Jay:  This week I thought I’d share with you guys my recent fireside chat with Will Gaybrick during the RISE Conference. If you aren’t familiar with it, RISE is the largest technology conference in Asia, featuring 100 countries, 25,000 attendees, and over 1000 startups.

Will is the CFO and chief product officer of Stripe, which is a late-stage private company now valued at over $22 billion. Stripe has managed to simplify and streamline payments for clients like Target, Lyft, Under Armor, and Slack. It was a very interesting chat that we had titled “Moving Money at Internet Speed and Scale.” We spoke at length about the tech and thinking behind the movement of money, payments, and cryptocurrencies. Please enjoy my conversation with Will Gaybrick.

RISE — Every year this crowd gets bigger and bigger. So thank you Casey and Paddy. You guys are doing an amazing job and increasingly doing a better job each year.

Will, thanks flying out here from the Bay Area and sharing your story with us and teaching us a few things about the wonderful business that you’re building.

Will:  Thank you.

Jay:  I don’t think anyone in this room actually has not heard of Stripe or hasn’t actually used the product, but for the few stragglers that might be out there, on a very fundamental level, what does Stripe do? What problem are you trying to solve? How does it help individuals and SMEs and large multinational corporations?

Will:  Thanks, Jay. Hey, everyone. So great to be here. Please excuse me if I’m a little jetlagged. I’ve been here for all of ten hours but really excited to be here. So hopefully I can keep the energy up.

When you say “a basic level,” I guess the way I think about it is… At Stripe, we think about not what startups want, what large companies want, but what is true of all companies. We have a basic framework for that, which is that companies want to grow their revenue faster with less effort.

 We started working with startups. As a startup, our customers were startups. And startups are actually a really interesting type of customer we cater to for a few reasons. On the one hand, they’re willing to experiment. They move really, really quickly. They like to hack on new technologies. So if there’s new technologies out there that are going to be big in five or ten years, you can bet that they’re using it today.

One thing that people don’t often think of with startups is they’re an incredibly demanding type of customer. They want to move quickly. They want to be super agile, and they don’t like you to slow them down.

So we started by working with startups. What happened was these startups grew. So when we thought we were working with startups and small companies, suddenly we were working with a bunch of public companies. In fact, a lot of our users who have been working with us for years went public this year — the likes of Lyft and Slack and a bunch of others.

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.

Jay:  That’s incredible. You guys have had an incredible year — latest valuation round estimates over north of $20 billion. Maybe you can talk to us a little bit about the growth in the last couple of years, how you’ve seen it just explode, and maybe some of the large corporations that you’re working with — the likes of Slack and Lyft and these types of people.

Will:  One of the big themes for Stripe has been globalizing in general. What I mean by that is not only product. We’ve launched in a bunch of new geographies. We’ll be live in over 40 countries this year and paying out to many more than that, but also globalizing our own organizational footprint. So last year we launched Singapore as an engineering hub. I think we had a dozen people there around this time last year. Now we have over 100, and it’s growing really, really quickly.

I think what we’ve found is that in order to serve users globally, we actually have to be hyper, hyper local. The needs of our users fragment and shard locally based on payment methods — in particular here in Asia there are so many payment methods; it’s a burgeoning ecosystem of wallets — and also local regulations. You have different local regulatory regimes all over the world. So we have to think about how regulations are changing in the US, think about Payment System Directive 2 (PSD2) in Europe, also customer authentication coming online, as well as everything that’s happening here in Asia.

Jay:  You mentioned the launch of a couple of engineering hubs. Obviously Singapore was a couple of years ago. You launched it, and now it’s, obviously, a huge marketplace. You said over 100 employees there now. It used to be a small little startup office. Talk to us a little bit about Asia. This is the Asia conference, so we want to focus on Asia. How does Asia fit strategically within your global vision?

Will:  I guess I’d say a couple of things. Number one is — and I’m not just saying that because we’re here in Hong Kong — we’re incredibly optimistic about tech in Asia. It’s hard not to be at this point. There’s a few reasons for that.

There’s the perfect storm of giant and relatively developed economies. You have this wave of people coming online. 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. And so there’s this incredible wave of commerce coming onto the internet. And you’re also free of a lot of the legacy payments infrastructure that’s holding back some of the online economies in the West. So you get to build it from the ground up here. So much of the fun stuff that people built decades ago in the West, in a more rickety way, is not here. And so you get to innovate from the ground up.

Another part of it, which I already hit on incidentally, is that Asia is just freaking huge. That makes for an incredible opportunity. But it also makes for a lot of challenges. As I mentioned before, one of the biggest challenges for us is being both global and hyper local at the same time. You have different regulators enshrining local cultures into law. You have payment methods cropping up all over the region. You have Alipay, WeChat Pay still dominant in China. You’ve got GO-PAY ubiquitous in Indonesia. You’ve got Grab doing amazing things with Grab Financial and GrabPay. In Singapore 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.

Jay:  It’s pretty incredible because, because of the internet and where we are — you hear this all the time — it’s easier now to build a business than it’s ever been in history. At the same time, I feel like regulatory has stepped up. It’s harder now to deal with these regulators, especially in Hong Kong. I’m from Hong Kong. I live here, and the biggest pain point that a lot of entrepreneurs here in Hong Kong is a simple fact of opening a bank account, let alone setting up a payment processor, finding your merchant bank, blah, blah, blah. It’s almost laughable how difficult it is and how hard it is for an entrepreneur to start a company.

How do you think that Stripe can actually help disrupt this, especially in Asia? And how have you guys as a company worked with regulators in Asia to address this?

Will:  You mentioned that it’s gotten a lot easier to start a business. That is true in a lot of ways. If you look at the cost of starting a business, it’s gone by, I think, more than an order of magnitude over the past decade.

At the same time, 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. At the same time, something like 90% of venture-funded startups 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.

Interestingly, we’ve found that in working with regulators all over the world, actually on a one-to-one basis, it’s gone very, very well, and regulators are very well intentioned and trying to find the right balance between protecting consumers and businesses, on the one hand, and also allowing businesses to thrive on the other.

Where this gets hard is the regulatory combinatorics. A business that wants to work in different countries has to think about, or sometimes more than, regulators.

So for us, we think about that deep partnership with regulators. If you look at the UK and Singapore, there’s some pretty interesting things happening in both of those places. They’re really taken it upon themselves to try to allow for burgeoning fintech innovation by creating sandboxes where you as a company can experiment with new business models without getting licensed. And so we’re hoping to see more and more of that.

Jay:  Speaking of regulatory, I know that no talk about moving money at internet speed and scale would be complete if we didn’t talk about, a little bit at least, about cryptocurrencies. Stripe was obviously one of the first, early movers, adopters of accepting Bitcoin as a form of payment. You guys then took a step back and, for whatever reason, decided that perhaps it wasn’t the right timing for that. How are you guys, as a company, positioned with cryptocurrency? You obviously have also made the news as being, with Facebook’s Libra, as being one of the foundation members. What are your views in general on cryptocurrencies?

Will:  You mentioned that we were early on Bitcoin. And that’s right. We were actually, I think, the first major payments player to allow for Bitcoin acceptance. Ironically, I think we were also the first to deprecate it. We did it actually at a point in the Bitcoin stock chart where it was really peaking.

The reason we did that is just because we spend so much time talking to our users. And even though there’s a lot of promise in cryptocurrencies, for Bitcoin itself, it’s not working as a payment instrument. And our users were not using it as a payment instrument and finding, actually, that it was expensive and risky to accept it.

As I think about one of the most important points that drives Stripe, it is just those conversations with our users. If there’s one thing that I would say Stripe does well, it’s that we spend a lot of time with our users. We are a very creative company, but at the same time, the beneficiaries of a business model that doesn’t require a lot of creativity because we’re just bombarded by users asking for things all the time. We’re still waiting to see the want on the cryptocurrency front, but we’re tracking it pretty closely.

Jay:  And do you think that cryptocurrencies have a good chance in the near future — say, two to five years — of actually disrupting the payments environment that we see? Like you said, Bitcoin, as a payment tool, is very inefficient. Transaction times take forever, blah, blah, blah. It might be secure, and it might be the first mover within cryptocurrencies, but as a payment method, it’s horrible. Do you think that in the next two to five years that there will actually be a cryptocurrency that could be used on a daily basis for payments?

Will:  It’s hard to say. We think a lot about, in developing products, Tony Ulwick framework of “Jobs-to-be-Done”. For our users, what are they trying to accomplish? For us, we think about multiple levels of that framework, multiple abstraction levels. The base layer, you just want to move money. They want to accept money globally and pay it out. At first blush, cryptocurrency seems like it could play into that.

And then one level up, we think about the real jobs that our users are trying to do, which is often to build a global marketplace or platform or build a SaaS business or things like that. And it’s not clear there’s a whole lot that cryptocurrency could contribute to. So we’ll see. But, again, we’re tracking it closely.

Jay:  25 years since the onset of the internet, and we still have not scratched the surface of the true internet economy. Stripe is one of the companies trying to help bridge this gap. Will, where do you think the future lies for us? We’re sitting here at one of the biggest tech conferences in Asia. You mentioned that Asia has explosive growth. It’s a focus area for you guys with an engineering hub. How do you think that our future here in Asia will directly change in the near future? How can Stripe help us? How can we build a global economy in Asia, from Asia?

Will:  Before I joined Stripe, I was a venture capitalist, and I used to joke that I really only had one sound investment thesis, which is that one day the internet would be a big deal. And it was a joke because the internet is already self-evidently a very big deal. $1.7 trillion in internet GDP this year. 2019 is the first year in which the internet was a top ten global economy by GDP.

 But at the same time, if you think about it, we’ve barely scratched the surface. Only about 8% of commerce is online.

If you think about phases of the internet, you had the first phase that was really about organizing information. The second phase was about social connections — companies like Facebook, WhatsApp, WeChat, Tencent. 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.

And so I would say we’ll likely see a migration away from dollars on the internet being spent on ads and towards dollars on the internet actually being spent on goods and services, on the one hand.

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. It will continue to run on more and more technology-enabled rails. And all of the experiences on the internet won’t be offline experiences ported online but actually net-new experiences that couldn’t have existed without the internet.

Jay:  $20 billion valuation. I know you guys are very head down and focused on just building a great company. There’s a lot of buzz because a lot of companies are coming to public markets. One thing that I know that you’ve said in the past is you’re just focused on building a really good company and solving this problem for the world. What does Stripe look like five years from now? Are there any things that you’re excited about when you look at the next two to five years of Stripe’s growth?

Will:  I guess two things. We will continue to double down and invest on two business models that we see as being canonical to the internet, One being predicated on marketplace dynamics. This is, as I mentioned before, leveraging the convening and coordinating power of the internet to let buyers and sellers who wouldn’t otherwise ever find each other transact. And the other is on recurring revenue — software as a service, consumer subscriptions, things like that. These are the types of businesses that couldn’t have existed in the same way offline.

The second, I’d say, is just more and more investment in globalization — globalization on a couple of fronts. One is making our products available in more countries and markets around the world. Two is lowering the barrier to entry into the global internet economy to make geography less of a factor in global internet entrepreneurship so that it’s not just the San Franciscos, the Beijings, the Hong Kongs that are bastians of internet entrepreneurship but that you see companies coming up from all over the world.

Jay:  Fantastic. Will, thanks so much for sharing some time with us. We’re excited to see Stripe’s growth in the region.

 Will:  Thanks so much.