partners and
some great strategic partners now if
they’re head-to-head with PayPal Tom why
do you think that they were successful
wouldn’t PayPal be the existing choice
and just squash all
competitors well you might think that
but it’s not as easy as that there’s a
lot of ways that a fast follower can
improve what a fast follower is nothing
more than a second player in the market
who’s keeping an eye on the leader and
doing everything the leader does but
also adding things to it and enhancing
the product similar to drafting and
racing come up behind the other person
let them push the air out of the way and
pass them when you get the opportunity
it’s very much like that in business in
other words if you watch PayPal go
through and you see things that were
issues for PayPal maybe data leakage
fraud and things like that and you say
aha if I build something similar to them
I better address those issues very
successfully so I can say well I’m
better than PayPal because of these
things that have just happened I’m gonna
talk about the things that I think
differentiated them because there’s
nuances to it that add up to be a big
difference if you just put the rates and
fees side-by-side PayPal and stripe are
charging companies to use their service
really very similar rates there’s
differences on international PayPal may
do this stripe may not the minor
differences there but for the core
markets and the core fees you go right
down it it’s very very similar one of
the things that stripe did to set them
apart as they said we want to be
developer centric well what does that
mean they want a customer like OpenTable
or lyft or Kickstarter or instacart or
Yelp they want them to work on their
offering not worrying about the payment
infrastructure they want this to be very
easily integrated but they wanted it to
be also adaptable and so one solution is
you make it in a box and you say here it
is plug it into your website but what if
the developer wants some variation and
wants to do some adaptive programming to
a core piece of code well they allow you
to do that they also allow what’s called
data portability
now here’s what data portability is over
time when you have stripe integrated
with your website you’re gonna build up
a library of customer names addresses
billing information and credit card
numbers X
operations what do you do with all that
well you protect it with your life and
you better have it in very tight
security environment stripe provides
that for you but what if you decide you
don’t like stripe anymore and you just
want to take it and go to PayPal or go
to some other processor that you’re
gonna work with and integrate that with
your website well the guys at stripe
said you know what we believe in data
portability for two reasons it’s a
selling point if you don’t like stripe
you can take your credit card
information and move it to another
processor second it puts the pressure on
stripe to deliver great service great
features great support every minute of
every day because they’ve given you the
ability the keys to your own handcuffs
PayPal is legendary for being very
finicky freezing your data and refusing
to let people take the credit card
information to a new processor in other
words PayPal is like Hotel California
you can checkout any time you want but
you can never leave whereas stripe is
saying hang on I’m gonna let you have
data portability and it’s on me to
deliver every day to make sure you stay
that puts the pressure on everyone
inside stripe to make sure that all of
the websites and the integrations that
they put on are in the hands of happy
customers I think we can agree that
shows a great deal of confidence in the
company the people and the product to
give you that data portability option I
also think there’s what I call a lots of
littles let’s take a look at him there
are some sub products that make up the
overall stripe offering one of which is
Sigma
it’s a reporting tool now what’s the
difference between a reporting tool and
a reporting system a reporting system is
usually written in German you can’t have
dis fund or dis fund or dis fund and
that’s all you get and it’s very strict
so I’m joking about the German but you
understand what I mean you can have the
reports like this but you can’t
customize them if they’re not perfect
for you sorry about that
there’s the report library there’s what
you get with what they did with Sigma is
they make a reporting tool so you can
get some standardized reports out of it
but if you want to get in there and
adapt the query which is nothing more
than that fancy
word for the request you’re making of
the database to give you a report they
let you do it and they give you a lot of
power over it but they make it simple
the second thing they offer is radar is
a fraud confirmation and validation tool
now that’s critical in the modern world
we live in so this is key to a small
company maybe making a market place
online and they don’t have time to deal
with the fraud they have to choose a
partner that’s going to keep it tight
because of customer confidence in you
know what if your lift and customer
confidence blows up the first year
you’re there because of credit card
concerns guess what you’re done people
like you and me are gonna say hey I
heard about that I don’t know if I trust
those guys well it all has to be there
radar is that product to provide
iron-fisted response to fraud and give
you great controls for confidence in
your business by your bank and confident
in business by the customers that are
using it then we come to Atlas it’s a
company in a box with e-commerce
end-to-end built in what is it about
well what if you took one of those
services that helps you create your
company
hey in five minutes you can create an
LLC or this well that’s kind of
straightforward but you need it to be
for an e-commerce company well what if
you had a lawyer that’s already set up
to do that right next to all the data
integration and all the tools that you
need to add ecommerce to your site
that’s what Atlas is company creation
banking agreements everything you need
along with the powerful stripe product
to offer payments and be able to pay the
vendors yet just like an insta cart
receiving money from a consumer who buys
the groceries and paying the driver that
delivers a grocery that’s a marketplace
being able to put that technology into
instacart to build the marketplace and
all the corporate formation documents
that and instacart would need that’s
Atlas everything in one place so if you
have a dream idea of how to build an
e-commerce system or a marketplace like
that stripe becomes the one place that
you can go to that also gives you
powerful reporting options powerful
fraud protection and a developer centric
model so
you can adapt it a little bit to what
your vision for your company is but it’s
still easy enough that the original
vision that the Collison brothers set
which is build your company build your
product and we will help you make all of
the e-commerce integration easier don’t
spend the time on that spend the time on
your vision for instacart or whatever it
is that you’re building in addition to
atlas just recently like weeks ago they
announced stripe is also going to offer
cards the cards can be branded for an
affinity group which is a fancy way of
saying a white label on the front so if
you wanted to put instacart or Yelp or
deliver rooooar DocuSign whatever it is
you wanted to put on the front of the
card you could do it and you’re also
going to offer some benefits that a
percent of the feed the normal credit
card feed that gets collected is gonna
go back to whoever has the name on the
front of the card
stripes customer so now they’re actually
offering credit cards that will
integrate with the stripe system but
they can be used elsewhere
which i think is a very natural
progression moving forward also being
successful offering your own credit card
and looking back and noticing that you
have a couple strategic investors in
Visa and American Express it also could
be a glimpse of a potential acquirer in
the future imagine if a commercial bank
or Visa buys them for what would now
probably be in the eleven the thirteen
billion dollar range and incorporates
them into the services that they have
for e-commerce companies right now I
think that’s a powerful combination
because merchant services and the things
that have been tacked onto them at some
of the commercial banks are nothing
compared to the power that stripe can
bring to that relationship so if your
Chase or your Citibank or Wells Fargo
actually nevermind Wells Fargo go back
and look at the case study I did you
know the fraud written corpse that is
Wells Fargo I would never go back to
them ever go watch the case study we’ll
put the link down there for you so you
can see it but imagine one of those
commercial banks adding that to their
services and buying this it’s very very
natural which shows you how these things
can go end to end remember way back it
was eBay that bought PayPal
once upon a time because PayPal was
doing such a phenomenal job helping eBay
make those transactions now they
subsequently respond out of eBay but you
can see how relationships especially in
financial services can quickly move from
a business relationship to an
acquisition stepping back for a second
let’s talk about entrepreneurs and some
lessons that we can take for this I mean
what can you learn from this is I like
to say if you’re running a t-shirt
company in Berlin a jelly company in
Belarus or you’re making furniture in
Indianapolis Indiana what can you learn
for this well you don’t always have to
be first
sometimes being second and picking
something that you’re gonna focus on
stripe is remarkably similar to PayPal
but when you back up and peel it back we
are gonna be developer centric and we
are gonna do that so much incredibly
better we are gonna give you a reporting
tool that will be better and so a lot of
littles with a core promise sometimes is
what you can do to compete with someone
who’s established in the market think
about pizza
how many pizza places are in the average
city lots of them there’s the big ones
you know the national change we know
about and I’m not going to give them any
love by mentioning them but then there’s
the mom and pops that maybe do this just
a little bit better that deliver just a
little bit quicker or maybe they have a
loyalty program that’s just a little bit
better there are little things that you
can do to have a lot of littles that add
up when your company may be
substantially similar remember just
because it’s done already doesn’t mean
you can’t be a fast follower and it
doesn’t take a technological leap to be
that fast follower and I believe that
stripe even though it got going years
after PayPal and on the paper if you
just compared the rates right now you
say well these are very very similar I
think these little advantages all add up
to make a clear choice and that if
you’re gonna build a new marketplace or
you’re gonna build ecommerce in it would
be striped that’s what I think about
stripe but what do you think leave some
comments below and tell me what you
think about this case study and also let
me know who you’d like to see me cover
in a case study in the upcoming weeks I
listen to you and I take suggestions
stripe came from you you can also find
me on social media on Facebook and
Twitter I’m Tom Ellsworth and on
Instagram I’m Ellsworth dot Thomas
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