Annual letters give us a glimpse into the minds of the founders. It’s an excellent way to understand what drives them and their companies.

Stripe is a financial services company that provides payment processing, software development, and risk management tools for businesses of all sizes. In February 2023, Stripe released its annual letter, which provides an overview of the company’s performance in 2022 and outlines its plans for the future.

The letter, written by Stripe’s co-founders, John and Patrick Collison, contains valuable insights for founders.

“The world is a museum of passion projects”

John & Patrick

Key takeaways

• *Focus on building a fantastic product – * Or, in the words of YC: “Build something that people love (not like).” Stripe’s success is built on the foundation of its excellent payment processing platform. Their developer experience (DX) is one of the best in the world. Try their APIs and docs, and you will see. The company is constantly innovating and adding new features to its platform, which makes it the go-to solution for businesses of all sizes. Here is a demo I built (many years ago): https://greenido.github.io/Product-Site-101/ – You can see the code and how easy Stripe made the process of taking a credit card from your users.

• *Build a strong team – * Stripe has a world-class team of employees passionate about the company’s mission. The company invests heavily in its employees, providing them the resources and support they need to succeed. The ability to hire the ‘right’ talent will make (or break) your startup. It’s a challenge; there is no ‘checklist’ for that.

• *Be customer-centric – * Stripe puts its customers first. The company listens to feedback and constantly strives to improve its products and services.

• *Grow sustainably – * Stripe has grown rapidly over the years, but the company has done so in a sustainable way. The company has a solid financial foundation and is well-positioned for continued growth. In the last rounds of ‘cuts’ on the tech sector, Stripe is doing slightly less than other companies that have grown (too much) during Covid.

Some numbers

• Stripe processed $817 billion in payments in 2022. This represents a 26% increase from the previous year. Stripe’s payment volume reflects the continued growth of e-commerce and online payments. Stripe’s market share in the online payment market is estimated to be around 15%. This makes Stripe the third largest payment processor in the world, behind PayPal and Square.

• Stripe added 365,000 new businesses to its platform in 2022. This brings the total number of companies using Stripe to over 9 million. The growth in Stripe’s customer base reflects the company’s commitment to providing a simple, reliable, and affordable payment processing solution for businesses of all sizes. I tried their APIs (a few times), and they have one of the best APIs and, in general, DX (developer experience).

• Stripe launched new products and features in 2022, including Stripe Capital, Stripe Issuing, and Stripe Treasury. These products are designed to help businesses grow and scale.

  • Stripe Capital – Provides businesses with access to Capital to grow their businesses.
  • Stripe Issuing – Allows businesses to issue their own branded credit cards.
  • Stripe Treasury – Provides businesses with a suite of treasury management tools like holding funds, paying bills, earning yield, and managing cash flow. It is ideal for companies that want to offer their customers a seamless and secure financial experience. Some of the potential customers of Stripe Treasury include:
  • Marketplaces: These can be used by marketplaces to create a single platform for buyers and sellers to transact.
  • Platforms: Stripe Treasury can provide its users with various financial services, such as bank accounts, loans, and credit cards.
  • Fintechs: Stripe Treasury can be used by fintechs to build new financial products and services.

• Stripe is committed to building a more inclusive and equitable financial system. In 2022, Stripe launched the Stripe Equity Fund ($1 billion in AUM), which provides Capital to Black and Latinx-owned businesses. The fund is designed to help close the racial wealth gap and support the growth of Black and Latinx-owned businesses. The fund has made investments in a variety of businesses, including:
  • AfroTech is a digital media company that covers the Black tech community.
  • Blk Capital is a venture capital firm that invests in Black-owned businesses.
  • Clover is a point-of-sale software company that serves small businesses.
  • Harlem Capital is a venture capital firm that invests in Black and Latinx founders.
  • Inspired Capital is a venture capital firm that invests in Black and Latinx founders.
  • Plaid is a financial technology company that provides access to financial data.

The Stripe 2022 annual letter is a valuable resource for founders. The letter provides insights into Stripe’s success and offers advice on how founders can build successful businesses.

Patrick and John are (still) at a different level than Buffett and Munger but still have ~70 years to improve.

Be strong