As the CFO and Chief Product Officer of a late-stage private company now valued at $22.5 billion, Will Gaybrick is no stranger to the challenges that all startups face when trying to scale their business. Gaybrick’s company Stripe, offers software that allows companies and individuals to quickly set up online billing and payment systems on their respective websites. In less than a decade, the company has managed to simplify and streamline payments for clients ranging from small startups to large corporate behemoths including Spotify, Lyft, Deliveroo, Kickstarter and Slack.
Founded in 2010 by brothers John and Patrick Collison, Stripe began as a startup catering to other startups. Startups, in general, represent a particularly challenging customer base for any type of service provider because while they are willing to experiment with new technologies, they also move extremely quickly, which can be very demanding. As time went on, many of the companies that Stripe first partnered with grew to become large public companies. It was then that Gaybrick realized the true mission of Stripe was not catering specifically to startups but to the single basic need of all companies regardless of size–growing revenue.
“So we started with these startups, and over time we found that we weren't actually catering to startups. We were catering to companies with ambition. So that framework of ?grow your revenue faster with less effort’ is sort of a guiding principle across our user base,” Gaybrick explains.
Startup struggles
Any entrepreneur will tell you that because of the internet and technology, it's easier now to build a business than it ever has been. From a purely financial perspective, the cost of starting a business has gone down by an order of magnitude over the last decade. At the same time, regulations have been tightening and it is actually harder now to deal with the regulators responsible for starting companies, especially in Hong Kong. One of the biggest pain points that many entrepreneurs have locally is opening a simple bank account. Other struggles include setting up a payment processor, finding a merchant bank and being able to collect payments on a global scale. These are precisely the kinds of problems that Stripe aims to solve for their users around the world.
“Over a third of companies here in Hong Kong have reported that it's getting harder rather than easier to internationalize their businesses and to be a cross-border business," says Gaybrick. "At the same time, nearly 90% of online businesses here in Hong Kong are cross-border businesses or operating in multiple geographies or geographies outside of Hong Kong. So investing in making that easier is obviously a highly leveraged and powerful investment.”
By forming deep partnerships and working directly with regulators, Stripe has found success in finding the right balance between protecting consumers and businesses while allowing companies to grow.
Asia’s global economy
Gaybrick says one of the most important themes for Stripe as a company is globalization. The company remains incredibly optimistic about Asia as a whole and launched a dedicated engineering hub in Singapore, which now staffs over 100 employees. Taking into account the strong population growth of the developing economies in Asia, Gaybrick describes a “perfect storm” of commerce that will soon hit the internet in the next several years and the subsequent challenges associated with tackling this next wave.
“Only about half the population of APAC is online today. And you have about half a billion people across India and Southeast Asia coming online over the next couple of years," says Gaybrick. "In order to serve users globally, we actually have to be hyper, hyper local. You have payment methods cropping up all over the region. You have Alipay, WeChat Pay dominant in China. You've got GO-PAY ubiquitous in Indonesia. You've got Grab doing amazing things with Grab Financial and GrabPay. You've got Paytm and Google Pay leading the way in India. And we have to work with all of these and take a lot of the complexity out of the equation for our users.”
The future of payments
Stripe was one of the first major payment players to allow bitcoin as a form of payment. However after taking the time to gather feedback from their users, the company quickly scaled back due the underlying volatility risk and costs associated with the cryptocurrency. While Gaybrick still sees a lot of promise in cryptocurrencies, bitcoin itself didn’t work well as a payment instrument. Whether cryptocurrencies will have a role in payments of the future remains uncertain, but Gaybrick admits the company is monitoring the space closely.
On a broader level, however, Gaybrick remains extremely optimistic about the future of payments. In the twenty five years since the internet went mainstream, “only about 8% of commerce has come online and we’ve barely scratched the surface,” explains Gaybrick.
“If you think about phases of the internet, you had the first phase that was really about organizing information," he says. "The second phase was about social connections—companies like Facebook, WhatsApp, Twitter and WeChat. I think we're now into the third phase, which is where you're going to really see the commercial internet come of age, and the convening and coordinating power of the internet drive new economic connections online. I also think we'll look back in five years and be almost embarrassed by some of the rails that the economy runs on today.”
In the meantime, Stripe will continue to do what they do best—leverage the coordinating power of the internet to let buyers and sellers, who wouldn't otherwise ever find each other, transact. With a fresh $100m investment from Tiger Global Management, Stripe’s future is bright as they rapidly scale their product line and services internationally.
