
How the Collison brothers turned ‘seven lines of code’ into Stripe - coloneltcb
https://www.bloomberg.com/news/features/2017-08-01/how-two-brothers-turned-seven-lines-of-code-into-a-9-2-billion-startup
======
eggbrain
If you are wondering how Stripe could even start with just 7 lines of code,
it's a bit misleading:

    
    
      With Stripe, all a startup had to do was add seven lines of code to its site to handle payments: What once took weeks was now a cut-and-paste job.
    

I.E. the simplicity of the Stripe platform (taking only 7 lines of code for
developers) was how they succeeded, not that they built a startup at first
with just 7 lines of code.

~~~
forkLding
I'm thinking for the layman who doesnt code which Bloomberg also targets, this
distinction is pretty negligible so in a way its not totally clickbait because
its still seven lines of code, for developers it seems to be the code you
write whereas the title could go anyway

Also really appreciate Stripe, registered for Delaware with them

~~~
saurik
To the layman, I imagine this reads as either "they spent a few minutes
writing one paragraph and made $9B" or "they agonized for years over something
as small as a single paragraph that was worth $9B"; neither of these are
reasonable interpretations. It is only to the advanced technical reader that I
think there is any hope of them interpreting it in the correct manner.

------
downandout
I don't know Patrick, but he has personally jumped in here on HN where
appropriate, publicly given out his own email address to handle issues, etc.,
and continued to do so even after Stripe achieved a $1b+ valuation. While most
of their billionaire Silicon Valley contemporaries are very hard people to
root for, I am rooting for these guys. They seem like genuinely good people
whose success is well deserved, and so far they have not let it go to their
heads.

~~~
pieterhg
Patrick is awesome! He asked me to have lunch after I tweeted feature
suggestions about Stripe. Indeed, which founder of a billion dollar company
does that (or has time for that)?

Another time, I had trouble getting the Stripe code to work and Stripe's
former CTO Greg Brockman debugged my PHP code (!) to fix it for me. I'm not
making this up.

The CEO wants to have lunch with me (a nobody) and the CTO debugs my code.

It's one of the few VC-backed companies I really root for.

Stripe has a great product, great service, solid business model (it can't get
more simple than % on transactions really), great engineering (their USP
is/was their API) and it seems they really support small and medium business
owners (and bootstrappers especially).

My only hope is anyone who will acquire them (and I think this will happen
soon) keeps the product at this level.

~~~
jacquesm
My hope is they will not be acquired and will keep this stand-alone as a true
alternative rather than be eaten and then to lose all their advantages.
Acquisitions of companies like this usually spell the end of the line. Here's
to hoping Stripe will IPO and will go on to acquire who could now potentially
acquire them.

~~~
jameskegel
I'm not sure who'd have the ability to make that type of acquisition, to be
honest. Maybe First Data? That would may even be a stretch.

~~~
jacquesm
Card issuers (VISA, MC), Amazon, Microsoft, major banks, Ebay, Paypal, Due,
Payline, Paysquare. A leveraged buy-out would enable many more potential
takers.

~~~
segmondy
Visa and MC are not card issuers. They are card networks.

A card issuer is a person that issues a credit card, so major banks, and Amex
who happens to be both a card issuer and card network.

------
mschaef
~12 years ago, it was Patrick Collison that was named young scientist of the
year for developing a dialect of Lisp called Croma:

[http://lemonodor.com/archives/001038.html](http://lemonodor.com/archives/001038.html)

I'm glad to see he has continued to do well.

~~~
akhilcacharya
I read these stories and feel like I was the only good kid that actually
focused in class.

~~~
komali2
I read them and see how all these smart entrepreneur types dicked around in
class reading books, just like me, except they turned out to be geniuses, and
I ended up just derping around Asia and frittering away my youth.

What did I do wrong? I blame WoW :P

~~~
Qub3d
Survivorship Bias [0]. It happens to be that a certain type of rebellious/free
thinking personality is the most likely to end up making a successful tech
company; but that doesn't mean _everyone_ who exhibits that trait succeeds.

[0]:[https://xkcd.com/1827/](https://xkcd.com/1827/)

------
smaili
Though not the primary focus of the article, this struck a chord with me:

> When bored in class, Patrick read books. “I would line up the angles so I
> was hidden from the teacher’s view,” he says, adding that he found out years
> later that an enlightened principal had instructed teachers to allow it.

~~~
mrisoli
I used to do something similar, I had quite a few bad teachers in college on
some very interesting classes, I would cut class to go to the lab and study
the same subject being taught there.

------
fpgaminer
I hadn't worked with payment systems for a number of years, but recently added
Stripe to a quick MVP I built (bitcoinvoice.com). It took two hours. I
couldn't believe how easy it was, and how nice the UX of the whole thing was.

I imagined the usual song and dance of writing a bunch of back-end code to
handle all their weird requests, worrying about double checking everything in
the requests to make sure nobody can spoof them, etc, etc. Ya know, the dumb
stuff that takes hours to write, hours to test, and days to wait for support
to get back to you because their test servers are broken.

And then I imagined waiting days for them to approve my account for live
transactions, requiring scanned copies of my driver's license with me flashing
some sort of gang sign while reciting page 452 of the 1993 re-print of Moby
Dick.

Nope. Turned out they have a synchronous API for processing payment so I don't
need to handle callbacks on the backend. Turned out the front end code was,
yeah about 7 lines (more with a few tweaks). And their documentation injects
your keys into the sample code for you (wow)! On top of all that ... they had
Go sample code!

And when I went to enable my live account, I'm pretty sure all they asked for
was name and address, maybe TIN. Nothing else. No wait. Just ... bam, I was
enabled and could start accepting live payments.

It was perhaps the most pleasant API integration I've ever done.

There are _some_ rough spots. They don't really explain Radar, their fraud
protection very well. It wasn't clear to me if it was automatically included
and handled. _shrugs_. And though they advertised support for Bitcoin
payments, it turns out you have to use their async API to accept Bitcoin
payments. I was willing to accept zero-conf payments, so I figured I could
just keep using their synchronous API, but I guess not.

~~~
jajern
I had pretty much the same experience. I programmed an API to talk to a
payment gateway connected to a chase merchant account some years ago. It was
not fun. When I setup Stripe I was confused when it was done and there weren't
25 more steps before it works.

------
cylinder
Anyone who dealt with Authorize.net should have seen the opportunity in making
these payments simpler... But I didn't.

~~~
jmtame
I vividly remember how difficult it was. You had to print pages off and fill
out all this stuff and mail it to someone.

------
wonderwonder
The article mentions this but for me the truly great aspect of stripe is that
they targeted the developer. I have dealt with several payment systems and
most of them have poor documentation and getting them to work is a lot of
trial and error. They appear to be monoliths who survive because management
has chosen them.

Stripe provides excellent documentation and support (on #stripe in freenode).
It just makes my life easier.

(I have never used Braintree so I can't comment on it)

~~~
mbrock
OMG, support on IRC? That's so legit.

------
willlll
> Over the past couple of weeks, Stripe began handling a large, though
> undisclosed, portion of Amazon’s transactions. Neither company will address
> the scope of the deal—which was only revealed by Stripe’s addition of
> Amazon’s logo to its website—but it could help Stripe greatly increase its
> trans­action volume.

So, reading into this, amazon presumably invested in stripe, then gave it some
transaction traffic to juice the numbers to make an S-1 look better?

~~~
omarchowdhury
This is quite interesting. What does Amazon have to gain from using Stripe?

~~~
Nilef
Amazon's overall goal is to take a cut of pretty much every piece of economic
activity. Taking a cut off of every payment made on the internet outside of
their own stores is an objective greatly aided by a stripe acquisition

~~~
th0raway
You have to look at it from both sides though: If I started a business with
Stripe as a processor, it's in Stripe's best interest for my business to grow
as much as possible, because the higher my volume, the more they make. They'll
want a good cut, but their goal is a long term relationship. It's not the same
thing with Amazon: Every piece of intel I give them is an opportunity for them
to eat my business.

I guess that if Amazon threw a crazy enough amount of money at them, then
sure, everyone has a price, but how is joining Bezos' empire helping them?
There's very little synergy in the other direction, so the premium for such an
acquisition would have to be very large.

When you put the premium there, along with how being acquired by Amazon makes
the competition more attractive, makes me think that something like that is
unlikely.

------
IgorPartola
For me, Stripe was a revelation because they eliminated fixed monthly costs.
When I ran a side project that took credit cards, I found the cheapest option
to be a $20/month merchant account + $20/month to Spreedly. Others had a few
months free trials, etc. but ended up being more expensive over the first
year.

Stripe, while being more expensive than these options per transaction,
actually cost me a lot less to start out. While $40/month doesn't seem like a
lot, for a hobby project that likely won't make that much money in the first
months to a year, it's huge.

~~~
robinjfisher
So much this. When I started Leavetrack[1] in 2011, it was so difficult to get
setup for recurring payments. I was using Chargify to handle the recurring
payments/credit card storage, a company in New Zealand (I am in the UK) to
handle the interface to my merchant account in the UK. Total costs:

\- c. US$40 per month for Chargify (which kept increasing) \- £20 per month
for the payment gateway \- £25 per month + transaction fee for merchant
account

So happy when Stripe landed in the UK and I could migrate to a flat fee per
transaction which scaled with me. Migrating is hard as you need customers to
re-enter card details but an offer of reducing their monthly subscription due
to savings in processing costs helped that process. :)

[1] [https://leavetrackapp.com/](https://leavetrackapp.com/)

~~~
IgorPartola
Re: migrating customers: I just grandfathered all paying customers to a
perpetual free plan. Weren't that many of them. Sadly that app never gained
traction. You'd think reliable up/down monitoring of unlimited servers at
$4/month would be a good deal.

~~~
hamandcheese
Maybe you weren't charging enough?

~~~
IgorPartola
I mean it was that and also that my free plan was too generous. And I am no
marketing genius so the customers I got were organic and came in slowly.

------
BigChiefSmokem
I love this. Simplicity and speed is what I fight for everyday at work but it
seems I am the odd man out in my field. Everyone just wants to write over-
engineered solutions that can launch space rockets with extra extra
modularization you know just in case the Hubble fails again and of course fear
of what may happen "in the future" in case "we ever need to scale".

How about we just focus on the job at hand for now and worry about things like
scaling and robust API/interfaces AFTER we actually acquire customers and
start making the money.

------
abalone
_> Over the past couple of weeks, Stripe began handling a large, though
undisclosed, portion of Amazon’s transactions._

Take this with a large, disclosed portion of salt. Amazon is big enough to pay
essentially nothing in processor markup. Not to mention they sell their own
payments service. If Stripe is actually handling any Amazon processing they
are making no money on it, and quite possibly taking a loss to buy the volume.

Think Square's deal with Starbucks. They ended up losing $56M.[1]

[1] [https://www.wired.com/2015/10/square-ipo-filing-shows-
starbu...](https://www.wired.com/2015/10/square-ipo-filing-shows-starbucks-
deal-was-a-bust/)

~~~
whipoodle
Since, as you point out, they're probably not making money on the processing
directly, maybe there is another reason Stripe would find it useful to process
a large amount of transactions...

------
balls187
Seems all kinds of shitty to have an article about "Two brothers" yet feature
a photo where only one brother is in focus.

~~~
skrebbel
I guess Patrick is the singer, John is the drummer.

------
Kiro
The biggest thing for me with Stripe was that I no longer needed a card
redemption agreement. Before that I had to deal with both my bank and the
provider and it was a bureaucratic mess.

I still wonder how Stripe managed to get around that.

~~~
cperciva
There is an analogous agreement, but it's hidden behind 'terms and conditions'
which you click through without reading.

~~~
crazypyro
Isn't part of the innovation the fact that almost all users can click through
that part of the process instead of spending lots of time in bureaucracy?

Is there justification for everyone who wants to process payments needing to
understand that type of legal document? Is there some major liability that
people are agreeing to when they accept the T&Cs?

I honestly just don't know anything about card redemption agreements and
google wasn't very helpful.

~~~
Silhouette
_Is there some major liability that people are agreeing to when they accept
the T &Cs?_

The agreements between payment services and merchants are some of the most
one-sided legal contracts you are ever likely to encounter. Unless you are a
huge merchant, they are probably non-negotiable. Typically they grant the
payment service and/or its associates the authority to literally take money
straight out of your bank account, impose often unspecified levels of fees for
vaguely defined transgressions, etc. They will also typically make the
merchant responsible for almost anything that goes wrong in terms of fraud,
other than perhaps a few specific exceptions where facilities like 3-D Secure
were used.

Stripe seems to be little better than anyone else with much of this, though as
I understand it that is partly because the card networks impose their own
terms and intermediary services like Stripe are essentially just passing them
on without having much say about it themselves either.

To give credit where it's due, I've never personally encountered Stripe
actually abusing those sorts of terms, and getting signed up with them in the
first place was dramatically easier than the alternatives available at the
time other than possibly entry-level PayPal (+ accompanying horror stories,
depending on who you ask).

------
tzs
How well does Stripe handle expired cards? The payment gateway we use now
allows sending an expiration date of 0000 on submissions that are marked as
being a recurring or installment payment. This attempts the transaction
without doing an expiration date check [1].

Stripe's documentation says that they automatically use the credit card update
services of Visa, MC, and Discover to update expiration dates of cards they
are storing, so that you don't have to worry about keeping the expiration date
up to date.

However, from what I've seen using the Visa and MC updater services, a
significant fraction of issuing banks do not support them and when requesting
updated information on those cards nothing comes back, and these cards often
still actually work fine.

Does Stripe having something equivalent to 0000, so that one can say "try to
charge this recurring payment on this card, even if we do not have the current
expiration date and the updater service did not give a response"?

[1] The expiration date on a credit card is the date that the card itself
expires, not the date that the account expires. For new orders, online or in-
person, an expired card should be a red flag because a person actually placing
a live order should have their latest card. Seeing an expired card live could
mean it is a stolen card.

------
basdevries
To add a bit of insight: most Payment-Service-Providers actually pay big
retailers to be listed on their site, as it improves trustworthiness and brand
awareness. So the Amazon deal might not be as favorable to Stripe as it might
sound.

------
nouveau0
How Two Brothers Fought Against All Odds And Things As Such As That:
[https://www.youtube.com/watch?v=ba9k5SWwE38](https://www.youtube.com/watch?v=ba9k5SWwE38)

~~~
droidist2
I need to finally watch this show!

------
heyrhett
"That figure has roughly doubled in the past five years"

So, 14 lines of code?

------
samblr
>>>> "Stripe made its debut in 2011 .... had spent two years testing their
service and forming relationships with banks, credit card companies, and
regulators so customers wouldn’t have to".

Can somebody help throw light on:

how Paypal was lagging in 2011 when compared to stripe ?

-OR-

how Collisons went forming better relationship with bank to build a system
better than Paypal ?

~~~
AdieuToLogic
Stripe is an ISO with First Data Merchant Services (FDMS, I believe now owned
or controlled by Wells Fargo) doing the actual processing and, as such,
assumes a different legal role than PayPal (which is a VAR for Paymentech).

The "two years testing their service" part is longer than a lot of ISO
certifications, but that all depends. Ultimately, though, it's a lot easier to
be certified as a VAR due to the fact that the processor (a bank usually,
though can be an ISO) assumes more responsibility (risk/liability) in the
relationship.

Regarding "forming better relationship with bank [sic]", it's not so much that
one is has a better relationship than the other as it is their relationships
are fundamentally different.

------
amichal
I am just now in the process of completing a migration from Paypal PayFlow
(Recurring Profiles) to Stripe (Subscriptions)

While Stripe's API documentation is MUCH easier to understand on the face
there is a lot of undocumented complexity hidden away in there that was
documented in Payflow Pro (mostly -- in a hard to find 400 page pdf).

In the end it is worth it for our specific use case. But like anything
involving money over time it is much harder then it seems. Obviously, WAY more
then "7 lines of code" to do it even halfway right.

I have to give massive credit to both organizations support engineers who
helped us move the card details across without us ever seeing them. In the end
they even ended up having to do a complex customer_id mapping for us to get it
done in a way that allowed us to recreate the behaviour we had in PayFlow in
Subscriptions

~~~
edwinwee
I'd love to hear more about the complexity you ran into to see if we can make
it easier. Could you email me at edwin@stripe.com?

~~~
amichal
The complexity was more in our customers application logic then in Stripe.
Stripe understandably enforces quite a few sensible limits that 'normal' usage
probably wouldn't hit. For us the 2 biggies were:

* There is a (undocumented?) limit of 25 subscriptions per customer. Our client sells a la carte services and some large customers have quite a bit more then 25 things. Subscription items partially solve this EXCEPT everything in a subscription must bill on the same-cycle and...

* Our client had a requirement to maintain the existing billing cycles for all customers (and enforce specific start dates for new subscription).

These two limits meant we had to bundle existing services into Subscriptions
during the migration and use the "trial period" feature (as a "start_date") to
force the billing cycle for each bundle. The worst case customer had I believe
18 different billing cycles for their services in the end so we got lucky. (we
also had to figure out a way to name the bundles in the UI and the CC
statement descriptor etc).

In the end this saves on transaction fees and reduces the clutter on their CC
statements but cost quite a bit of development effort to do and makes the code
managing "subscription" starts and stops a bit complex.

------
kodir
Dear Stripe team! I am trying to activate my Stripe account but after I press
the "Activate Account" button, keep getting "An unknown error occurred"
message.

Wrote about this in the "Feedback" form, but haven't heard back. Please help.

~~~
edwinwee
Weird, sorry about that. Could you email me at edwin@stripe.com and I can look
into this?

------
bigtunacan
My comment/question isn't about Stripe per se, but rather the surcharges of
payment processors in general. It seems like 2.9% + .50 is about average, but
then I see a site like
[https://sendmoneytoschool.com/](https://sendmoneytoschool.com/) and they are
charging a $1.00 processing fee for credit card payments to put lunch money in
my kids' school account.

Is there some way to get super low processing fees if you don't use something
like Stripe? Or are they taking money from the school and the parents? I'm
just wondering how low of a rate is is possible to get for your ecommerce
credit card payments?

~~~
Artemis2
It depends a lot on the card type, the location, the volume of the business
and it’s risk profile, but eventually can get to a pricing scheme called
interchange+, which is a fixed fee (generally <15¢) on top of the cost to
process cards for your provider (so fee from the issuing bank + network fee).

In the US this varies a LOT depending on the card type, but most consumer
cards are approx 1% interchange + a small fixed fee. In Europe these
interchange rates are regulated at 0,3% for consumer cards. There are cases of
special schemes (eg. CB in France) where processing can be even cheaper.

~~~
bigtunacan
Thanks. I wasn't familiar with this. That's definitely significantly cheaper
(transaction cost wise at least), but even then doesn't leave enough room to
profit on the transaction fee alone so I'm assuming they must be charging the
schools for the service and partially subsidizing with the convenience fees.

------
suhith
"“I would line up the angles so I was hidden from the teacher’s view,” he
says, adding that he found out years later that an enlightened principal had
instructed teachers to allow it. "

This is very cool, kudos to the principal.

------
michaeloblak
Is there any service that will handle the backend of the Stripe integration
for me? I'm talking about simple charging per product, ex. selling ebooks. Or
Squarespace like websites are the only solution here?

~~~
edwinwee
You might want to look into Upwork,[0] PeoplePerHour,[1] or Airpair.[2]

There are also some great third-party e-commerce integrations that are pretty
simple to set up: [https://stripe.com/works-
with/categories/ecommerce](https://stripe.com/works-with/categories/ecommerce)

Shoot me an email at edwin@stripe.com and I'd be happy to help you get
started.

[0] [https://www.upwork.com/hire/stripe-
freelancers/](https://www.upwork.com/hire/stripe-freelancers/)

[1] [https://www.peopleperhour.com/](https://www.peopleperhour.com/)

[2] [https://www.airpair.com/](https://www.airpair.com/)

------
Leigho_11
The article is inspiring at first glance but could cause a new programmer to
overlook effort and possible expenses associated with building such a website.
For instance, if the programmer has either front- end or back- end programming
skills but not both they will need to hire someone to build half of the
program. Still, lacking one or both skills they would need to have an engineer
or coder available to manage any potential bugs in the program and field user
requests.

------
rdiddly
_" There’s such an improbability to their story -— that these brothers from a
little village would come to build what could well be one of the most
important companies on the internet.”_

But is it, in fact, improbable? If you believe Paul Graham, the most
revolutionary ideas are _always_ going to come from off the beaten path --
from some backwater, either of geography and/or of ideas.

~~~
Lordarminius
“They have the advantage of coming to California without being tainted and
polluted by what’s in the water supply and air of Silicon Valley,”

That made me laugh.

But you are right: to create something really new, you must bring in a
different perspective. Frequently, this is possible only as an outsider.

------
edpichler
"How Two Brothers Turned Seven Lines of Code into a $9.2B Startup"

This is how NOT to do headlines.

------
sumedh
> forming relationships with banks

So can you just call up the relevant department in the bank and start talking
or do you need to know someone who knows someone in the bank.

------
vuyani
I opened the site and thought "oh, I didn't know scump is also a coder" :D

------
jv22222
We interviewed Patrick on TechZing back in 2012. Great guy.

[http://techzinglive.com/page/939/168-tz-interview-patrick-
co...](http://techzinglive.com/page/939/168-tz-interview-patrick-collison-
stripe)

------
maxxxxx
This headline really cheapens their accomplishments. It's not enough to start
a successful business with a lot of work but it has to be just seven lines of
code or over the weekend.

------
amelius
This is another example where a company did not do much out of the ordinary,
but in hindsight, it appears as if they did.

------
whipoodle
The bit about Amazon is the actual news contained in the story, if anyone here
is interested in discussing that.

~~~
strictnein
Yeah, this is really, really interesting:

> Stripe’s new partnership with Amazon. com Inc., the largest and most
> sought-­after customer on the internet. Over the past couple of weeks,
> Stripe began handling a large, though undisclosed, portion of Amazon’s
> transactions.

Lots of questions about why Amazon would do something like that. Is it so they
have a backup in case their systems go down? Or was Stripe actually able to
get better rates than Amazon was, so this will save them money?

~~~
dawson
I suspect Amazon will, if this isn't already part of that discussion and or
negotiation, acquire Stripe.

~~~
wumbolad
Yup, amazon has been all about acquisitions and broadening their horizons
lately. When they acquired twitch, they had regulations put in place first
test if things would stick. Then twitch was acquired after. Seems they're
probably doing the same with Stripe.

------
jaggajasoos33
Clickbait title but I get the point. They simplified something that otherwise
just too complex.

