[Bonus Episode 3] Stripe CEO Patrick Collison on Crafting a Culture that Prizes Details
When Patrick Collison and his brother John Collison founded digital payment company Stripe in 2010, he didn’t come in with “any kind of enlightened leadership expertise or genetic muscle memory.” As the company took off and grew to a dominant platform with $1 trillion in total payment volume and millions of customers, its culture grew more intentional—and strategic.
“Because Stripe’s domain is really complicated and the details really matter, if we make a mistake—just one mistake—there’s a very good chance that somebody’s paycheck is wrong…There’s a culture at Stripe of just really prizing the small details,” Collison says.
In this bonus episode of The Culture Kit with Jenny & Sameer, Collison shares his leadership journey and the evolution of Stripe’s unique culture in a fireside chat with hosts Jenny Chatman and Sameer Srivastava. This April 16, 2024 event was part of the Dean’s Speaker Series, co-sponsored by the Berkeley Center for Workplace Culture and Innovation. Bringing in a diverse mix of preeminent business leaders, the Dean’s Speaker Series provides the Haas community with insightful perspectives on effective leadership and opportunities for thought-provoking discussions. Learn more.
Do you have a vexing question about work that you want Jenny and Sameer to answer? Submit your “Fixit Ticket!”
You can learn more about the podcast and the Berkeley Center for Workplace Culture and Innovation at https://haas.berkeley.edu/culture/culture-kit-podcast/.
*The Culture Kit with Jenny & Sameer is a production of Haas School of Business and is produced by University FM.*
Transcript
[00:00:03.43] [MUSIC PLAYING]
[00:00:03.92] Jenny Chatman: Before we dive into today’s episode, we want to recommend another great podcast, Pfeffer on Power with Stanford’s Jeffrey Pfeffer. The show equips leaders with tools for navigating power dynamics, influence, and negotiation.
[00:00:20.42] Sameer Srivastava: It shares a similar focus on empowering leaders, just like our podcast does. Check out Pfeffer on Power. It’s also part of professors.fm, the podcast network that makes sense of the world with top scholars.
[00:00:36.16] [AUDIO LOGO]
[00:00:40.06] [MUSIC PLAYING]
[00:00:41.04] From Berkeley Haas and the Berkeley Center for Workplace Culture and Innovation, this is The Culture Kit with Jenny and Sameer.
[00:00:49.06] Jenny Chatman: I’m Jenny Chatman.
[00:00:50.47] Sameer Srivastava: And I’m Sameer Srivastava.
[00:00:53.55] Jenny Chatman: We’re professors at the Haas School of Business. On this podcast, we’ll answer your questions about workplace culture.
[00:01:00.15] Sameer Srivastava: We’ll give you practical advice that you can put to work right away.
[00:01:03.85] Jenny Chatman: Join us to start building your culture toolkit. Hi, Sameer.
[00:01:09.32] Sameer Srivastava: Hey, Jenny. So tell us about today’s episode.
[00:01:12.22] Jenny Chatman: Well, in the spring, we hosted Stripe co-founder and CEO Patrick Collison for a fireside chat as part of our Dean’s Speaker Series. He’s brilliant and charming, and he had some really interesting things to say about the company’s culture. So we wanted to share it with our Culture Kit listeners.
[00:01:31.02] Sameer Srivastava: Absolutely. It really made an impression on me when he talked about Stripe’s culture of craftsmanship and rigor and building something that can endure for decades.
[00:01:41.02] Jenny Chatman: Right. And he also had a strong perspective on remote versus in-person work as it relates to an organization’s culture.
[00:01:47.92] Sameer Srivastava: All right, so let’s hear it.
[00:01:49.56] Jenny Chatman: Welcome to our Dean’s Speaker Series, co-hosted by the Berkeley Center for Workplace Culture and Innovation. My name is Jenny Chatman. I’m the associate dean here at Haas. And I’m so absolutely thrilled to introduce our guest today, Patrick Collison. Patrick has been an entrepreneur, I’m guessing, since the day you were born.
[00:02:13.21] He created iPhone apps with his brother, John, and his team’s founding auctomatic while at MIT and co-founding his biggest venture, Stripe, which we’re going to talk a lot about. Stripe was born when Patrick and John looked for a payment platform but couldn’t find all of the features they thought would be important. And Stripe debuted in 2010 and grew exponentially because the product is really simple for businesses to implement. Of course, the back end is anything but simple, but it’s easy on the front end for customers.
[00:02:49.31] Through Patrick’s leadership, Stripe has reached– listen to this– $1 trillion in total payment volume. So it’s really becoming a dominant methodology. And today–
[00:03:02.45] Patrick Collison: You can’t assume the causality, though, there. You can’t say because of my leadership. It should be despite my leadership.
[00:03:07.33] [LAUGHTER]
[00:03:10.61] Jenny Chatman: I’m not sure that that’s correct.
[00:03:12.27] [LAUGHTER]
[00:03:13.43] But we will talk about the attribution. I’m sure you will deflect it, and we will keep it on. So today, millions of businesses from hypergrowth startups to global enterprises, like Ford and Amazon, use Stripe to accept payments and payouts, manage complex business online. We were back in our green room here, and Patrick was telling us about his biomedical research foundation, the Arc Institute, that he co-founded in 2021. Fascinating, fascinating work.
[00:03:44.66] Through the Arc Institute, Patrick and his co-founders are pioneering new model research in partnership with Stanford, UC San Francisco, and UC Berkeley and hopes to enable passionate biomedical investigations to study and address complex diseases, which gives us all great comfort to know that brilliant minds are researching some of the most difficult health challenges that we face. So, Patrick, we’re incredibly grateful to have you here today to impart your learnings on our student body.
[00:04:17.80] Patrick Collison: Thanks for having me. And it’s a particular honor to be here because the first time I tried to come here, you guys rejected me. So it’s–
[00:04:25.23] [LAUGHTER]
[00:04:27.66] I know. Look, I might have rejected me as well.
[00:04:32.16] Jenny Chatman: So did you land at your safety school, MIT?
[00:04:37.54] Patrick Collison: My first-ever trip to America was to the Bay Area to– and I visited Stanford and Berkeley. And those were my first literally two experiences of the US. And I just assumed all of the US is like this. And so then I decided to apply to college here, but I couldn’t get further than the East Coast.
[00:04:58.75] Jenny Chatman: Oh, my gosh. Well, that was a miss on our part. I can’t say it would be the first or last one. But anyway, let me introduce my colleague, Sameer Srivastava, my partner in crime. We are the co-founders of the Berkeley Center for Workplace Culture and Innovation. And many of you probably have had Sameer for the power and politics class. So, Sameer, welcome too. So let’s give now a proper welcome to Patrick, if we might. Thank you so much for coming up.
[00:05:28.71] [APPLAUSE]
[00:05:33.12] So let’s start with a softball question, which is if you could walk us through your career progression, I think it would be of great interest to our students.
[00:05:43.96] Patrick Collison: Oh, gosh, all right. Well, you already heard one important detail in it. So I grew up in very rural Ireland. And our house was far from the phone exchange, and this is more detail maybe in the career than you want, but you can push fast forward at any point. There’s the relevant consequence of that was we couldn’t really get a proper internet connection.
[00:06:06.76] And so I first learned about the internet by reading books from the library and to think, wow, this internet thing sounds great. And there was no TikTok or anything. And then actually, the first pitch I ever wrote was to my parents when I was 13, trying to convince them to get this pre-Starlink satellite internet connection from Germany.
[00:06:26.62] And they very graciously and, I don’t know, forbearingly acceded, and we got it. And it was 100 euro a month or something, which was a big deal. So once we got that, then I discovered programming and fell down that rabbit hole. And then when I went to MIT, and maybe you guys have had versions of this experience, but I considered myself pretty good at math and physics and science and things like that when I was in high school.
[00:06:51.61] And so MIT had three different intro freshman physics classes. And I thought with great ambition and virtue that I’d go take the hard one. I did, and it was hard. And they had this particular midterm that I guess they used to weed out, I don’t know, something. And I remember the average score in that midterm was a 43 or something. And I was feeling initially, I don’t know, well, mixed feelings but somewhat proud I’d scored a 70 or something like that.
[00:07:24.58] And then at the time they published everyone’s score publicly, and then I saw that this guy Yu Feijao. Had gotten a 97. And that was a big moment in my life, where, to be clear, I’ve never interacted with Yu Feijao. I don’t think he’s heard of me. But–
[00:07:41.97] Jenny Chatman: But you certainly remember his name, don’t you?
[00:07:44.54] Patrick Collison: He looms large in my life. And I thought, well, if Yu Feijao exists and can be so spectacularly better than me at physics, well, maybe I shouldn’t become a physicist, comparative advantage, Ricardo, the whole thing. So I did some soul searching. And, by the way, I looked him up, and he’s done very well now in math and physics. So I think we– And he now trains MIT Putnam team, and they’re doing– anyway, so he found his thing.
[00:08:16.33] Sameer Srivastava: But he didn’t found Stripe.
[00:08:18.05] Patrick Collison: Well, look, I think he’s not doing– I think Yu Feijao has self-actualized with tremendous effectiveness.
[00:08:26.62] Jenny Chatman: You both have.
[00:08:28.78] Patrick Collison: But I don’t have this programming in high school. And right around the time of that midterm, this was fall of 2006, Reddit was purchased by Condé Nast for, I think, $12 million. And I knew the Reddit guys a little bit because YC started out in Cambridge, and they were based there in Cambridge. And they were just normal people, or so I thought.
[00:08:53.56] And the idea that they’d just sold a website– I didn’t know you can make a website– for $12 million, there was a big shift in my perspective. And so I thought, well, not cut out to be a physicist. Maybe the startup thing could be interesting, and I really like programming. And so my brother and I, we decided to start a company. It did OK. It was acquired for a reasonably small amount.
[00:09:13.57] We went back to school. And something we learned over the course of that first company was cloud computing was just starting back then. I think EC2 launched in ’07, maybe ’08. And it was now getting incredibly easy to just launch a website, and you could do that in an afternoon. And you didn’t have to call someone up and rent a server.
[00:09:31.86] But whenever you wanted to move money, it was jumping back in time a century. You’d like go to a bank and fill out paperwork. And the forms were in Latin, or so it felt. And so it was just this weird dichotomy where certain aspects of setting up a business were becoming so streamlined and then other parts were– there was such high activation energy barrier and so much inhibition.
[00:09:56.50] And we thought something like Stripe must exist. And we were googling for it. How could there not be an easy way to move money online. It’s not an obscure need. But we eventually concluded there wasn’t. And so we were walking back from dinner not that far from here, a restaurant in San Francisco, and John turned to me. Actually, we’d come out here for a startup event at Berkeley, and you guys hosted YC startup school in 2009.
[00:10:21.16] And we were feeling very inspired. And after dinner, we were walking back. John said to me, well, we should just build a prototype of this Stripe thing. It can’t be that hard. Here we are.
[00:10:32.57] Jenny Chatman: Wow. That’s great.
[00:10:34.40] Sameer Srivastava: Great. So we wanted to ask you also about the early days of Stripe because every startup faces challenges and hurdles. So could you describe for us one big challenge or hurdle that you encountered in the early days of Stripe and how you overcame it?
[00:10:48.94] Patrick Collison: I had breakfast this morning with another startup founder, and we were reminiscing about or discussing the fact that people will sometimes ask us now– I mean, she’s been working in our company for, I don’t know, five or six years now. And people will sometimes ask, is it still fun? And we were making fun of this question because the early stages of a company are never fun.
[00:11:11.57] And so is it still fun? Which period was fun here? So look, the early days of Stripe, in hindsight, it’s now many, many intense experiences in life. You look back on them with some kind of fondness, but when you’re living them and when you don’t know the outcome, I mean, they’re just stressful. And I remember very vividly just how intently and intensively we worked.
[00:11:36.44] And I don’t know if we had to, but we felt like we had to, and we did. We started out down in Palo Alto. And we hired this guy who lived in San Francisco. He ended up deciding to move from San Francisco to Palo Alto because the last Caltrain left Palo Alto to go North at 11:00 PM, and he felt guilty leaving the office early every evening.
[00:12:02.08] Again, maybe we were misallocating our time or something. But just as a descriptive matter, that’s how it played out. And then, of course, there were all sorts of undulations and tribulations. I remember our first serious outage very vividly where people are using Stripe to move money. And if Stripe is down, their business is down. So we felt this very intense responsibility.
[00:12:24.34] And rack blew up at a data center, and Stripe, therefore, was unavailable. And we didn’t have proper redundancy at the time. And so I was paged at 2:00 AM. And very unusually, I’d left– I mean, Stripe was five people at the time. Very unusually, I had left my laptop at the office. So I get on my bike, pedal to the office, start trying to fix things. It took six hours. Eventually, 8:00 AM, 10:00 AM, it’s back online.
[00:12:49.15] I remember feeling so horrifically dejected because I realized as Stripe recovered that we hadn’t received a single complaint. Nobody had even noticed. Stripe was that inconsequential in the world. And then, of course, subsequent to that, we had production issues that were, in fact– there was no shortage of complaints. And you’re taught to be careful what you wish for.
[00:13:16.82] But I would say overall that– and by the way, I don’t think Stripe was in any way an unusual experience here. I don’t think it’s in any way unusual where the experience of the first five years were– it was fulfilling, but it was just difficult AF. And I remember Jensen recently saying publicly, Jensen Huang from NVIDIA, that if he’d known what starting NVIDIA would be like, even knowing the outcome today, the hottest company in the world, whatever, that if he’d known in the beginning what it would actually take, that he wouldn’t have started it. And I think even when you condition on success, you get a surprising number of responses like that.
[00:14:01.37] Jenny Chatman: Yeah. So we’ve been–
[00:14:03.86] Patrick Collison: I’m sorry. I’m really encouraging you guys to start a company. It’s great. Such a motivational fireside chat here. But, look, actually, OK, if I knew what it would take, I would still start Stripe there.
[00:14:15.18] [LAUGHTER]
[00:14:15.75] Sameer Srivastava: Right.
[00:14:16.87] Jenny Chatman: You heard it here first. So we’ve been really intentional here at the Haas School at creating a deliberate culture, which are our students know well we have four defining leader principles. One of my favorites is confidence without attitude, which is why I think our students are so open to learning and not overconfident. But I’m wondering about your intentionality in designing the culture at Stripe and what you did initially, how you scaled the company. I think now you have something like 7,000 employees. What looks different now? How is the culture doing? How are you thinking about it? We would be super interested to know.
[00:15:00.29] Patrick Collison: Well, just you mentioned the culture or the values here. And actually, we did notice pretty early on– and I won’t mention any other schools, but we noticed that Berkeley students were more humble. And that was something that– but you can’t let that go to your heads. It would be self-defeating.
[00:15:15.87] [LAUGHTER]
[00:15:17.30] And so you can’t be proud of that. But, yeah, I don’t know if it’s the Irish thing or something, but somehow– I mean, Ireland has a hypertrophic pernicious version, I think, of humility where we start to get resentful of anything that’s successful. U2 or any tremendous Irish export, we take a very dim view of those things.
[00:15:39.24] [LAUGHTER]
[00:15:40.97] Anyway, so partly because we knew that Stripe, even if it worked, would take a long time just because it’s an infrastructure business– with Snapchat or TikTok or something, everyone can just decide overnight, we’re going to adopt it. It’s going to become super popular within two years. It’s an overnight success, whatever. If you look at the internet or if you look at, say, a company like Amazon, the kind of the companies that are operating more at the infrastructure level–
[00:16:06.32] Amazon, within its first couple of years was not growing 100% year over year or something like that. Amazon within four years was growing at about 30 points a year. And what’s remarkable about Amazon is just the durability with which they’ve sustained that growth. But the rate itself is not particularly noteworthy. And similarly, if you take the internet, the internet has grown at a compounded rate of around 30% to 40% year over year.
[00:16:27.80] But in no year after the first two, I think, did the internet double year over year. Again, it was just this remarkably sustained growth over the course of now more than four decades. So we knew that Stripe, again, even if it was going to work, would probably have roughly that kind of character. And so, yeah, we wanted to figure out a cultural orientation that we thought would befit that.
[00:16:50.15] And that requires recognizing that we’re not here to build cars. We’re here to build roads. And it’s the kind of personality not of someone who wants to build some hypersuccessful consumer app, but the kind of person who would like to build a TCP stack. And that’s not everyone, and that’s fine. We need cars for the roads, and so there’s a diversity of different skills required.
[00:17:16.52] And then because Stripe’s domain is really complicated and where the details really matter, if we make a mistake, just one mistake, there’s a very good chance that that’s somebody’s paycheck is wrong or something, even in a single instance. There’s, I think, a culture at Stripe of just really prizing the small details.
[00:17:40.85] And we talk a lot about craftsmanship and rigor and abstractions that can endure over decades and really getting those right. So I would say, precision is pretty deeply embedded.
[00:17:53.57] Jenny Chatman: Yeah.
[00:17:54.04] Sameer Srivastava: So could you talk a little bit about your own leadership journey during that process? It’s one thing to be the leader of a small startup, another to be running an organization of the size and scale that Stripe is now. And thinking in particular about this idea of rigor or precision, how do you really try to embody that and reinforce it through your own leadership?
[00:18:15.22] Patrick Collison: Well, the good news about startups is that as far as I can tell, if the initial idea is good and if the market is good, those core characteristics, and if you’re willing to recognize your mistakes, startups, I think, are actually quite resilient. And they can endure a lot of managerial malfeasance as you learn along the way.
[00:18:44.35] And I definitely didn’t come to Stripe with any kind of enlightened leadership expertise or genetic muscle memory or something. Stripe didn’t have any managers until we were 70 or 80 people. And that’s not a best practice. [LAUGHS] If we’re doing it all again, I would definitely invert colors on that one. And lots of other things that I think, in hindsight, were ill-advised and mildly unhelpful but empirically survivable.
[00:19:19.36] And so I think at a meta level, the question is much more the rate of adaptation, the rate of learning. And John and I, we’re– Stripe conducted layoffs in 2022 during the pandemic. I just said a moment ago that the internet, Amazon, whatever, didn’t grow that quickly. During the pandemic, it was such a crazy time that even though, again, Stripe broadly has that character, we roughly doubled in 2020 and 2021.
[00:19:48.98] And so our forecasts how big we would be and how we would need to sustain the service and everything got pretty out of whack. And so in 2022, we were trying to rectify this, obviously, acknowledging a misprediction on our part and a significant mistake. And John and I had this conversation where we decided imagine that we are marauding private equity raiders who’ve just purchased Stripe.
[00:20:17.31] And we are horrified at the decisions that prior management has made and the wanton errors and mistakes and grievous instances of mismanagement that have been committed. I think it’s much better to be right than to be consistent. And I think somehow getting yourself into the psychological frame where that’s OK and you can swiftly recognize, well, I tried this. It’s really not working. Let’s do something else. I think as long as you can get into that mindset, then I think a lot of the actual errors themselves are recoverable.
[00:20:53.42] Jenny Chatman: Yeah. Better to be right. We agree with that. So–
[00:20:59.66] Patrick Collison: It’s easy to say. I think a lot of people, and to be clear, even myself, I think we all feel a surprisingly strong psychological pull to intertemporal internal consistency.
[00:21:11.09] Jenny Chatman: Well, there are huge biases. Actually, one of the deep experts in what’s called the escalation of commitment cycle, Barry Staw, was a professor here for many years. And it’s a very, very treacherous bias, that consistency. People really worry about having an external image of consistency and even maintaining consistency internally because, in some ways, consistency describes the essence of who you are.
[00:21:38.74] Patrick Collison: Yeah. And look, I mean, presumably there are some set of things about which one ought to be consistent. And so it’s maybe wrong to toss consistency overboard wholesale. But tying your self-conception and identity to specific management practices seems like maybe overconstraining the action space.
[00:22:00.41] Jenny Chatman: Yeah. Well, I mean, the countervailing force is an experimental mindset, where you’re actually discarding ideas that aren’t working because they’re not working.
[00:22:11.15] Patrick Collison: Yeah. And, yeah, again, maybe the fact that we came from the middle of nowhere in Ireland, it was– Irish wouldn’t think that is, I think, helpful. A lot of different cultures around the world have some self-conception of grandeur. The French people, English people, the Americans, one could occasionally accuse them of that.
[00:22:30.22] Jenny Chatman: What?
[00:22:30.52] [LAUGHTER]
[00:22:32.92] Patrick Collison: One thing that’s great about Ireland is we never have delusions of grandeur. And Ireland never thought of itself as the best country in the world by objective criteria. I’m very fond of it, to be clear. And so anyway, it wasn’t that hard for us to think, well, we know nothing about this domain. And we should assume that 70% of the things we try will turn out ex post facto to be mistakes.
[00:22:56.79] Jenny Chatman: Yeah. Yeah, yeah. Well, an interesting issue. So switching topics a little bit, there’s a lot of discussion about– well, we used to think about hiring people for culture fit. In fact, my dissertation was on culture fit and understanding all about culture fit. And in addition to finding people who can do the job, you want to find people who resonate with the culture that you’ve created.
[00:23:22.68] But people are now talking about culture add and ensuring that you’re not just fueling a homogeneous mindset in an organization. And so I’m just interested to find out where Stripe is on this balance.
[00:23:39.21] Patrick Collison: Well, I think this question is really interesting at the meta level, where how do we have more variegated and heterogeneous cultures across an industry and across a society and around the world so that people can find the place where that place is me? And actually, one of the things that I really like about the internet– Stripe’s mission is to increase the GDP of the internet.
[00:24:04.20] There’s a fundamental question of like, why should you be excited about that? Who cares? And I think part of it is that it enables increased access to goods, generally, where for most people in most parts of the world, it’s pretty difficult for them to benefit from the set of goods and services that, say, we here in the Bay Area might be able to purchase.
[00:24:23.73] And again, growing up in Ireland, there were so many magazines or newspapers or whatever we would get. And there’d be little fine print often not applicable in the Republic of Ireland, where it was printed for the UK, but they hadn’t figured out the shipping mechanics for Ireland or something. So something I think about the internet is just about this global extension and global access.
[00:24:41.90] But maybe a second-order aspect of the internet that personally appeals a great deal to me is I think we want a richer society, not in the pecuniary financial sense, but in the second sense of the word, is one where there’s a greater array and more complexity of goods and services and that variety is in more abundance. And if you can aggregate more demand via the internet, well, then it can make sense to serve some very narrow niches.
[00:25:12.72] And part of what I love about Stripe is, you know, I’ll stumble upon so many businesses where I think, wow, I would never have thought that could even be a business. A marketplace for user designed and user-created action figures, or CRM for Boy Scout troops. These things would never make sense if you just had a village, or you just had a town. It only makes sense where you can aggregate the entirety of the internet’s demand. So anyway, I think that this also with respect to cultures, and if one can only work in one of 10 businesses, well, by necessity, they’ll probably all have something approximating the same kind of culture just by virtue. There can’t be that much self-selection going on if there’s only 10 places. And I love finding organizations with just very unusual– places where the central limit theorem doesn’t apply.
[00:26:10.61] I visited the folks at Jane Street not that long ago, and I really think Jane Street would not be for most people. I mean, it probably wouldn’t be for me. But like for the people at Jane Street, it seems awesome. And they stay there so long. My wife’s a scientist, and as you get a sense for the cultures of different departments at a university or even across universities, you realize, well, some of these have very unusual cultures. And again, probably not even for most scientists in that area, but right for a little group of people who can affiliate. So anyway, just to your point about culture of add, I think figuring out mechanisms by which we can enable more of that structural diversity across the board. I think that’s really helpful.
[00:26:50.92] Sameer Srivastava: So turning to unique cultures, I want to come back to Stripe, and one of the cultural tenets that you have talked about is being, quote, “continually paranoid at the prospect that we might be forgetting something important”. So I’m wondering if you could give us an example of that tenet in practice. But also, how do you keep it from going too far, from being too paranoid?
[00:27:13.00] Patrick Collison: Can you be too paranoid?
[00:27:15.64] Sameer Srivastava: What do you think?
[00:27:18.28] Patrick Collison: If one can be too paranoid, then we might have to reconsider some things. So the thing that makes me so paranoid, and maybe this is more idiosyncratic to Stripe is, again, we handle around $1 trillion a year, and that works out to around 1% of global GDP. And again, there’s just basic point that if Stripe is unavailable, that’s a lot of people and a lot of businesses and a lot of activity that isn’t happening. And during the pandemic, DoorDash, Instacart, and Zoom and Amazon and so many of what felt like load bearing pillars of society, they were handling their transactions with Stripe. And so we feel this extremely solemn and custodial responsibility to be able to provide uninterrupted service to them the way that they ought to expect. And so it’s less a competitive paranoia and more paranoia that will screw something up with respect to our obligations to them. Again, I don’t know if you could take that too seriously, but for us, it’s very weighty.
[00:28:26.42] Jenny Chatman: So I have a question. I used to teach a case about John Reed, who decades ago was the CEO of Citigroup. And he was one of the first to use a metaphor of the back office being like a factory. You use a metaphor of front office, back office in finance, being more like a bicycle, which I find appealing. I’m a cyclist. So what does that actually mean, and how does that influence how you make decisions and how roles are thought about within Stripe?
[00:29:03.04] Patrick Collison: Well, I’ve forgotten I said that. So thank you for– it’s a good metaphor. But the thing we spend a lot of time thinking about is– necessarily in organizations, you– or maybe necessarily is a strong word, but the holacracies haven’t worked that well. So it appears necessary with current organizational practices to have some kind of a hierarchy, and I don’t have a better idea. So let’s just take that as a premise. That necessarily involves something like logarithmic game of Chinese whispers and information loss through transmission.
[00:29:39.49] And so the picture that the people making the most important decisions may have might be meaningfully divergent from that which is actually true. And so the thing I’m always wondering about is just how do I know what’s actually true and not just how do I know, but how do leaders generally across Stripe know what’s actually true. And so we build our own internal project management software, and it’s less because we want to be able to customize the animations. It’s more that because it is so important that we know what reality is saying that we want to be able to figure out the optimal way of surfacing that context.
[00:30:18.72] And true to some extent in every organization, but I think it’s especially true in knowledge work and in the creation of– software is an interesting thing, where there’s mining where maybe there’s just some kind of linear elasticity between the number of people extracting the rock from the ground and how much rock is produced and the economic value or whatever. It’s very kind of Taylorian. And then you have movie making or novel writing where if you’re a publishing house, you can’t just measure your likely prospective success on the basis of just number of writers. It’s so sensitive to the specific efficacy of every individual person.
[00:30:58.56] And I think creating software is, in interesting way, halfway between mining and novel writing, where, look, there is some scaling in the amount of work. And one person could not build all of Facebook or choose your service. But it’s definitely not linear. And for us at Stripe, even though decisions have to get made, the work is not being done by the decision makers. The software engineers and the designers and everybody involved in– the partnerships people, whatever– in the creation of the product. They’re our authors. They’re the people actually creating Stripe, and everyone else is in some sense playing a supporting role. And I think it’s important to have that inverted mental model in mind, and it’s not a feel-good thing. It’s a deep truth. I don’t know how many support staff work behind JK Rowling to enable the books to get published, but JK Rowling is the one doing the writing.
[00:32:01.95] Sameer Srivastava: So I want to turn to another facet of the culture at Stripe, which has to–
[00:32:05.52] Patrick Collison: Can we talk about JK Rowling or is she canceled?
[00:32:07.83] Sameer Srivastava: I think–
[00:32:08.38] [INTERPOSING VOICES]
[00:32:10.19] Sameer Srivastava: We’ll let it slide this time.
[00:32:12.99] Patrick Collison: We’re at the business school.
[00:32:14.28] Sameer Srivastava: Yes, exactly. So the other facet of the Stripe culture I want to talk about is the writing dimension. And of course, it’s becoming more pervasive now. But my sense is you were one of the early adopters of a writing culture. So tell us a little bit about where that comes from, and then how you reinforce it.
[00:32:33.66] Patrick Collison: I know what you mean. It’s kind of funny to consider oneself an early adopter of writing culture. Well, partly, I think it comes from– we were just misanthropic introverts in the beginning. And even when there’s only four or five of us working on Stripe, we would just communicate a lot in written form because it’s less oppressive than having to talk to each other. So part of it was just that predisposition of early people. And to be clear, I very much include myself. John, my co-founder, is much more extroverted and charming. And usually, it’s rare that I’m wheeled out for public engagements, and–
[00:33:14.73] Jenny Chatman: He’s the front man.
[00:33:15.94] Patrick Collison: You can see why. So if John didn’t exist, it’s unclear whether Stripe would have any customers. But I do like writing, and I like reading. Bruno Latour has this piece, and he overcomplicates it because you have to for that kind of work. But he has this piece about immutable, I guess, mobiles since he’s French. And he makes this point that the printing press, is maybe correctly associated with the advent of the scientific revolution. But maybe the simplistic sense in which we might perceive the causality there as we have the printing press. We can distribute more stuff, and now just people have more information, whatever.
[00:33:57.60] They come to more insight. He makes the point that before the printing press, manuscripts were necessarily copied by hand. And in the act of copying by hand, obviously there’s the prospect of the introduction of error. And so that means when you encounter or confront some observation where there’s a disparity between that claimed by the work or by the theory or whatever, and what is it you see, you can’t really tell. Is it because the theory is wrong or just because there was some boring mistake made along the way? And it’s when knowledge became more rigid and that it became easier to break in a way that is conducive to the rejection of false theories and inadequate explanations.
[00:34:39.58] I found that very thought provoking, and I think there is something to that. And obviously, this also gets the difference between oral cultures and literary cultures where I guess back to this idea of assuming that 70% of what we believe is wrong, if we don’t write it down, it’s going to be harder to remember what specifically we thought and what specifically we believed. Because our minds will play subtle tricks on us. And so I think part of the value in writing things down is our past selves look stupider. And that’s actually very adaptive because we’re like, wait, we had these beliefs and just clearly these two are not true. And I think, yeah, that robustness through time makes it easier to find our flaws.
[00:35:20.68] Sameer Srivastava: I was going to say, as a sociologist at a business school, I’ve talked to lots of CEOs. This is the first time someone has brought up Bruno Latour in a response to a question so very impressive.
[00:35:30.98] Jenny Chatman: Yeah, actually, Sameer and I have a podcast because, like, who doesn’t? And our second episode just dropped today, and it’s about– CEOs have been– lots of managers have been asking us about work schedules and remote work and hybrid work and what’s working. So since we don’t know the answer, we’re going to ask you. So I understand that Stripe’s remote workforce increased from about 20% pre-COVID to almost 40% now. Is that about right? Yeah, so how has this influenced the company? What differences do you notice? Is it what you’re expecting for the long term?
[00:36:13.71] Patrick Collison: Well, I think the right answer is probably quite scale dependent. And with Stripe now being 7,000 or 8,000 people, we can’t all fit in the same room regardless, no matter how draconian our in-office policy. And furthermore, we serve businesses and employ people all around the world. And so we’re necessarily somewhat remote in that sense. There is no universe in which we’re not having lots of Zoom meetings just because of the globally distributed nature. And so the question is more something around the exact nature of the interactions we want people to have in the course of their day but not, again, whether they’re conducting a lot of work that is distant from their colleagues.
[00:36:54.47] And so I think for a large organization for whom that’s the case, there are considerable benefits to in-person work just for boring reasons. I mean, this becomes such a religious debate. But I think a bunch of the precepts are, I think, fairly uncontroversial. There are some people who are really effective and really enjoy working in their cave. I think I would probably one of those people, and sadly, I’m not in a role where that makes sense. But some people are, and that’s great. And other people, they get really bored, and they get cabin fever. And they really want to be around other people, and those people exist as well.
[00:37:28.63] And society probably needs to have some mechanism for the provision of employment for both categories. It’s probably a significant efficiency gain to have more options for the cave dwellers, the people who just want to sit in the room and do the work by themselves, again, like me. And then you have to think about it longitudinally where there’s a question of skill and culture and knowledge transmission. And so I think some of the analyzes that look at short-term efficacy, I mean, that’s interesting. But ideally, you have to take a full life-cycle view. And I think that’s the cohort of change over a workforce. And Berkeley has a pretty strong culture, as I understand it.
[00:38:07.55] And if Berkeley went remote, maybe Berkeley would be fine next week or next month. But the idea of for 20 generations of Berkeley students being remote, I have to think that culture would at least be different. So I think all those considerations apply but maybe relevantly for this room. I don’t know. I do notice that the 10 person, the 20 person, the 50-person companies for whom being in a room together is an option, the ones that exercise that option really seem to do better. And I think we all even intuitively kind of know it, where I often ask parents, if you’re a kid was considering two different jobs– one is fully in person resolutely five days a week, and one is loosey goosey or fully remote or something– with your kid’s best interest in mind, which would you advise them to take? And no parent that I’ve asked has ever hesitated in answering that question.
[00:39:01.30] Jenny Chatman: Patrick, a whirlwind of insight, and we are so grateful for coming to share your thinking. We hope you will come again sometime soon. But let’s offer Patrick our deepest thanks for–
[00:39:16.49] Patrick Collison: Thank you very much.
[00:39:17.33] [APPLAUSE]
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[00:39:20.18] Jenny Chatman: Thanks for listening to the Culture Kit with Jenny and Sameer. Do you have a question about work that you want us to answer? Go to haas.org/culture-kit to submit your fix it ticket today.
[00:39:32.97] Sameer Srivastava: The Culture Kit Podcast is a production of the Berkeley Center for workplace culture and innovation at the Haas School of Business and is produced by University FM. If you enjoyed the show, be sure to hit that Subscribe button, leave us a review, and share this episode online so others who have workplace culture questions can find us too.
[00:39:53.34] Jenny Chatman: I’m Jenny.
[00:39:54.15] Sameer Srivastava: And I’m Sameer.
[00:39:55.26] Jenny Chatman: We’ll be back soon with more tools to help fix your work culture challenges.
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