Wednesday, May 25

How Two Irish Brothers Founded A £ 70 Billion Company You Probably Never Heard Of | Technology

TSilicon Valley’s most valuable private company is a team most people have never heard of, unless they are a) Irish or b) technology investors. Is named Stripe, and this week the latest round of investments has given it a valuation of 95,000 million dollars (68,500 million pounds sterling). It was founded in 2010 by two smart young men from rural Ireland, brothers John and Patrick Collison, who were then 19 and 21 respectively. The latest valuation of his company, based on a recent $ 600 million investment from investors including Ireland’s National Treasury Management Agency, Fidelity and Sequoia Capital, means that each now has a net worth on paper in the $ 11.5 billion region.

The Collisons hail from Dromineer, a small town on the shores of Lough Derg in County Tipperary. When they were growing up, it was too remote to have an internet connection, and initially the only way they could get decent broadband was through an expensive satellite link. In a way, they look like young prodigies from the central cast. As a teenager, Patrick discovered Lisp, the programming language that was once the lingua franca of early AI programmers, and used it to create a conversational system that earned him Ireland’s Young Scientist of the Year award in 2005, at the age of 16. brother, two years younger, had the highest scores ever recorded on the Irish Completion Certificate.

When John was 15 and Patrick 17, they threw their first startups: Auctomatic, a software-as-a-service platform for big sellers on eBay to track inventory and traffic, and an iPhone app that provides an offline copy of Wikipedia (which they described as “The Hitchhiker’s Guide to the Galaxy “) on the phone. They sold Auctomatic for $ 5 million to a Canadian company, where Patrick worked for a year (he had retired from MIT in the traditional geek way), while John was at Harvard.

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Hear Patrick tell the story, as he does in a excellent interview from 2012 on YouTube – one is tempted to reach for a keyboard and start writing the script for a Local hero continuation. And yet it has a hard edge to reality. The two entrepreneurs were inveterate manipulators who stumbled upon a problem that was bothering almost everyone on the net at the time, but that no one had resolved: the fact that while it was easy to sell things online, setting up a system that could take the customers money safely. it was infuriatingly difficult and expensive. It involved obtaining a business account with several credit card companies, frustrating delays (the usual “five business days”), and very high transaction fees. All over the Internet there were new companies that had (as one founder said) “A growing waiting list of people who wanted to give us money but couldn’t.” The Collison brothers realized, Patrick said, that “the online payments industry was an unusually compelling example of an entire industry going to eat lunch.”

Having discovered such a tempting meal, they proceeded to feast on it. Stripe was designed to make setting up an online payment system as easy as checking a box on a website. Its software made it easy for any website or application to accept payments, without having to obtain their own licenses or close deals with different banks and card operators. In return, Stripe charges a flat fee of 2.9%. With that in mind, it was predictable that online businesses large and small would do so like ravenous wolves, including people one wouldn’t have predicted.

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Writers, for example. As traditional news outlets have withered, and even those that are still around have become unable or unwilling to pay writers, new blogging platforms such as Medium and Substack have emerged with different ways of allowing writers to earn. money. the daily version of my blogfor example, it’s on Substack and it’s free for subscribers. But if for some reason you decided to charge a monthly fee, all you would have to do is click a button and Stripe would do the rest. And it turns out that a lot of big-name writers and journalists have clicked that button in the last year.

Is easy to see why. Some of them (like Andrew Sullivan, Glenn Greenwald, or Scott Alexander, to name just three) have many thousands of subscribers. Just as a thought experiment, do the numbers – an author has 2,000 subscribers willing to pay £ 5 a month. That’s £ 10,000 of gross monthly income. Stripe takes his 2.9% (£ 293) and Substack his 10% (£ 1,000), leaving £ 8,700 to keep the wolf out of the gate. Everything from clicking a button.

Stripe’s current valuation may or may not be bullish. The industry he disrupted may have been dormant once, but it will act together and the Collisons will find themselves operating in a more competitive market. On the other hand, one of the few certainties in life right now is that online commerce is going to grow. And no matter how big it is, the two boys will have a piece. Three percent of a large number is also a large number.

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What i have been reading

Where to start?
How to put out the fire in the dump of democracy”This is an excellent article by Anne Applebaum and Peter Pomerantsev in the Atlantic on American politics and online media in the Biden era.

Posting propaganda
NYU researchers have written a good empirical research on how better far-right news sources are at getting Facebook users excited.

Webcam problems
What comes after “zoom fatigue”? More Zoom, Thinks Adam Clark Estes in his article on Recode. Sigh.

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