wished for and use different forms of payment and currency for it. Even more so, as we get closer to more recent times, new technologies have emerged and made our lives easier. And, with that, the currency field also suffered some major changes, with online payment methods being slowly introduced into our day-by-day lives.
Online payment methods offered the flexibility no currency system ever did before. It is easy to use, it is accessible and it happens almost instantaneously. And, the Collison brothers knew how to leverage this new technology way ahead.
Building a billion-dollar company and transforming your startup into a unicorn is no easy job, we can all agree with that. The two startup co-founders came to the USA from a small village in Ireland and pursued their dream of creating a digital platform that allowed small businesses to receive payments from all over the world. Nowadays, the online payment method, Stripe, has provided payment services and software alternatives since 2011 providing fast solutions for everyone. However, Stripe was not the first business that they developed.
The first business that they worked on was Auctomatic. The digital platform is an action-based marketplace management system that comes in handy for individuals who sell on online platforms such as eBay. Their goal was to raise specific problems that users encountered on eBay, developing the business and selling it for $5 million dollars. All this happened before they even got to college, marking their impressive start.
In the years that followed John and Patrick started developing their startup, Stripe, trying to make the whole payment system more efficient and easier to use. So, at the start of 2010, the two co-founders started putting all their focus on the online payment solution and discovering why online payments were so hard to trust. The next few months being used for testing the Stripe payment method and getting their friends and families' opinions on the prototype.
And, it seems that all was a success as, only a few weeks later their digital platform was used for the first transaction. Their first transaction was made with a Y Combinator company named 280 North. This led to the employment of Ross Boucher, joining the startup and helping the two co-founders improve the online payment industry.
At first, Stripe payment was only a dream that came true. They didn’t know the market potential they were facing and didn’t know whether or not fraud and any legal problems would appear. Even more so, they needed to solve all the problems regarding non-US payments, facing similar problems and situations as PayPal had. However, it only took 6 months for them to discover whether or not the startup could be transformed into a great experience for their potential users.
Further on, finding the right solutions that can lead them to have a more credible platform was institutional credibility, which usually, an investor can sustain. Stating that Stripe “didn’t look great on paper.”. So, the next step was to market the startup and make the online payment method be seen by as many people as possible. And, an affordable way to obtain that is through word of mouth.
One of the co-founders stated in an interview that “Initially it very much spread through a word-of-mouth process. That was surprising to us because it’s a payment system, not a social network so it’s not something you’d think would have any virality whatsoever. But it became clear that everything else was so bad and so painful to work with that people actually were selling this to their friends,”. The power of social networking, won again as they later on accomplished to secure their first funding, which came from Y Combinator.
The interesting part is that in the founding process, Stripe didn’t go through the usual boot camp process as Patrick, one of the co-founders, already has been through the process with Auctomatic. Succeeding to win their trust with their great idea. But this is not all – in the process of growing the unicorn startup, the two co-founders, Patrick and John, had the opportunity to meet with the founder of PayPal and get his opinion and insights on the payment market.
They offer a safety net. With their 7-day waiting period, Stripe created a safe and secure environment where each transaction can be obtained after the waiting period. Stripe states “Because it’s seven days that gives us time to really get an accurate picture as to the profile of the business. And because Stripe provides the easiest setup process of any payment system on the internet, that creates an attractive fraud target. We feel confident in our system and ability to detect that, but we can’t do it overnight."
And, let’s not forget that the online payment method is the cheapest one available, offering an efficient way for transactions to take place. Stripe fees add up to monthly fees, setup gateway, international Credit Card fees, and so on. Regarding Stripe fees, the founders stated “We wanted to make sure that we only make money if you make money. It’s a messaging challenge for us to explain to people that they’re paying more for their credit card processing than they think,”.
Helping them get to where they are today, building a multi-billion dollar company that is still delivering good solutions for their customers.
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