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Stripe's Patrick Collison | Micro Pessimism, Macro Optimism
19 segments available
Navigating uncertain economic conditions is part and parcel of running a business. Yet, throughout challenging times, it’s critical that startups stay committed to continually pushing the possibilities of what technology can deliver, says Stripe CEO Patrick Collison. That means leading with the guiding principle “micro pessimism and macro optimism.” Often, Collison says, this means having a relentless ability to be critical about the state of technology (including one’s own products) while still believing in its possibilities.That viewpoint acknowledges the structural tension companies face when trying to innovate in the context of economic reality, and can be the difference between persisting through challenging times or becoming a casualty of yet another tech boom and bust cycle. Collison joined Greylock general partner Reid Hoffman on our Iconversations speaker series to discuss Stripe’s early days and its evolution into the payment and financial services platform giant it is today, and his advice to startups for navigating the predictable unpredictability of business. You can read the transcript for this interview here: https://greylock.com/greymatter/micro-pessimism-macro-optimism/ Chapters 0:00 Introduction 0:17 Hamster of Scale 1:47 Being an Entrepreneur 5:42 Navigating Difficult Times 7:14 Founding Stripe 10:40 Micro Pessimism, Macro Optimism 12:41 Evolution of the Internet 15:49 Market Cycles 17:56 Progress Studies 21:27 Underrated Technologies 24:13 Co-Founders’ Relationship 26:42 Journey of Founding Stripe 28:54 Leadership Style
Segments Timeline
The Hamster of Scale
Patrick Collison introduces the concept of being a 'hamster of scale' in the context of entrepreneurship. He reflects on the misconception that larger companies have everything figured out and shares insights from his experiences at Stripe, emphasizing the importance of understanding the structural forces that drive success.
"[Music] foreign [Music] so Patrick and I are beginning to make a habit of this we were on stage last week at the Masters of the scale Summit uh and we thought we would open this up for those of you wh..."
Navigating Turbulent Times
Collison discusses the challenges entrepreneurs face during turbulent economic times, including shifts in investor behavior and consumer spending. He emphasizes the need for startups to adapt and offers advice on how to navigate these choppy waters while maintaining a focus on growth.
"a culture as good as Google right um and uh you know for my kind of outside view on that is like step one have a culture uh as as good as Google is like you know number one have the business model tha..."
Micro Pessimism, Macro Optimism
Collison introduces Stripe's guiding principle of 'micro pessimism and macro optimism.' He explains how this mindset helps the company remain critical of its products while still believing in the potential of technology, which is crucial for thriving in challenging economic conditions.
"today just you know from a from a stripe Vantage Point uh is I think uh you know rates have changed substantially and as a consequence I guess in investor Behavior has uh has changed a lot and based o..."
The Graveyard of Silicon Valley
Collison reflects on the history of Silicon Valley as a place of innovation and failure. He highlights the importance of learning from past mistakes and the need for companies to remain vigilant and focused to avoid becoming casualties in the tech industry's boom and bust cycles.
"and so on this might be an old enough group that they actually recognize well just like you know Silicon Valley is famous for being you know such a productive and prodigious cradle for new technology ..."
Prioritizing in Abundant Times
Collison discusses the necessity of prioritization during times of capital abundance. He contrasts the expansive ambitions of companies in good times with the need for focused strategies during downturns, emphasizing that this focus can lead to greater competitive differentiation.
"this right now but you know if I disassociate myself from stripe and just kind of think as an observer uh uh sitting in 2032 I suspect that on average this is very good for the Silicon Valley ecosyste..."
The Yin and Yang of Entrepreneurship
Collison shares insights on the balance between technology and business acumen in entrepreneurship. He reflects on his journey with Stripe and the importance of embracing a business mindset while maintaining a passion for technology, highlighting the evolution of leadership styles.
"well I actually think what's embedded in what you're saying is you want to keep the same level ambition but it has to be through a focused aperture rather than okay yes we can do that too and we can d..."
The Yin and Yang of Technologists and Business
Patrick Collison discusses the balance between being a technologist and a business person in the startup ecosystem. He reflects on his early days at Stripe, emphasizing the importance of recognizing the business side of technology while maintaining a critical perspective on product quality. Collison draws parallels with Steve Jobs' evolution, highlighting the necessity for startups to embrace their business identity and focus on metrics like hurdle rates and growth curves.
"least um uh aspired to being some kind of technologist John was always super interested in business uh and you know I was, um early, in, Stripes, history, uh um I pitched John on well we should just m..."
Micro Pessimism, Macro Optimism Explained
In this segment, Collison elaborates on the concept of 'micro pessimism and macro optimism.' He explains the cognitive dissonance startups face, needing to be critical of their current products while maintaining a long-term vision of success. This dual mindset is crucial for fostering a culture that encourages honest feedback and innovation, allowing teams to acknowledge shortcomings without losing sight of future potential.
"yes and actually this is a book and uh some of you probably have read it and it's kind of famous in some small little um sort, of, factions, um, at, The, Outsiders okay I'm seeing some nods and smiles..."
The Internet's Evolution and Future Potential
Collison shares his insights on the current state of the internet, likening it to a vibrant city still in its early days. He discusses the vast opportunities for innovation across various sectors, particularly in vertical SaaS, and emphasizes that many industries remain inefficient and analog. By highlighting examples like agricultural technology, he illustrates the potential for software to revolutionize traditional practices and drive efficiency.
"this kind of microplasma pessimism is a macro optimism part of what we're trying to do is to give people kind of structure acknowledge this tension and to give you a structural permission to be extrem..."
Navigating Economic Cycles as a Startup
In this segment, Collison reflects on the economic cycles that startups face, drawing from Stripe's experience during a prolonged bull market. He acknowledges the challenges of downturns and the importance of resilience in navigating these periods. By sharing anecdotes from other companies like Amazon, he underscores the intensity of these cycles and the need for startups to adapt and thrive amidst uncertainty.
"distribution you know Carlota Perez and sigmoid so uh yeah I don't quite know how to quantify it but you know if I had to just offer and again based on what we see from our customers and all the diffe..."
Learning from Ireland's Growth
Reflecting on Ireland's transformation from a struggling economy to a thriving one, Collison shares personal anecdotes about the cultural awareness of development ideas. He highlights the importance of recognizing the potential for improvement and the impact of adopting the right policies. This segment illustrates how historical lessons can inform current entrepreneurial endeavors and the pursuit of progress.
"so you know Patrick is comfortable uh expositing the hamster view on a wide variety of subjects which is good uh so progress studies why did you do the Atlantic article what's the key thing we just ha..."
The Necessity of Innovation
Collison argues that we are not at the end of history and that significant challenges remain unsolved, such as climate change and mental health issues. He stresses the need for continued innovation and the role of startups in addressing these problems. This segment serves as a call to action for entrepreneurs to recognize the ongoing necessity for progress and the potential for impactful solutions.
"I grew up um I think this was actually very uh um people very culturally aware of this uh because in 19 as recently as 1960 Ireland was a destitute uh autarkic insular Catholic theocracy um and you kn..."
AI: The Next Frontier
In this segment, Collison discusses the potential of artificial intelligence (AI) and its evolving role in technology. He reflects on his previous skepticism towards AI and acknowledges the tipping point that may be approaching. Collison highlights the significance of AI advancements and their implications for entrepreneurs, suggesting that 2023 could be a pivotal year for the technology.
"kind of reached you know the peak I guess you know post the financial crisis uh in uh or extreme pre uh around 2008 so I grew up in the midst of this and but you know as a result of that the kind of S..."
Transformative Technologies Ahead
Collison elaborates on the transformative potential of AI technologies, including large language models and image generation. He discusses the historical context of AI development and the recent breakthroughs that suggest a significant shift in capabilities. This segment emphasizes the importance of staying informed about emerging technologies and their potential to reshape industries.
"problems and so trying to find some common hashtag that could generalize Beyond just you know uh say you know we should have more startups like what's the unifying sentiment there that's more expensiv..."
The Economic Impact of AI
Collison analyzes the current economic impact of AI technologies, noting that while the sector has not yet reached substantial revenue levels, the potential for growth is immense. He discusses the market's current skepticism and the possibility of a sudden shift in perception as AI technologies mature. This segment encourages entrepreneurs to consider the long-term implications of AI on their businesses.
"something more to this whole thing than you know good classifiers or whatever and I think that has not really been borne out to date and the aggregate ARR of the AI sector I mean of all the gpd3 and o..."
Co-Founding Dynamics
Collison shares insights on the unique dynamics of founding a company with a sibling. He reflects on the challenges and advantages of having a co-founder who shares the same experiences and context. This segment highlights the importance of collaboration and mutual support in navigating the complexities of building a successful company.
"the market is saying it hasn't really mattered thus far right um I think that I mean there are there are lots of things that don't matter and are relatively economically inconsequential until suddenly..."
The Reality of Entrepreneurship
In this concluding segment, Collison discusses the inherent difficulties of entrepreneurship, regardless of success. He shares a quote that encapsulates the relentless nature of building a company, emphasizing that challenges persist even as one progresses. This segment serves as a reminder of the resilience required in the entrepreneurial journey.
"as a co-founder group um okay I'll try to give a very attenuated answer because I don't know you could probably bore someone for hours and you know talk about all the co-founder Dynamics but and um so..."
Separating Identity from Leadership
Collison shares insights on the evolution of his leadership style over the years. He stresses the importance of not conflating personal identity with leadership roles, advocating for a mindset that views leadership as a skill set to be developed rather than an inherent part of oneself. This perspective allows for growth and adaptability in leadership, which is crucial for long-term success.
"um and then so the second part of your question yeah I mean I don't know the the big one is um um it's um how do I phrase that um early on I think I think both of us were much more insecure um not you..."
Focus on Leadership Teams
In this segment, Collison advises entrepreneurs on the critical shift in focus that occurs after achieving product-market fit. He highlights the necessity of building a strong leadership team and emphasizes that the dynamics of leadership become paramount at this stage. Collison encourages founders to invest in their leadership capabilities to navigate the complexities of scaling a successful business.
"differently more of this less of that I mean there are lots of specific things but actually I think the meta one is that from which most of the others follow uh is you are not your leadership style bu..."