Where he and his brother got the chutzpah to take on the worldwide payments industry, why there isn't more entrepreneurship these days, what Bitcoin and the Blockchain teach us, what it means for a business to "take the squishy stuff seriously," and much more.

United States


00:00:08I will I'm Andrew McAfee and this is the minds and machines podcast if you plotted everybody on a graph where one axis is words per minute while speaking on the other axis is quality and clarity of ideas stripe cofounder Patrick call soon would be in a space all
00:00:39his own I wanted to talk to him about the origin of the company how much trouble the incumbent economy is in why entrepreneurship in America is on the decline and what if anything can be done about it and what he means when he says that they take the
00:00:57squishy things seriously we spoke in spring of twenty eighteen I was in Cambridge mass and he was in San Francisco the machine you're the only profound for them allafrica Ellery start by understanding what gave you the confidence when you were twenty one years old and your brother John
00:01:31was nineteen that you could start a company that would take on the World Wide payments industry well we didn't set out to take on the world the worldwide payments industry in the beginning I think is important stripe was kind of an experiment as a side project %HESITATION it
00:01:46was something that we thought might be can applicable to useful to some of our friends some some people kind of like us who themselves had side projects are sort of small little niece and businesses and so on but we initially built it for developers who are kind of
00:02:01just starting out with an idea and want something really straight forward think it's sort of readily that's our west are on and it was kind of over times we realize it again I had this broader applicability and and and sort of relevance by you know I I think
00:02:15for a lot of these things that end up having some kind of a larger significance that they they start out much more experimentally %HESITATION and that's certainly the case with fright and what was the pain point that you identified in those developers who just want to start something
00:02:30up so that the proximate aimpoint that we observed is what was said to fault first that you simply could not get started instantly arm you could set up a website of instantly and to wait for anyone else to approve you you could buy a domain name immediately again
00:02:48you didn't have to kind of %HESITATION into submit a bunch of paperwork or or wait in two weeks or whatever on you could you could really do everything else involved in establishing an internet business like as fast as you could tie bond but when it came to getting
00:03:04paid involved bank approvals and faxes and e-mail paperwork and all this stuff until it does it's kind of frustrating and in Congress it seems sort of have just bizarrely anachronistic and the second thing was when you did get set up by you you weren't really getting at I
00:03:27mean what you want to just like a straight forward API for charging credit cards %HESITATION you know you you sort of inherently wanted this sort of found this straight forward software product because the companies providing us were not software companies or banks they were financial sector entities of
00:03:45some sort or another because they weren't technology firms you're kind of getting this very second rate software that ended up in hitting that convincing product in a whole bunch of ways and so is this kind of %HESITATION it hosting software was being provided by the companies that build
00:04:04datacenters and they were sort of in that they could kind of do it in to be some you know semblance of a software package there really would not be very good and so that was the second thing is even once you've got set up at your your product
00:04:18ended up being can materially worse because of the limitations of the kind of underlying tools and you guys started in what year are we start working on this %HESITATION initially serve as a side project in in late two thousand nine and it was in October two thousand nine
00:04:33instructed not launch publicly until September of two thousand eleven as I can give you a sales for is it was almost two years of working on a kind of a big behind the %HESITATION it does the public failed %HESITATION and there's a lot of iteration development before was
00:04:49something that we thought you know really to be sort of sound substantial or more broadly useful crazy though that in two thousand and nine fifteen years after you know the birth of the web and this idea of he commerce but there was still nothing close enough to an
00:05:04API that an online merchant could use I mean with that with a big financial companies just that asleep at the switch it's totally crazy the and one time we did not believe that it we assume that something like striped must exist somewhere and we haven't found the chips
00:05:22%HESITATION got and and then we kind of came to some conviction that it in fact did not exist we then can assume that there must be some sort of dark matter must be some reason as to why it could not exist because it seems like such a a
00:05:34sort of an implausible inefficiency in the world for it to not on I think what we can nap now in hindsight I think for the structural reasons though right well I think there are several reasons it's kind of why didn't exist but I think among them %HESITATION our
00:05:52first the fact that it was sentenced cross sectoral like you have to really good technology but you also have to be surprised if it's gated in navigating the financial industry and the legal industry and global expansions of all these other considerations and so it's actually not like hosting
00:06:06where you know you can be sort of more narrowly goods just the technology as if they think of this problem space you have actually had to sort of combine capabilities in in in several to comfort it just pertain says come one reason and secondly %HESITATION I think in
00:06:22general the world's tense under value infrastructure and tools I think the world tends to undervalue %HESITATION trigger phrase this %HESITATION we we kind of tend to under value %HESITATION counter factual better worlds %HESITATION in that it was spent on that a little bit yeah so some number of
00:06:44companies get started every year and they're tangible we can look at them we can talk to them we can poke at them we can better serve them whatever interesting important question why that number of companies %HESITATION and why cosmetically isn't that number not to act or five X.
00:07:01or ten X. but when you talk about that when we use going to reason about it and it still feels so mushy and it's it's it's necessarily cut definition the speculative and so I think you know it just as a practical matter if you're inside some you know
00:07:15big institution or organization or something and you're talking about well I think if we sort of you know really shifted the way we work we built this new product suite and do all the stuff that they're always kind of hypothetical companies that don't exist today that we could
00:07:28be serving it just seems question it seems impossible if not rigorous and you you can't build a good model around this and so I think it's a consequently gets substantially under rated %HESITATION I think of it I I'm good students %HESITATION it is generally as %HESITATION thought process
00:07:45is what our %HESITATION what are better counterfactual world we could be living and and what is inhibiting us from from being there and I think this applies in lots of different bands the story you're telling me does not make me long on let's call it the incumbent economy
00:08:04my being too pessimistic but Nixon question %HESITATION that because on the one hand of course if you look at it purely economically incumbents seem to be in great shape like the rate of new from creation is that finding %HESITATION the %HESITATION the the the sort of it sectoral
00:08:22concentration of most sectors appears to be increasing our profits are pretty good eighty eight exactly sort of it when you look into those lands that actually seems like it's a pretty good time to be an incumbent are and yet on the other hand %HESITATION so this structural damage
00:08:42to shifting her by the back barriers to entry in many ways are getting lower %HESITATION in some ways big yeah I think globalization is sort of interesting whereby it creates new pockets where things can spring up and a huge our fees but then eventually for a kind of
00:09:00once you gain some initial attraction competence in capital and so on you can then spread laterally and so I just noticed yesterday all the express %HESITATION Ali Baba as one of their %HESITATION shopping products is now the second highest rated app in the U. S. outside this is
00:09:14the second most popular back in the US app store %HESITATION idea that's interesting to actually think about birth of on the one hand you know course Amazon is doing fabulously well and you know there are generally speaking at or lots of US retailers that are supposed to be
00:09:28a very big very powerful and so on and yet said of the the sort of it was of course possible for Ali Baba to build a very powerful engine organization as it is set of competences in in one geography and now evidently there is it having some success
00:09:44and sort of translating that elsewhere and so it you know did to teach your question I I think one of the biggest questions answered as we think about the world in the next ten years the next fifty years is where will the balance be tilted between the incumbents
00:09:58and the upstarts %HESITATION and I don't know yes I think that's contingent %HESITATION at all I don't think it's going to is going to be intrinsically determined by the technology I think will be determined by sort of that the structures we built around us uncertainty but strive we
00:10:13wanted to be an anti incumbency force and we think of ourselves very differently as being anti incumbency force but the point if I'm hearing you right is that this combination of globalization and huge growth in economies around the world combined with a borderless world facilitated by by technology
00:10:32that can be a profoundly disruptive and a profoundly difficult Forster predicted do I have that right absolutely absolutely when a percent %HESITATION %HESITATION and then you know the the kind of flip side of that is firms are getting somewhat better at managing themselves to me to see to
00:10:48see in the technology industry that you know of course this is the famous set of companies you know be at lotus or %HESITATION I or many of the early semiconductor companies or %HESITATION to to some degree IBM %HESITATION and %HESITATION and check out in Boston and so on
00:11:07this kind of a set of companies that really have a lot of early success in traction there were then can over taken by that I was on Facebook's Google's %HESITATION %HESITATION and and and so forth and so you know I I think that the question is how those
00:11:22companies learn something from kind of those prior generations that making them less likely to kind of get overtaken or gets a prize and so on by the the sort of pop started today %HESITATION and again I I think that's an open question but it's not clear to me
00:11:36that things will to remain a cyclical as they have %HESITATION and so I really think you forces on both sides you've pro incumbency forces %HESITATION and again persons within the if I did it I think your point you have some anti incumbency forces and again I really think
00:11:50it's better for society the mortgage took things an anti incumbency direction but but I think that the sort of the balance of that level is %HESITATION is the product of contingent forces spend a little bit more time on what you just said we have a us a set
00:12:06of giant technology companies mostly in the U. S. a couple in China that like you say appear to be really well managed and one thing that that my community and I spent some time thinking about is whether history can repeat itself and like you say the pattern in
00:12:22high tech has been dominance and then disruption and I personally walk around kind of confident that we don't have a new permanent class of tech monopolist just because of that historical pattern do you see something different is your intuition to tell you something different I think that %HESITATION
00:12:40I suspect and this is back those %HESITATION but I suspect that we will see greater endurance in the tech giant's arms today and say the top four in the US than we did for some of those predecessors I don't think it's going to be sort of perpetual I
00:12:56don't think that it's %HESITATION it's inevitable by %HESITATION but but I I do think that's are just kind of anger come out or going to observe him at the same time I think some of the concerns about to you use of monopoly or set its massive concentration and
00:13:15dominance and so on are somewhat overstated in the sense that %HESITATION I mean just look as a practical matter to look at it is tech sector concentration the rest of the last forty years we are not at a high point of tech sector concentration as assessed by market
00:13:29cap it has been substantially more concentrated in the past and so I don't think there is kind of obvious cause for for enormous concern on this was more broadly at and it's gonna bring it back for our prior point I think we really should be asking sort of
00:13:44fun that they kind of had a deeper rooted questions behind this around %HESITATION what determines how many new technology firms are started haven't watched him in so many new into the firms are started what determines their survival rates what tends to influence it one way or the other
00:14:02%HESITATION and and how can we help have the reason that you know healthy kind of turn here as it happens last night you know as I was reading and I think all those names are fostering grin but and basically using firm entry measures as kind of %HESITATION at
00:14:20twenty two D. and inventiveness sort of indicators in that of course you know when they're breakthroughs happen when innovation occurs and so on one tends to see spike infirm entry rates I knew this kind of questions behind that it's a kind of you know it does the firm
00:14:36into does that spike because the innovation or does the %HESITATION as does the innovation because spike and so on and and you know maybe it's bi directional whatever %HESITATION but I think there are you know I think we sort of tones investigate this tough enough and I think
00:14:51we don't work in an office I think we don't recognize enough as a come a parcel force I don't think we are talking about the fact that again firm creation rates in the US are infected planning despite are gonna prevailing narrative around on a sort of you know
00:15:04ever faster destruction and so right it again and Silicon Valley is kind of the big shiny distraction from that central point right that's right that's right and again I really don't think it's inevitable and so it would but stripe with atlas I mean our explicit goal is to
00:15:17kind of have to read more into the new technology companies started we sort of people you know thinking in the shower every day about well what is it that's kind of holding back this rate of creation what can we do to help more than get started and then
00:15:29one star started what we do to Canada to help them be more successful in the country increase that that that survival rate because men may become one of the central beliefs of Streit um at an interest several motivating forces is that it's very easy to fall into a
00:15:42mindset of again a kind of determinism here that says we are writers on these broader set of historical cycles trajectories you know what what have you I just don't think that's true I think it's much more kind of mutable much more subject to kind of a human agency
00:15:58influenced and then we have the one tends to think probably especially during times of really profound technological change right for sure absolutely so type dive in on that a little bit tell us what atlases and what you're hoping to achieve with that yet so %HESITATION they're kind of
00:16:16a well the overarching goal with this is to increase the number of enemy into just technology companies star in the world %HESITATION so not dry cleaners not not mom and pop businesses it were or were not at first because businesses they play an important role in society but
00:16:35no that is not the central focus atlas atlas is goal okay and stretch goal is to have to be more innovative technology companies a star in the world and so for example when the survey strike users about half of them tell us that they are building something they're
00:16:49selling something that could not have existed to twenty years ago I think that's important these are companies that are sort of operating at the frontier they're doing things that give us a for instance I'm even though %HESITATION people building it you know new medical service diagnosis and community
00:17:08tools if you have you know some sort of obscure condition or something like that %HESITATION it can be extremely valuable if you to sort of connect with people who sort of similar experience that %HESITATION and it's just a kind of coordination that was not possible in the world
00:17:23twenty years ago and other examples of along similar lines is this is the proliferation of on demand services that are sort of helping make physical capital in the world more sufficiently accessible and you know they're gonna prominent examples there in terms of you know things like ride sharing
00:17:38and %HESITATION home sharing and so on but here we see on demand services and kind of %HESITATION in a marketplace economies friend farmer right news stuff that has kind of you know quite significant capital expenditures entailed the fact that so many businesses so many farmers in the farm
00:17:53owners had taken expend that capital is not kind of cosmic he required together to spend it because well they weren't sure where in a fifty mile radius this might already exists and so in a weird ways of solving that coordination as a problem actually has kind of you
00:18:07know major affects the tensions of the capital intensity of their farming operation and then you know to give another example on you know just take chem new kinds of entertainment %HESITATION %HESITATION indicts the way people want to spend their time is itself of all thing and you know
00:18:22we're we sort of all necessarily consumed %HESITATION you know mass market TV and radio and print media and so on it's fifty years ago was now with things that you think there might be new models emerging for how creative people can can earn a living and and reach
00:18:38out find a community get paid by that community using services like yours take patriotic for example %HESITATION Kickstarter which I think are sort of creating an economy in which it's much more viable to being each creator than it's ever been before and so you know if you're creating
00:18:54a certain kind of comic if you're creating a certain kind of podcast you're pretty certain series of YouTube videos and so on seventh in the absence of something like tea tree on that enables sort of you know and you to find the point one percent of the point
00:19:06zero percent twenty zero zero one percent of people are going to feel some affinity to fast if you don't have a platform that facilitates that then I mean you're not going to go to create us and so again I I see these services is actually is a very
00:19:18%HESITATION %HESITATION isn't very powerfully creativity enhancing force is the kind of increases the resolution of that which is created by enabling each taste to be served rather than just as I am you know the the individual at the media but I'm also hearing you read that you don't
00:19:36think that that were plaque tolling with these kinds of services that were that were not like you say kind of you know at saturation rate with these you think it's there's an unknown amount of territory available to be explored well I think that kind of two questions there
00:19:49is as a descriptive matter sort of are we at a plateau today and then there's going to second question of well even if we are or two since we are is that necessary could it be otherwise %HESITATION out and so the first question is whether we are today
00:20:02I think it's mixed I think it's kind of it's the data sort of difficult to analyze and because just as it's it's it's a it's so complicated and can isn't really difficult to analyze you know what's happening at the frontier because we we don't even have the right
00:20:15measures anymore maybe but you know as the world shifts towards a tangible capital maybe GP's increasingly poor measure and so GDP based approach to be measures are intrinsically less valuable who knows right out so I would say the data underwent a reply trying I was is it it's
00:20:28mixed and there there's some you know a kind of cause for optimism and and sometimes a pessimism on but you know I think the more important one into in terms of set aside deciding but structured work on and we can have impact and %HESITATION %HESITATION what products we
00:20:42should build is how could be right and so for example if that lets me again survey companies started with that %HESITATION you know a majority of them tell us that they would not have gotten started if Alice did not exist and invites me serving the broader stride customer
00:20:58base a very significant number of them tell us even those that are quite large today that they would not exist extract itself did not and so in that sense I think I've descriptive measures up of you know what's happening in the world are somewhat more limited relevance because
00:21:13well it could be otherwise so I took off track a little bit give us a quick synopsis of what atlas dies in what problem it solves for the the innovators in the entrepreneurs that you have in mind sure sure role maybe all the other than go to house
00:21:25for some service right doesn't have access to tend to that and to strike bills %HESITATION economic infrastructure for the internet we start out of as we discussed building these payments API's that made it really easy for developers to get started just selling stuff online having comprehending the world
00:21:40anywhere in the world buy from them stride is expanded says but now service businesses of every size and we've sort of you know they are kind of original near two person their developer start ups and at building things in stride with public companies building constructed with Facebook and
00:21:54sales force and as a P. and DocuSign and you're quite significant business %HESITATION and so strands of expanded to Friday's economic and payment of a charge to businesses of every size you know across more than a hundred countries at this point and he strides goal is to increase
00:22:09the GDP of the entrance to enable more technological progress to enable these businesses to kind of operate more successfully and to extract more markets and member business models and everything else entailed and then we can and took stock of strip as a whole and we can ask these
00:22:23kinds of questions that kind of what's holding it back how could be release of change the exponent pop what what what could sort of really means we knew the trajectory we're we're brought to this question of well you know we strive helps accelerate companies and helps you generate
00:22:37more revenue and do more things what determines how many companies exist in the first place what determines the kind of top of the final on and you know this is going to hold your questions there and well you know who decides to become an entrepreneur and how did
00:22:48they get an idea and so on but it's very important to the construction point in that final as well just how much hassle as it started company %HESITATION at and just kind of and were you and John surprised by how much hassle it was to start up straight
00:23:00just the you know the volume of paper work in compliance and whatever absolutely and I you know we have course were very fortunate where we are in the west kind of one of the easiest place to do this in the world and if you imagine yourself in the
00:23:12shoes of the of the developer in in most other to the world at into beating Chile or into the show or in Poland or or what have you if it's it's very difficult for you to get yourself on kind of a just a level footing %HESITATION and access
00:23:27infrastructure with developers who can have the good fortune to be in the rest of the UK or sort of did that the more sort of sound at least in this regard developed markets %HESITATION and so what atlas does is it provides a U. S. bank account U. S.
00:23:39tribe account and the U. S. corporate entity %HESITATION to developers our entrepreneurs anywhere in the world and so happens now serves on printers from from more than a hundred thirty countries and and you know it's now an operational for about two years and you know we see these
00:23:54entrepreneurs are basically performing just as well as can be on Berners truck was servings of before I class and so in some way reading atlases just increase the total number of companies and that there was this at a time get off the launch pad on a global basis
00:24:08and and and roads for very quickly and that you know I I was I was reading this in to this app podcast I'm with the the the gentleman behind the %HESITATION the World Bank in the famous ease of doing business and acts as he also served as the
00:24:22%HESITATION because the minister for finance in Bulgaria %HESITATION and he was asked %HESITATION it what was it the most significant thing that he did promise for friends in Bulgaria %HESITATION and he said he was making it easier to start a business in the country and they did a
00:24:39whole bunch of stuff you know and and forces a great deal of expertise from from creating an admin administering extensively this at this survey %HESITATION but I think the ease of getting started is one of the highest leverage as appoints influence and that was another case of this
00:24:55dark matter that you talked about where it turns out there actually aren't legal barriers to leading a Polish entrepreneur set up you S. corporation in the U. S. bank account what not it just hadn't been done yet that's right %HESITATION and again I think this this this kind
00:25:10of sociological factors at play here for if you're inside a big organization at you know if he if there's like a legal restriction or it's like wow you know entrepreneurs in Poland can start a business but I had a mandatory waiting period of one month or something that's
00:25:23the thing that's just kind of walk around assumptions like that yeah exactly the something Fuhrman here about sort of maybe a restriction like fast as a practical matter in the world you know most the stuff tends to be just amorphous and it tends to be soft and it's
00:25:36been hard to pin down in speaking of it you have to get a measure to be and so on and so if you're the guy inside %HESITATION you some organization saying well I think it's probably just a huge hassle frontrunner when to get technology can be started here
00:25:50that is against you on rigorous and so we heard very powerfully front from the auditors to be stars %HESITATION because you know strike as a structural advantage for a week work with more of these and ended up on printers almost any other organization in the world as we
00:26:05can and we we we really hear what's holding innovation back on that but but but I I think this kind of one time under addressed because it wasn't the but because because it's just a hassle it wasn't a firm restriction was just fiction and as part of your
00:26:21comparative advantage that that you and your colleagues are willing to get rigorous about these squishy barriers to getting more stuff done and dive in and say okay what actually is getting in the way and if it turns out to be in it to be things that we can
00:26:35fix of technology we'll go do that and that pricing yes I I would say it's two things %HESITATION one it's in one about the talks back to the important thing the right shareholders I think were incredibly fortunate in having the right customers our customers are the most innovative
00:26:53developers entrepreneurs people technology firms in the world and so you know as we think about well how to reserve enable more innovation hurry up and able more these things get started and so on conducting just interviews hearing first hand from these people what is holding the back of
00:27:09what they wish existed is an incredibly valuable sort of set of learnings and can't decide first of all the top and so I think we're incredibly fortunate in the customer base we have and then I did the second one is gonna get would you say were you know
00:27:21we we %HESITATION we're willing to take these squishy things seriously %HESITATION and I think that's %HESITATION it ends in some way we we may even have to lean into them are because I think that's where the sort of the greatest martial returns like if you're hearing so many
00:27:39great ideas and come across so many serious innovators and entrepreneurs all over the world why is there still only one Silicon Valley %HESITATION that is the question and first saw what what's your answer to it books first off I'm not sure there is only one so much about
00:27:55it and if you take the single most valuable private technology companies in the world today on four of them are Chinese %HESITATION and so you know arguably the second one measure and hat Silicon Valley is is is already no longer so that the preeminence of looking back on
00:28:11that and in fact I believe that all four of those companies are based in Beijing I could mistaken but that's certainly most of our %HESITATION more broadly the resurfacing question around us is as the world globalization of barriers to mobility fall to the world get more or less
00:28:30of a genius because I mean there's an obvious argument for more and and in some ways we always see that for you know you can %HESITATION airports the world around you you see the same stores I think is alternating argument for %HESITATION for becoming less homogeneous because more
00:28:46self selection will be enabled are on the right kind of personality that'll feel this great affinity for Silicon Valley and San Francisco and more that people can come here %HESITATION and we some people who feel a greater affinity for Paris and and they'll end up there and so
00:28:59on right now and so it's not clear to me to know which way that goes on but but but it's a broadly speaking I would say geographic network effects are still really powerful D. internationally booth certain you kinda do you need to develop in a way that's you
00:29:13know very additive but it is not yet supplying to geographic never facts %HESITATION and I think it in sync Washington next twenty years is how that unfolds and do internet communities get to the point where they can really replace us they they made progress but they're not there
00:29:27yet all right so I'm gonna force you to take a position on that twenty years from now will the geography of deep technological innovation be more concentrated or less concentrated than it is today trying to be less concentrated in Silicon Valley %HESITATION now I I'm I'm OK with
00:29:45cheating a little bit in that answer for for for the following reason averages I think I think it might be less concentrated in Silicon Valley if we did not deliberately do our best to asphyxiate us %HESITATION bought as it happens we are and as Silicon Valley incidents at
00:30:02bay area California housing policy it is kind of for a whole bunch of historical answer structural reasons %HESITATION it's it's because it is becoming it has become vastly more difficult to to to move here to shift human capital here that was ten twenty thirty forty years ago %HESITATION
00:30:20and so I think you read it every in the region needs to make it easy for those who have not yet made us to come into play their trade and to pursue their idea and to kind of higher similarly weirdly oriented people in the early days and so
00:30:33on %HESITATION and now with a median house prices in Silicon Valley ring into the millions of dollars and and rents even for one bedroom places you know three four thousand dollars a month odd that they have it's it's kinda Norma structural headwind and we see it very directly
00:30:48just now on the ground with entrepreneur is that there's a much stronger disinclination because these kind of economic forces to be in Silicon Valley and so unless that trend reverses course I think it's almost one thousand at the talking valley will be less of a center for this
00:31:04innovation in three years time and you see any hopeful signs in that direction they were not nine and and bill was passed the bill was passed I think we just heard an example of damning with faint praise %HESITATION SP one sixty seven was passed last year it's a
00:31:22bill that today is makes it marginally easier to build that to build housing and in some cities across California not not a feelings matter no I I and I've I've heard you talk about this and see right about this before you're not the only entrepreneur that I've heard
00:31:40a voice these concerns I just wish I saw more signs that things are getting better out there like you say there is it's kind of self strangulation do you also see that in this country in America were strangling ourselves at the federal level I am I ask the
00:31:58immigrant entrepreneur yeah I think there were I think there are probably for major sort of self inflicted %HESITATION kind of happens here %HESITATION and as our kind of customer base grows time I have and the more the kind of plan to do in terms of helping to work
00:32:21systematically assess these and hopefully %HESITATION help facilitate %HESITATION in some some kind of broad discussion around them but broadly speaking I think the things we see our first as you say immigration policy where the US has this much been said and written and I agree with most of
00:32:36that that the US is the sort of astonishing good fortune to be the sort of primary place and in the world that have potential ambitious motivated people want to come to that and be present as it is quite substantial roadblocks and that sort of stuff I need to
00:32:52ask and I think it's gonna this enormous size of negative some operation where it's worse for the rest of the people that he works for the rest of society because they don't benefit from the great work great science to great technology whatever they might pursue and so everyone's
00:33:04worse off secondly I think I'm and this if you would like to approach walk around thinking that somebody with somebody loses somebody else must win but your point is that there's just a lose lose lose situation absolutely I think kind of %HESITATION purpose to make sure the world
00:33:19is that you know that there exists it both highly negative sum and and highly positive some situations that we kind of often think of these things and more human dynamics for it's gonna zero some you know well at least if this entity or person or conditions is losing
00:33:34some of his winnings actually think the more common pattern is going to everyone loses or everyone wins %HESITATION and and and and that makes you know that the the which is deeply non intuitive but but might be the right way to think about yeah right right and make
00:33:47the native someone's so much more depressing right because I mean he's a someone was better off like to do is make you know total justice or something five times but but but now I mean did did did did the data shows you know quite quite convinced me in
00:34:04my opinion that %HESITATION that's that immigrants basically help everyone they help the that their country of origin they help the the country that that is the destination they they helped themselves to help those around them just gonna everything is is better off trying to immigration for one second
00:34:19one is is kind of more broadly sort of %HESITATION in occupational licensing I just kind of restrictions on people to climbing ladder is taking advantage of opportunities are getting to the sort of %HESITATION to do whatever that they they consider themselves and most productive in in doing the
00:34:37third one is that I would be in because we discussed this I just gonna buyers mobility internally domestically %HESITATION into housing prices being beat the kind of this one and then lastly on NBC this quite a bit %HESITATION %HESITATION a a lot of firms we work with %HESITATION
00:34:55at a regular three hours and you can more broadly and and and that obviously the amount of regulation the US has increased faster the course of the twentieth century I always want to copy it here where I'm not anti regulation %HESITATION I I think much of it is
00:35:10is good as necessary as valuable as if you know considerable positive some social utility I I believe all those things thing to give me you know quite significant concern is the just the unintended consequences kind of coming back to our you know I had a cold better counter
00:35:26factual and the unintended consequences of much of that this regulation I think it's kind of greater than we realize %HESITATION and and is a way to much benefit to incumbent firms and they're just gonna speaking part directly for stripe like we don't have any particular objections the regulations
00:35:43that we are subject to and never subject to a lot of them were license in a lot of states and so on those regulations are fine so you mean things like things like you know your customer anti money laundering stuff like that that that's not ludicrous if not
00:35:54ludicrous you know we we we we follow all of it we take it very seriously we invest a lot and as we spend a lot time with regulators you know we're not complaining however I do observe that it certainly makes it much more difficult for new firms to
00:36:07enter the sector and to compete with us %HESITATION it actually functions that evening and motive for our business %HESITATION Diana and of course when sees this house where residents you know this can regulate remotes for the taxi industry against that the right term companies hotels vis a vis
00:36:21Airbnb and so on and so I feel like I'm speaking this I can actually from the side of the beneficiary for I think you become big enough that that that this is actually working to your favor in a lot of cases that's right that's right but but but
00:36:36given the customer base the research on again so our goal to be an anti incumbency force for the start ups and the innovation the entrepreneurs that strike and he pulls it gives me sort of fact quite significant concern their rights in time and time again be stymied by
00:36:49regulations that had very valid student motivations behind them that maybe made a great deal of sense at the time when they were created but the technological possibility space has evolved and now though sort of DD's these ambitious the upstarts find themselves %HESITATION you know considerably stymied in the
00:37:07sense that if for example that we might not need a government issued licenses to make sure that you and I can get a safe ride across town that's the way that technology might have advanced enough to make some of those regulations Abed obsolete or or the into the
00:37:21company that %HESITATION %HESITATION I spend some time with back a you know a a year or so ago which at the third looking basically to %HESITATION to provide cash flow incomes moving to low income people and so you know people have shown and inserting and no colleagues of
00:37:39yours at at MIT that part of what makes it really challenging to read we think it's sort of low income individuals I eyes be a matter of level but part of actually really because of problems and it isn't just the variability and and this kind of you know
00:37:53it's a big deal if you ever hit zero and for obvious reasons and Europe all conditional use various fees everything else and so anyway what the service they're looking to build is just since moving for the S. and so that they they can they can sort of time
00:38:08there while holding the average level of text provide guarantees people that enable them to to rent something or to so to take out a loan or or whatever the case might be on and the biggest barrier to their doing so I think this is something of dubious that
00:38:23very considerable societal utility to expire to start doing so is %HESITATION is busy existing regulations around payroll and the mechanics of it you know how it is that people say even get paid all the stuff and you know all all those I think are are well intended rules
00:38:39which is the kind of practical the fact is that it's extremely difficult and and in many cases impossible to dissidents %HESITATION to take a step forward with something that I think could be extremely beneficial and out of a like this and you know it's tempting to say well
00:38:53you know they should just make sure they do it while satisfying all the existing rules and laws and so on and I I think the practical matter is for a set of five person company looking to get off the ground and they cannot go and hire licensing experts
00:39:05in fifty different states %HESITATION and %HESITATION and you know that this is a twenty person the operation of Intel's so finding a way to kind of chop away at this regulatory thicket might be beneficial for entrepreneurship that war and %HESITATION you know ways to enable smaller younger companies
00:39:25had to to experiment in that you know that this is one another example and this kind of time hopping back to our industry and basing known you guys have got to start in the US %HESITATION since the dot Frank act in two thousand nine on I haven't met
00:39:42anyone who believes it is there could not be any kind of consumer banking innovation factory seeing sort of this massive proliferation of new banking apps like Manzo and revolute tends so on end and never geographies around the world %HESITATION ands answers have a question of why is this
00:39:59happening a lot of other countries but not in the US I think they see what the Kurds we've inadvertently bands are sort of banking innovation the rest arm and and and that was not the intent in fact you know it's quite possible I think the Dodd Frank act
00:40:12was national good because you know we also have not had another financial crisis but I do think it's an important question of well how do we both to prevent financial crisis but also make it possible for ten people innovation that sort of in the provision of consumer banking
00:40:26services the single biggest area of hype and froth that I've seen since the first wave of the internet which I think you were too young to be around for mid nineties is what's going on around on the blockchain broadly speaking and initial coin offerings and stuff like that
00:40:44these days this is kind of in your space because it has to do with payments and record keeping what's your take on this whole phenomenon so that there's a broad question for you I think this is you know I'm is it any intention to kind of look at
00:41:03it from a societal standpoint in some sense I'm kind of what it says per in John has this lines of my co founder John at that time is the new board room and he always has a kind of tongue in cheek but the really is kind of I
00:41:17think it's very important shifts occurring or even compared to say five years ago like butter at the last the last Bible but five years ago when there is a strike was it was much earlier and companies in every sector are paying way more attention to their developers %HESITATION
00:41:34than they were and they they recognize too much work and it just really extend the central importance of the international the technology industry up those of globalization is entailed and the importance of of you know they are coming to understand this and so we've seen an enormous uptake
00:41:52in you know mature companies public companies companies have been around for decades coming to us and and sort of looking to interface with us as they figure out well how to make sure that we're not supplant and %HESITATION or or so upstaged by it by you know some
00:42:08their three year old firm as I think is the broader shift that this kind of occurring in the context odds and you intention we run a survey back I'm back a month ago or so and we ran very comprehensively assembled representative panels and and really try to kind
00:42:26of pursue a very robust methodology and one of the questions we asked firms across every sector not just in the technology industry when the questions we asked is kind of what the primary constraint on your ability to grow is and fifty nine percent so almost two thirds of
00:42:43the respondents said that engineering resources soft ranger and we are the limiting constraint on their ability to grow and I think this is an extraordinary fact and I'm kind of underscores again this kind of this broader social context and so I read the blockchain stuff as in some
00:43:01ways kind most visible manifestation of this much broader underlying shift word engineering talent for the necessity of technological infrastructure as as as an engine for getting fundamental things done yeah I was kind of the fulcrum around twitch %HESITATION the future of %HESITATION %HESITATION in most sectors for the
00:43:27coming two decades will be determined okay but do you think it means the end of things like fiat currencies and corporations on bush to detect our finances of them in my powerpoint transit is the fulcrum in many industries acts twenty years I mean that's I mean that read
00:43:44software not to block change and question do you know whether the budget means that if your currencies on it's possible but it's highly unlikely %HESITATION in that you know that the kind of %HESITATION the currency has a pretty good motive everything out moats and and sort of vampires
00:44:04to entry %HESITATION it at you know in in in software companies and %HESITATION %HESITATION that I think if you had currency really has a strong hands where if you do not remain a significant fraction of your earnings %HESITATION add to the government on an annual basis you know
00:44:20I your your quality of life is going to suffer a great deal %HESITATION and as far as I know I can't pay my taxes in that coin yet right right right he's in the car actually I think that that the core an important matter is in what currency
00:44:36are they denominated in because they're not in years not gonna want to take some exchange rate risks that currency %HESITATION and if the price of big point just tracks or becomes a proxy for for you know the underlying idea currency well then maybe just is that your currency
00:44:53but it represented a different way and so on and so he's leaving for big part particular I think is on track to I've I've believed for a long time I think it's on track to become a form digital gold I think that represents a real success for anything
00:45:04that's pretty cool on so it's an asset class not not a currency those are two different things right that's right or okay arguably maybe being an acid is one of the functions of a currency but there's many others and I think as a means of exchange or whatever
00:45:16and I think it's %HESITATION it's it's it's not currently tracking to to be nearly as successful there and then most of the blockchain applications and broadly speaking I think the question is do you %HESITATION to well the two things first the question is do ninety five percent of
00:45:33them fail ninety nine percent fail or and then failed on odd because yeah almost certainly embracing this most of them well not at and so these were ever so you look your lower bond was not fifty percent region seventy five percent that's right that's right and of those
00:45:54to date I I I feel pretty confident putting the lower bound at about ninety five but in this the second point is on I think it's an important industry I I am supportive of it I'm delighted exists %HESITATION and I mean indeed strike has funded efforts here I
00:46:12we we ask funded stellar at three million dollars back couple of years ago and I'm proud to be did so I'm glad that we did so and I didn't I think it's important that it kind of one can believe these two things together that they can be sacked
00:46:25it sectors for ninety five percent plus efforts fail and it's a good thing and we support us and that's kind of how I feel about it where there's great experimentation there there's tons of stuff happening in the margins the fringes and it's possible some of the works and
00:46:38you know it's a debate that we really cool that's that reminds me of the great %HESITATION F. Scott fitzgerald quote about how the test of a first rate mind is the ability to hold two completely opposing views at the same time that's right and that in fact that
00:46:52is that that's as far as a nation in the sense that at Richard happening in the running of the characteristics of a great scientist made the made exactly the same point saying that he thinks that one of the you know cuts on almost universal characteristics is this ability
00:47:06to to hold these kind of %HESITATION somewhat dissonant believes in their heads %HESITATION Anticon is in some sense act on both I want to wind up asking you the questions that I ask all my podcasts guess a two part question number one is think not super long term
00:47:22but next three to five years and tell us what your most optimistic about and what your most pessimistic about and then second question to wind up give us a life that give us a productivity temper something that you do that that you that has benefited you a lot
00:47:35that you think more people should adopt so first of all optimism and pessimism right optimism the number of smartphone users internet users and and sort of general kind of internet participants %HESITATION that are coming on line in Latin America and Africa and Asia and sort of more broadly
00:47:58across the world no for for most of history to date the international see being a sort of a north American phenomenon in a western European phenomenon and so forth %HESITATION and I think it's just incredibly cool and exciting to to see that can cease to be the case
00:48:14I'm just try to predict the kind of damaging consequences of the action and you know we see ourselves for the sophistication of entrepreneurs and developers %HESITATION in sort of you know it is the kind of unexpected parts of the world %HESITATION is rapidly approaching par with that with
00:48:28those in the US and I think that's also and I sort of can't wait to work out do we dive in on that a little bit are these people getting trained via online courses are where their chops coming from that's a good question and I I think that
00:48:41it's actually mostly %HESITATION kind of %HESITATION %HESITATION were sort of informal human capital networks online communities and in some cases it is certainly online courses but I think it's as like you're more likely to be IRC communities subreddits while friends just obscuring mission trust websites get hot and
00:49:02collaborating on projects there and and and stuff like that and but but I think that that's really great %HESITATION the pessimism of the roads the sort of conventional but but you know I I think we so many tail winds as a behind us and and so many kind
00:49:17of structural forces that are propelling us towards better men tend at twenty eighteen has been and will likely continue to be the best year to be human human history twenty nineteen sends a very good chance of of of beating twenty eighteen in this regard and so I think
00:49:34kind of where we're being propelled by such powerful tail winds of what worries me is me intercourse changes that we might serve deliberately make and yeah that's got the obvious of right and you have concerns go global conflict and and and more being %HESITATION at probably foremost among
00:49:50them %HESITATION and there it's kind of it's hard to say but it seems like the probably has probably increased slightly in the past CO two years %HESITATION although I think it's still a relatively low %HESITATION endangers Weiss hacks %HESITATION you know I I think it's quite put a
00:50:06stop stop stop one second before you to that are you worried that we are that we have been recently elected leaders who don't believe what you just said who don't believe that things are getting better and better and better and kinda want to take us back to what
00:50:19they think of as the good old days I can't imagine what leaders are talking about %HESITATION but just just you know right right abstractly yeah sure look I I think that %HESITATION I think that is bad %HESITATION I think that this time most things in the world are
00:50:44%HESITATION are going in our collective favor %HESITATION bites that one is not %HESITATION that now the question for me I suppose is how much does it matter %HESITATION and yep policy that that one is is less clear to me and I don't assign can dismiss the verbalize I
00:51:06in that you know I I think a lot of the concerns rounds of democratic institutions and and just the example of the US sets and it always things are real but I think it's a I think it's an open question to to some degree as though you know
00:51:18player between their bad and terrible as lies %HESITATION and and and we know yet armed but your point which I think is really interesting is that the tail winds are actually quite strong and kind of large in number the tail winds propelling us to have twenty eighteen be
00:51:35the best in twenty nineteen be even better that's right that's right that's right and it's not clear to me that anyone human again without something really extreme like starting a major global war and that that any human is kind of powerful enough to to you know overcome them
00:51:52%HESITATION and and so yeah it in that sense it it's just I think we're gonna have to kind of wait and see to some extent you know I should be clear that you know file but I think it it's also easy to kind of get to serve boxed
00:52:05into a U. S. lands on this stuff %HESITATION in that if the US is relevance and central importance is also defining here and so in some sense sometimes I think we're also kind of becoming more hedged and I mean we've got a chart up in the office room
00:52:22kind of the relative share you know different countries GP's in twenty thirty arm and yanked the rest of the relatively small size and twenty thirty and so kind of you know whatever it is that happens the rest you know I live here I planner meeting here and so
00:52:36it's you know quite important to me and to the hundreds of millions of other people but the U. **** you know just at one small patch of sort of the increase in the developed world okay life hack Adam is probably familiar to you in a to a lot
00:52:49of your listeners I keep coming across people who don't use at which kind of surprises me and so maybe maybe I'll try to sort of some I correct this and the first is just using pocket for for storing things to read you should not just read that sort
00:53:04of the thing that you should not be the most interesting thing that you know about at this very moment them you should read the most damaging thing that you've come across in the past week for the past month and talk of how to do the actual significant increases
00:53:17quality the average probably the stuff that you consume throw you come across interesting some of the interesting throw in the pocket and then when you have time to read read that exactly it's like I got it it's it's a magazine curated by somebody with you know %HESITATION impossibly
00:53:31similar tastes yourself %HESITATION and %HESITATION and then secondly %HESITATION and a property I suppose %HESITATION cast a really valuable because they're basically concentrated versions of books %HESITATION what I mean by that is that like this kind of you know social convention on the link to the book it's
00:53:50supposed to be a particular length and you know in most cases I think the ideas are really dried out you know much access much more long winded lead then they need to and so I'll try not to take that personally these books as well I guess you got
00:54:05written books fine okay so %HESITATION that well you know I I I this is it is there's a lot of books and I I mean this is an average statement %HESITATION so %HESITATION as this is why I think is a problem and so I've always wished that said
00:54:18if you could figure out out you know who what does the author think the most important I'm kind of central ideas that to to do whatever the the work is him what to do I think they are ready for the authors think they are and we now live
00:54:33in a world in which authors do podcasts %HESITATION and that's basically it in most cases a one hour summary of some of the most important ideas and not only is it sort of your I. useful kind of synopsis but I often find it kind of in in more
00:54:46informal term discursive communication is actually often stuff that you get that might be missed by the more formal artifact of the book %HESITATION and so I think that that part cast as good as a as a it sounds a bit too grandiose say intellectual medium but but sort
00:55:00of as a %HESITATION %HESITATION as a year to the book and I think correctly pointed to read it right now let's be grandiose about this is this is intellectuals you know idea transmission like you say long form but of a different kind than we've had for a while
00:55:17the extender long form vessel has been the book and now here's this other interesting things so I think it's a great note to end on everyone pocket and podcasts yes gets smart that way but we're going to be clear there are that there are lots of books that
00:55:31are that are well worth their length and %HESITATION you know %HESITATION and many of them you know not not not only should be as long as they are but you know it would be great if they're twice as long the ticket after this been fantastic thank you for
00:55:45your time thanks so much

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