Hi and welcome to the A16Z podcast. This conversation is between A16Z general partner Alex Rampel and John Collison, president and co-founder of Stripe and covers all things payments.

They talk about building a payments business, how Stripe's business model has evolved, and how the very business of payments has changed and not since the 1980s.

The conversation was recorded as part of our summit event in November 2017.

I thought I'd open with a funny story from when I first met your brother, because you and your

brother co-founded Stripe together. I think this was 2009 or 2010. It was a Starbucks in Palo Alto,

and I thought I knew a lot about payments because I

been in the industry for a while. And I asked Patrick, how are you going to get your customers?

Where are they going to come from? How are you going to switch people from Chase Payment Tech or

from Vantive to Stripe? And I'll never forget what Patrick told me. He said, my customers do not

exist yet. Like, that was the answer.

And it was remarkably prescient because if you think about how Stripe has succeeded into this new generation of companies like Lyft, like Instacart,

pretty much any company that's starting today is almost de facto using Stripe.

So is that always the plan from day one?

We don't know who the customers are.

It's almost like product, market, future, tailwind fit.

Well, first, you've to remember, people get a lot of credit for strategies that, you know,

prove to work over time that were necessarily intentional.

I think the lesson we have all learned from the internet is one of the big mistakes you can make is underestimating how large a market is going to be. There was this pervasive sense that online, it's a way to

accept money on the internet. I mean, you probably run into this too, that it was done, that it was over.

And so I think just the fact that we had firsthand experience with the problem as software developers,

we're like, no, no, no, trust me, it's very much not solved. I think that was maybe the unique insight that we had,

which obviously led to things like realizing that, oh, there's all these new startups that are going

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