Does anyone know enough about Stripe's product lines to comment on what the following paragraph means?
"My view on Stripe’s business prior to joining was “Stripe is basically a B2B SaaS company with extremely reliable capture of upside when users succeed.” I believe that substantially underappreciates the actual business. Large portions of Stripe’s business add another loop on top of the B2B SaaS loop, where Stripe is effectively indexing on its ability to grow the count and success of customers who are themselves structurally equivalent to B2B SaaS companies."
The "reliable capture of upside when users succeed" seems to be referring to the fees charged by Stripe. More revenue for the user means more revenue for Stripe as well. I don't know what the "effectively indexing" sentence refers to. Is there a network effect at play here, where being on Stripe encourages a user's customers and suppliers to also be on Stripe? Or is there a product offering that somehow creates that effect?
And then there's another loop mentioned later, which is presumably a product in development, and not something anyone involved with can comment on. (But I would love to hear about it if you could.)
If you follow Patrick on Twitter you get used to this - even to the point where I didn’t realize this was from his blog but intuited it was a quote from him just by the style of writing.
I believe what he’s getting at here is close to the following: Stripe isn’t just providing payment (Reliable capture on success, aka Stripe gets money on revenue generation), but is also trying to provide tools to make the B2B model easier to deploy, based on their experience with these business models. Stripe Atlas or Sigma are probably a good example of those types of services - they’re trying to use their payments play to also push for selling you Business Intelligence or Legal.
Indexing is just taking knowledge and deploying it to make something faster, like a database index (I know I want to join on this column, so I index it).
I am familiar with and very much enjoy patio11's writing style. I enjoyed his "An update on a pre-registered result..." to the extent that I was actually laughing out loud while reading it, which was very much not the intent of the writing.
I now see two potential explanations. The first is Atlas, where Stripe enables the ecosystem of B2B SaaS companies to expand rapidly. The other, mentioned in a sibling to your comment, is marketplaces (Connect), where Stripe collects revenue from a number of operating payment networks. In both cases, Stripe is a B2B SaaS which serves other SaaS companies, which allows growth in a way that being a B2B SaaS that serves traditional business doesn't.
I think it's the kind of mix of inside-baseball and jargon that makes it pretty much impossible to decode for those not involved in creating annual reports and executive summaries.
"My view on Stripe’s business prior to joining was “Stripe is basically a B2B SaaS company with extremely reliable capture of upside when users succeed.” I believe that substantially underappreciates the actual business. Large portions of Stripe’s business add another loop on top of the B2B SaaS loop, where Stripe is effectively indexing on its ability to grow the count and success of customers who are themselves structurally equivalent to B2B SaaS companies."
The "reliable capture of upside when users succeed" seems to be referring to the fees charged by Stripe. More revenue for the user means more revenue for Stripe as well. I don't know what the "effectively indexing" sentence refers to. Is there a network effect at play here, where being on Stripe encourages a user's customers and suppliers to also be on Stripe? Or is there a product offering that somehow creates that effect?
And then there's another loop mentioned later, which is presumably a product in development, and not something anyone involved with can comment on. (But I would love to hear about it if you could.)