Please enjoy this transcript of my interview with Patrick Collison (@patrickc), chief executive officer and co-founder of Stripe, a technology company that builds economic infrastructure for the internet and powers millions of online businesses around the world. It was transcribed and therefore might contain a few typos. With some episodes lasting 2+ hours, it’s difficult to catch some minor errors. Enjoy!
DUE TO SOME HEADACHES IN THE PAST, PLEASE NOTE LEGAL CONDITIONS:
Tim Ferriss owns the copyright in and to all content in and transcripts of The Tim Ferriss Show podcast, with all rights reserved, as well as his right of publicity.
WHAT YOU’RE WELCOME TO DO:
You are welcome to share the below transcript (up to 500 words but not more) in media articles (e.g., The New York Times, LA Times, The Guardian), on your personal website, in a non-commercial article or blog post (e.g., Medium), and/or on a personal social media account for non-commercial purposes, provided that you include attribution to “The Tim Ferriss Show” and link back to the tim.blog/podcast URL. For the sake of clarity, media outlets with advertising models are permitted to use excerpts from the transcript per the above.
WHAT IS NOT ALLOWED:
No one is authorized to copy any portion of the podcast content or use Tim Ferriss’ name, image or likeness for any commercial purpose or use, including without limitation inclusion in any books, e-books, book summaries or synopses, or on a commercial website or social media site (e.g., Facebook, Twitter, Instagram, etc.) that offers or promotes your or another’s products or services. For the sake of clarity, media outlets are permitted to use photos of Tim Ferriss from the media room on tim.blog or (obviously) license photos of Tim Ferriss from Getty Images, etc.
Tim Ferriss: Patrick, welcome to the show.
Patrick Collison: Thank you so much for having me.
Tim Ferriss: I am thrilled to connect, to finally have this long-form conversation. And I thought a good place to start might be by quoting from a text exchange or rather one of the first texts that I got from our mutual friend Chris Sacca who’s also been on the podcast, for those that don’t know him. An extremely adept investor and all around hilarious guy. He’s managed –
Patrick Collison: He’s a real character.
Tim Ferriss: He’s a real character. He’s managed to make $1 or $2 or however many billions of dollars which is amazing because I got to see him from the early days when – you probably first met him maybe a year or two later. In any case, Chris is a character. And he very rarely makes introductions. He very rarely proposes introductions. So I pay attention when he does. And he sent me as context – of course, I was familiar with Stripe. I had heard your name before. We had, I think, even exchanged potentially a couple of DMs on Twitter. But he said – and I’m going to edit here for length a little bit, but “Patrick is quite literally one of the smartest people I’ve ever known. Like, he puts Larry Page on his heels smart. I don’t know anyone who has 1) read more books and 2) has the near photographic memory for what he has read. His thoughts are provocative and challenge the status quo. His success is no accident.”
And then you can fact check this when we get into more of a conversation here, but, “Plus, his origin story is great, as I recall: Grew up in rural Ireland. Took his first communion money and bought a computer. Created his own operating system while coding over a dial-up line. Paul Graham” – for those people who don’t know the name, basically the Yoda of something called Y Combinator; come back to that – “Paul Graham noticed him and invited him to the US. I met him when he was 15 and PG” – that’s Paul Graham – “brought him by the Google offices. Pretty sure he dropped out of Harvard or MIT, etc., etc. He’s also a pilot who, when Obama made the trip to Cuba, invited along a few top entrepreneurs like the Airbnb founders. Patrick said he would meet them there and rented a small plane to fly himself from Florida.” Okay. Pause.
Now Chris and I were also exchanging text messages earlier today because I wanted to ask his permission to read that. And there are two more things I’ll add as background color. And then we can get amongst it. So the first, he says, “Quick story. Auctomatic” – and we can get into that. But this is one of your previous companies – “was a front-end on eBay that allowed sellers to upload a bunch of products at once and scale their operations. One night, someone from the Netherlands wrote them an email that Auctomatic didn’t support Dutch. Literally, in the middle of the night, they wrote back something like 15 or 30 minutes later saying, ‘It does now.'” And then this is a very Sacca-esque expression. “Fucking legends.” And then he said, “Also when we sold their first company, I held a little closing celebration at that bar below my house” – his then-place – “District.”
This is in San Francisco. Well, they were both underage. But Patrick’s brother John got negged from the bar. Literally could not get into his own celebration for selling a company, becoming a millionaire. I will never forget that moment. It crystalized ‘What’s happening out here is different.’ There is no hierarchy predicated on seniority. Smart young people who bust their asses don’t have to ‘work their way up.’” So that is all by means of introduction.
Patrick Collison: Yeah. I think we should probably just end the podcast right now because I don’t think there’s any possible way that any human alive today or who’s ever existed in human history could possibly live up to that.
Tim Ferriss: Yeah. I was going to say, “No pressure. Nothing to live up to now.” But I think we can start with very comfortable ground. And that is books. Let’s talk about books. You have many books. I want to say 600 or more in the recommended reading section on your website. Maybe I’m getting it wrong. Maybe it’s been changed. And you’ve categorized them. You have some in ‘above average.’ You have others as labeled ‘particularly great.’ And then it was ranged – this is quoting from a Wired article in the UK. But they range from imperialism to engineering, democracy, on, and on, and on. What makes a book particularly great? And which of those do you end up recommending the most or gifting the most to other people?
Patrick Collison: Well, I find personally, actually, that it really matters a lot when I read the book and the frame of mind that I’m in at the time when I stumble across it. And often, I’ll start a book at some point and maybe revisit it months or, in some cases, even years later and find that it has a completely renewed resonance or significance or something. And so I think there’s a – Chris and Marc Andreessen and others talk about this idea. And, of course, many people at this point talk about product market fit and founder market fit. I think with books, there’s really something around reader book fit and the particulars of that moment.
And so just by way of example, I’ve been thinking a whole lot of late about the importance of cultural capital and how it is that people choose what to do and to aspire to and focus on and try to make happen in the world and the degree to which they’re willing to take risks and the importance of visions and the importance of mentors and people to look up to and all that. Anyway, and specifically the idea that perhaps in the first half of the 20th century or maybe the first two-thirds of the 20th century, there were lots of examples of that. I’m not sure whether this is the case or not, but maybe, perhaps, there are fewer of those today. Anyway, thinking about this of late – and, of course, I’m not the first to point this out or raise this as an issue, but I stumbled upon just a couple of days ago a book published by – I’m probably going to get the name wrong. But there’s a center at ASU.
It’s the Center for Science and Possibility or something like that. I’m pretty sure I’m getting that name wrong. But it’s along those lines [Ed. Note: Center for Science and the Imagination]. And they actually published a book of science fiction written by a whole host of authors with a forward from Neal Stephenson about exactly this idea, the importance of optimistic visions and science fiction as flagging points on the horizon that might be interesting directions to try to panel towards. So anyway, I think that for books, this kind of matching of your mindset and what’s important to you at the particular moment with the content, itself, really matters. I think a corollary of that is that it’s actually valuable to – or I actually find it useful to buy a lot of books that seem interesting and high quality but before I’m necessarily ready to read them at that moment. And maybe I’ll read the beginning or a couple of chapters or something but not really commit to finishing it.
But I’ll leave it out around the house. There are books on the bookshelves. There are books on the kitchen table. There are books beside the couch. There are books in my bedroom. There are usually books on my bed and so on. And it’s in your mental landscape. And I often find that six months later or 18 months later, something happens. You’re reminded of something. And you realize, “Oh, man. I really should get back to whatever book it is.” The other thing I’d say is – well, what makes a good book? Go ahead.
Tim Ferriss: I was just going to say if it’s helpful, I was going to ask about The Dream Machine. And maybe that illustrates how you vet books or hold onto books that are particularly valuable because at any given point in time, even if you have six to eight books around your houses, there are hundreds of thousands of books published every year. So there’s a selection challenge.
Patrick Collison: Yes. Okay. So first off, I think you should mostly ignore the books that are published every year and take advantage of the fact that quite a lot of books have been published up to 10 years ago. But the books published up to 10 years ago, people have had a lot of time to filter through them and try to select the real gems there. And of course, there are other false negatives. There are a lot of great books that just never, for whatever reason, got the attention they deserved. Or maybe that they don’t have the salience that they ought to have for you. But I really think people should be much more biased towards older books than they are. I think The Dream Machine is a good example of this. And I think there are two things that stand out in The Dream Machine. The first is Mitchell Waldrop, the author, he really spent the ti – well, I guess I should describe what it is.
It is a book about the history – well, it is nominally, a biography of J. C. R. Licklider. And many people were responsible for the creation of the internet. But I think Licklider has more claim than any other single person to being the individual causally responsible for its creation. He funded a lot of the early researchers. He tried to bring the community together. And he really instigated much of the movement that led to ARPANET and the internet and so on. And it’s this amazing book about, obviously, one of the most important inventions in the history of humanity. And Mitchell Waldrop spent the time to real – years to really understand in depth not just the specific sequence of events that led to this happening but the milieu and intellectual environment and thinking and landscape that it all came from.
And so the book starts way before Licklider was doing anything because there were all these different fields and disciplines and strains of thinking that Licklider built on. I think it’s pretty rare that an author either takes the time or has the time to really go deep in that manner. And it’s striking that if you look at how The Dream Machine came to be, he was funded by a grant. As I recall, it was the Sloan Foundation. I could be wrong on that, but I believe it was the Sloan Foundation. They thought this was, obviously, a super important period in history. But Waldrop was not toiling under the clock to get a book out by Christmas. He was really trying to capture an important series of events in the arc of technology. So that’s really what stands out about that book.
Tim Ferriss: How did you come across that book? Because was it in print or out of print at the time that you came across it?
Patrick Collison: It was out of print. There were a couple of copies on Amazon. After I finished it, I was so excited about it that I went and bought a whole bunch of them to give away to people at Stripe, to give away to my friends and fairly quickly, we exhausted Amazon’s pretty limited supply. I think I first heard about it from I think some combination of Bret Victor and Alan Kay. Alan Kay many of your listeners will already know about. For anyone who doesn’t, he was a researcher who worked at – he was best known for working at Xerox PARC, which was this amazing industrial research lab that played a formative role in the creation of the GUI, the graphical computer interface and ethernet, one of the main networking technologies, and object-oriented programing, which is the main programming paradigm that’s used today. And so they were just really critical in the history of where we consider modern technology, modern software.
Anyway, Alan Kay worked there and was one of the leading researchers there. And then Bret Victor is one of the most interesting researchers, software creatives working today. And I remember Alan saying that The Dream Machine is semi-unique among computer history and technology history books and that really gets it right. And obviously, we’re a pretty young field. And so there hasn’t been a whole lot of research and deep, scholarly scrutiny, at least to the extent that there might be for math or physics or something. But this book really stood out. And the technology industry is not an industry that spends a lot of time looking to its past in a way that I think is really both a strength and a weakness in that people are always trying ideas that have failed tons of times before. And they’re oblivious to the fact that they’ve failed tons of times before.
And that really is a good thing because sometimes the fact that it has failed five times before does not mean that it’s going to fail the sixth time. But it can, of course, also, in some ways be a weakness where we don’t build on ideas that precede us. Alan Kay’s line about this is computer science is a kind of pop culture where it’s Brownian motion rather than really building layer by layer. Anyway, in a broader culture, I think The Dream Machine is an outlier.
Tim Ferriss: And you mentioned Alan. I will just mention a quote that perhaps people have heard, which is often misattributed. But it is, I think, correctly attributed to Alan, which is, “The best way to predict the future is to invent it.” That may be a quote that people recognize but perhaps not in association with the name.
Patrick Collison: Yeah. Alan, I would say is quite widely recognized as a genius. But despite that, I think he is still underrated. I think he will be even more highly regarded in 50 years or in 100 years than he is today.
Tim Ferriss: You’re a young guy. What is your age currently?
Patrick Collison: I’m 30.
Tim Ferriss: 30. Wow. Time to order a walker on Amazon Prime. You are a student of history. You mention something in relation to assessing books that has popped up in my homework or, I should say, research rather for this conversation. And that is that perhaps one shouldn’t overweight with a recency bias the books published in the last year. You should give books a chance to fail or persist in a sense. And feel free to correct me if I’m getting this wrong. But I’ve also read that you’ve talked about how it is risky for people to emulate the companies du jour, those startups or companies around them that are contemporaries that are doing well and that it seems like you have made more of a study of the greats in the earlier days of the Valley or, by extension, companies like Microsoft where the outcomes are more known. Could you talk about that a bit and perhaps some of the things that you’ve gleaned or any lessons that have stuck with you?
And I’d love to dig into perhaps some of the conclusions you came to, even if temporarily after studying these greats. And one example which may or may not be a good example but what came up in doing some reading for this is that you observed that Google, Facebook, Amazon were created with conventional org charts in some respects. So you questioned the value – please correct me or elaborate on this – the value of innovating in that particular capacity because there would cer – and now, I’m laying on my interpretation of that which is there are potential unknown risks in doing so and questionable upside in throwing more unknown variables into something like that versus other places where you could focus. So could you maybe expand on that and then share any other conclusions or lessons that you came to?
Patrick Collison: Well, I think the general idea here behind this is I think people often conflate the question of what it would be good to see others do versus what you should do yourself. And what I specifically mean is people have tried a lot of different kinds of organizational structures and methodologies over time, right? And of course, while, in broad strokes, many things have remained the same in terms of maybe some of the characteristics required for leadership or the importance or that which makes a human satisfied in their work around having the opportunity to have autonomy and to build mastery and having a mission they believe in and so on. So there are lots of things that remain the same. There has been some evolution in that organizations – Google, today, say does not look especially like maybe IBM of 1950. There are parallels but very material differences.
However, I think that most of the experiments have failed. Most efforts to do something that’s substantially different to the best practice of the day, most of those efforts fail. And so I think when you’re designing a particular organization, doing something that truly might kill it is just a pretty risky thing to do. And evidently, the way Google, Facebook, Microsoft, and others are organized, Amazon, what have you, I’m certain it’s not perfect. I’m certain that not only can you do better, but you can do substantially better. I really believe that. But at the same time, it’s empirically adequate to be Google, Facebook, Apple, or Amazon.
And I think doing better is just really pretty difficult. And so I actually love the fact that people are experimenting here. The rise of remote organizations that have no physical headquarters or attempts to have – Buffer has been trying this radical transparency down to compensation. Some of our organizations like Medium and Zappos tried or are trying holacracy. And so I love the fact that all these experiments are happening. And –
Tim Ferriss: Can you define holacracy for a second?
Patrick Collison: Well, I don’t deeply understand it. But I think it is – as I understand it, the core idea is having differing decision-making bodies, like groups of people that are responsible for major areas of the company rather than having a more traditional hierarchy. Again, this is my superficial understanding. But so perhaps you might have some set of people who are responsible for making compensation decisions, some other set of people who are responsible for deciding what the product strategy should be for next year, and some other set of people who are responsible for figuring out how the office should be decorated. But those sets of people don’t need to map onto some traditional hierarchy. They can be partly overlapping or bigger or smaller or whatever.
And yeah. For anyone who describes that, I don’t think that’s a priori a ludicrous idea. Maybe that’ll work. But I think the bias should be that for any radical departure from the prevailing status quo, it’s probably not going to work. I think there’s probably a 90 percent chance, maybe higher that any meaningful deviation is a bad idea. And so again, to return to what I was getting at, at the beginning, I think we should celebrate the fact that all these experiments are happening and should really cheer them on and should really hope that they succeed. And we, ourselves, should choose maybe some small number of experiments that we really believe in to engage in. But I think for these really high importance, really hard to change trapdoor decisions like what kind of organizational structure you’re going to have, I think you actually want to bias towards being relatively conservative.
Tim Ferriss: Yeah. You might be supportive of monkeys being shot into space. But you don’t necessarily want to be one of the first 10 –
Patrick Collison: No. That’s exactly right. But I really think – one of the strangest things to me in the world as I look out is that people don’t celebrate this experimentation enough. If it doesn’t seem to them like the right thing to do, they act offended by it. Or it seems to have some kind of – there’s some kind of emotional response to it whereas I think – at least the response I try to cultivate in myself is: “I think that’s a bad idea. It does not make sense, given my model of the world. And I’m delighted it’s happening. That’s so great!
And if it fails, well, that’s unfortunate. And if it succeeds, we all get to learn something.” That’s what’s so great about the transmission of knowledge that if it works in only one particular, small instance, everyone gets to benefit from it. That’s so cool. And yet, when people try strange things that don’t match our, again, preexisting comprehensions, there’s some combination of mockery or dismissiveness or, again, the emotional objection, whereas I really think we should be encouraging and celebrating them. And the weirder the effort is, the more they deserve our support.
Tim Ferriss: So I want to talk about maybe some of the things you did differently, but not only what you did differently because that’s, in some respects, a causal factor, but in some respects a downstream effect of thinking differently or seeing things differently. So what did you guys know that other people didn’t? Because I’ve heard multiple people comment on the early conception of Stripe or considering entering a crowded market with ton of existing incumbents with regulatory and institutional barriers to entry, all of these types of factors. Why did you decide to pursue that? What did you see that other people did not see in that case?
Patrick Collison: Well, I think there are two different kinds of knowing. There’s conscious, explicit knowing where you see that there’s a prevailing belief or something, and you understand why it’s wrong, and you have some kind of proprietary insight that everyone else doesn’t have. I think there’s another kind of “knowing” which is just you have a belief or a model of the world and you don’t even realize that it’s different to others. It’s some deeply internalized thing that just for whatever circumstantial reasons you happen to have ended up with. And I think for us, it actually wasn’t so much that we had, in the beginning, this comprehensive, deep understanding of the space and realized how everyone else was mistaken. We just had a particular perspective because of where we came from and how we got started that – and we were lucky. We turned out that model we had, and that outlook matched the world at that time.
But I think it’s very important that we don’t drink our own Kool-Aid here and overread into our supposed insight. I really think it was just a lot of circumstance and good fortune. But I would say that particular things that are different about Stripe and our outlook were we just didn’t think that the regulatory and partnership/banking barriers were actually that bad. They sound intimidating. And obviously, you have to do a lot of work there that maybe lots of other software companies don’t have to do, but it’s fundamentally feasible. Ultimately, regulators and banks and so on are comprised of good people who want to do the right thing and may speak a different language or whatever but are – they’re reasonable. And I guess the other thing is we really had this mindset because where we came from, the developers and makers and software were just going to continue to become increasingly important.
And it’s really amazing where when we started out, our idea was that developers would just – we would build a good product, and developers would start using it, and that would be the story. And we didn’t even know that was such a stupid distribution strategy and go-to-market mechanism. We didn’t even know how much enterprise marketing and enterprise sales motion and all the rest we were skipping over. We just had this very naïve understanding of the world. However, we were lucky where the world really started to change around 2010-2011, where companies around the world and especially in the US and Europe really got the memo, like big, traditional companies that they would have to take advantage of what software was making possible and really transform themselves if they wanted to survive and prosper. And so fast-forward five or six years later.
Even the more traditional, stodgier companies that would have needed this super complex enterprise field team to engage with, they were actually now starting to listen to their own developers. And when the CTO said, “Hey, I really think we should be using this much more straightforward or much more powerful technology,” unlike a decade before, they were actually being listened to. And so again, this isn’t a thing we knew in the way that we could have argued for it in 2010, but it was a thing was somehow in our bones. And again, we were just lucky where we started right around when the world started to transform in this regard. And actually, we did this survey earlier this year where we surveyed a whole bunch of – I don’t want to say traditional, but not software companies.
We surveyed companies fairly broadly across multiple industries. And we just asked them what’s holding them back. And that’s a very imperfect methodology, of course, because it’s hard to know what the candidate answers there should be. And maybe those questions are – do they all interpret it the same way? And so on. But the very high-level thing that came back was that companies across the board report availability of software engineers and just ability to do things with software as being as big or even bigger a constraint on their progress as access to capital. And that’s just such an amazing fact in that economics for its history, basically, has been a science of, in some sense, access to and distribution of capital.
And we just had this moment of transformation where on some level, you can exchange capital for software, talent, and output, and so on. But it’s actually really hard to do. And I think companies globally are really struggling with figuring out how to make that happen. We just had the good fortune of getting started right when that came to be the case.
Tim Ferriss: So there are definitely – I shouldn’t say synchronicities, but fortuitous timing aspects to it. And I think that, of course, Lady Fortune, good luck or bad luck, is always a factor. But it’s, in a case like this, necessary and not sufficient, right? There are certain things within your control, assuming we don’t get into a really long, confusing discussion about free will. Let’s just assume there are certain things that depend on you making very specific decisions. There are these forks in the road. And I’d love to talk about some of the things that you feel like you did right or small things that turned into big things. And I want to read just a very brief paragraph from the Yoda mentioned earlier, Paul Graham.
And for people who are interested in learning more about Y Combinator, we can talk about it, but it’s – and this is going to be vastly simplified. But for people who have never heard this before, Y Combinator, often abbreviated to YC, is the SEAL Team Six Harvard of let’s just call it startup incubators, of sorts. They accept a class. It is a very small percentage. I want to say single-digits at this point. It would have to be, in terms of the number of applicants. And there are many, many well-known companies that have come out of Y Combinator. And Paul has many fantastic essays online which people should read.
Patrick Collison: YC is one of the most amazing inventions of the past 20 years. And I think PG’s essays are still a goldmine that, like Alan Kay, I think are – people know they’re great. But I think they’re even better than people appreciate.
Tim Ferriss: Oh, for sure. And many of them – I’ve also read his book. Many of them are – they are not timely in the best possible sense. They’re based on first principles. And an example of that – I always mess up the headline, but I think it’s the maker’s schedule versus the manager’s schedule, something along those lines. People can find it. I’ll put it in the show notes. But this particular essay talks a bit about Stripe. And it says, “Stripe is one of the most successful startups we’ve funded. And the problem they solved was an urgent one. If anyone would have sat back and waited for users or could have sat back and waited for users, it was Stripe. But in fact, they’re famous within YC for aggressive early user acquisition. Startups building things for other startups have a big pool of potential users in the other companies we’ve funded. And none took better advantage of it than Stripe.
At YC, we use the term, ‘Collison installation’ for the technique they invented. More diffident founders ask, ‘Will you try our beta?’” And for people who don’t know, that terminology just means effectively, a rough draft of a product. “‘Will you try our beta?’ And if the answer is, ‘Yes,’ they say, ‘Great. We’ll send you a link.’ But the Collison brothers weren’t going to wait. When anyone agreed to try Stripe, they’d say, ‘Right then. Give me your laptop,’ and set them up on the spot.” So that seems like a small thing, but it doesn’t strike me that – if that’s the beginning of certain types of snowballs in user acquisition, that is a really important or could be a really important differentiator. So what are some of – feel free to take this in any direction, but some of the other things that you guys got right? And I do remember, even in Silicon Valley – which, of course, can be an echo chamber of sorts.
But there was a lot of talk even at the periphery of my circles – and I am non-technical. I am not a developer – about how easy Stripe was to implement, right? Seven lines of code or X number of lines of code, and you’re set up. And that, I’m sure, on some level was a very conscious decision and not only in terms of product but also in terms of positioning. So can you talk about some of the early decisions that, in retrospect, were really important?
Patrick Collison: So I think there are two that really jump out to me where I think they were actually somewhat deliberate. Well, I’ll give two, and maybe I’ll think of more. So one is we had grown up reading Slashdot, this early tech news website when it was crowdsourced, and Hacker News and Twitter and blogs and all these kinds of services. And I guess we just had a belief that how people found out about things in the world had changed.
And in particular, the market was getting more efficient. And by efficient, I mean that it was becoming more likely that people would come to discover the “correct thing” that maybe 30 years ago or something because there were much slower or fewer distribution channels, that who won and what got used would be determined more by marketing budgets or by sales tax or whatever but that there was a new kind of transparency and efficacy and information dissemination that the internet now made possible that shifted the way that a product could really get adopted. And so just very concretely, our sales and marketing strategy for a very long time was writing blog posts that we just thought were good and interesting, or at least, we hoped were and building a good product and hoping that people would tell others about it. And I really don’t think that that would have worked 10 years previously.
It was the internet had changed, but we just made a very deliberate bet on these superior distribution channels. And I think that actually really helped us in two big ways. One is it’s obviously cheaper. And so you look at a lot of other companies, especially companies selling to businesses, and they spend vast, gargantuan amounts of money on their sales and marketing strategies. And so early on, we didn’t have to do that. And so it was transformatively impactful in that sense. Maybe if we’d had to spend a lot on getting started, it perhaps would have been – that could have been a severe enough barrier that we wouldn’t have gotten over it at all, the company would never have happened. So that’s the first. The second is –
Tim Ferriss: Can I pause for one second?
Patrick Collison: Yeah, sure.
Tim Ferriss: Do you recall any of the blog posts if you were to do an 80/20 analysis and look at those that really moved the needle? Do you recall any of the topics or just your basic approach?
Patrick Collison: Well, I remember a guy who worked at Stripe and who still works at Stripe. His name is Evan. He wrote a blog post about how to debug Python, which is a programing language, with GDB, which is a debugger. It didn’t really have much to do with Stripe, but it actually was a really good blog post. And this is probably back in 2012. And that got a whole bunch of traffic. And as a consequence, people found out about Stripe and maybe realized that we knew something about what we were talking about from a technical standpoint. And it moved the needle for us back at a time where really, nobody had heard of us.
Tim Ferriss: It’s also, if I may – I’m caffeinated enough now to feel the need to jump in and commentate. But it’s also a really good example of an editorial honeypot that will attract the types of people who are technically probably in positions too given that point in time that you discussed earlier where CEOs are listening more to CTOs, and CTOs are listening to the actual, on the frontline coders. It’s a very smart way of talking around the product in the sense that a lot of those technical folks, in my experience, are also semi-allergic or very highly allergic to what they perceive as anything salesy. So you’re able to bring them into the fold without directly, explicitly selling anything.
Patrick Collison: Yes. Well, this actually brings me to the second thing that I was going to mention in terms of the other helpful consequence of marketing ourselves this way which is it actually created better incentives for us because if you think about more traditional marketing – and by the way, to be clear, I’m not dismissing in any way traditional sales and marketing. Stripe has salespeople and marketing people. And they’re immensely important in the organization we’re now building today. And so I’m specifically talking about strategies to get started in the early days and to get some initial traction.
Anyway, that said, the super valuable thing about pursuing these non-traditional channels is if you think about a traditional marketing organization and what it’s – or traditional marketing in general and what the incentives are – the incentives are to talk up the product or to pre-announce things ahead of when they’re actually ready because if you’re talking at people and showing them these fancy presentations or whatever but they’re not actually using the product directly, if they find out a year later that it sucks, well, that’s fine. Or at least it’s fine in the short-term because you’ve already got the revenue for the sale or something, whereas if you have to compete on the merits of the product and just rely on people being honest about how well it works or doesn’t, that forces you to just build a product development organization that can compete on merits.
And so it might be harder to get that initial traction, but if you can get there, you actually really have an upper hand relative to more traditionally incentivized companies because they’ve probably gotten a bit lazy and a bit ossified and just a bit less competitive on this axis. And once you can make the battle about the quality of your product and the quality of your product development, if you can get the battlefield to be on that axis, you really have a huge advantage. And our experience was the incumbents just couldn’t react. And they realized that Stripe was getting some traction and starting to get some mindshare and developers and startups were starting to use us. And what’s really amazing to me is how little happened. And I think it’s not because – obviously, for a while, they just dismissed us. But even after they stopped dismissing us, you can’t just click your fingers and be like, “Okay, now we’re going to start creating good products.”
It’s such a deep cultural and organizational thing that it’s very difficult for competitors or potential competitors to shift there, whereas if you just have a better marketing campaign, that’s super easy to copy. Anyone else can buy a competing billboard or pay more for the Google Ads or whatever. And so again, we didn’t realize all this in advance. But I think that ended up really helping us.
Tim Ferriss: And I want to underscore something you just mentioned briefly, which is Google Ads. Well, two things. Number one is that if I look back at however many, at this point, 70-plus startups in my own investment experience, the vast majority of overperformers focused almost to the exclusion of PR and marketing on product in the early days. And number two is if I look at the bottom-performing decile of companies, they almost all got very distracted by PR and marketing, particularly in the first year or two, generally first year of existence, especially if they were blessed – in other words, cursed – with a lot of high praise from outlets in one or two pieces. It’s very seductive as a siren song.
Patrick Collison: Absolutely.
Tim Ferriss: And the last thing I wanted to say just to underscore something you mentioned, which is really important, is if your customer acquisition is predicated on paid acquisition, that makes you just a sitting duck for incumbents who have larger budgets. And they can just decide to bleed chips for a period of time until you run out of chips. Yeah. It’s really, really important. So I’m glad you mentioned it.
Patrick Collison: There’s always a seductive, psychological temptation where if something isn’t growing to tell yourself that it’s because, “Well, I haven’t invested enough in distribution.” It’s harder to come to realize or to tell yourself that, “Well, maybe our baby is just a bit too ugly.” And so I think people are just very psychologically biased towards blaming anything about growth on things that sound like sales and marketing. And then related to what you just said, I think young companies – well, one of the just really strange facts about the world – and I don’t fully understand why this is the case – is how hard it is for organizations to build good software. And I know that sounds strange in that lots of organizations build some software. But it is just really weird. If you think about what a really good website or iOS application or whatever is and feels like, it’s really strange.
It’s not easy to build a really good website or iOS app or whatever. But it’s not rocket science. And given that it’s not rocket science, why are there so few of them? Just think of any big, major company and think of their website or app? It’s probably pretty bad. It’s janky. It looks old. The animations don’t really work right. It’s laggy. All this stuff. But that’s weird. They probably have a nice building, a nice headquarters. There are many things they can decide to do and just do it pretty competently. They can turn their capital advantage into an advantage in some other area. If they want to have a great fleet of cars, they can very reliably turn capital into a great fleet of cars. But for some reason, they can’t seem to turn – and, in fact, they can probably even turn capital into a cool advertising campaign. There are enough good agencies. But for whatever reason, they can’t turn capital into good software.
And it would be immensely valuable for them if they could. But they can’t. Or at least, they don’t. And I don’t think it’s for lack of trying or lack of realizing this. And so I think actually, small companies don’t realize how much of an upper hand they have here where if they can create a product that is so much better than the status quo that they start to get organic traction, once you attach a real sales and marketing engine to that, it’s going to be really freaking hard for a big company to effectively compete because, again, this organizational transformation into being good at software is just so profoundly hard.
Tim Ferriss: Another place that I’ve seen a lot of would-be entrepreneurs or entrepreneurs spend a lot of time: on company name and brand. Okay. So I was joking with Chris Sacca earlier, via text. And I was just saying I’m really impressed with the phenomenal outcomes and very rocky beginnings with difficult names that you guys have had with companies. So you have Auctomatic, which I’m sure was not always spelled correctly by people.
Patrick Collison: Not uniformly, no.
Tim Ferriss: And Stripe. Could you just give us a brief description of the original name of what would later become Stripe and just walk us through some early iterations? Because I want –
Patrick Collison: Sure.
Tim Ferriss: And what I’m hoping to do here – and I don’t want to make this too leading of an introduction to what you’re going to say – is that the future of your company is probably not going to hinge entirely on the first name that you give it is where I’m trying to go with this. So maybe you could just tell a bit of the story.
Interviewee: We are definitely a powerful example that, as you say, it is not. And so Stripe was originally incorporated as SlashDevSlashFinance, Inc., spelled S-L-A-S-H-D-E-V-S-L-A-S-H, etc. The slashes were actually spelled out. And the reason for that is we – well, it’s a long story. I won’t bore you with it. It was a programming joke, but we thought it was funny. The rest of the world, to our shock and surprise, did not quite find it as funny as we did. And the first name of the product was SlashDevSlashPayments because we wanted a slightly broader company name than product name. And extremely confusingly, while the company had it all S-L-A-S-H stuff spelled out, the product was just D-E-Vpayments.com.
And so the naming schemas didn’t even really match. And so we would have these meetings. And we’d describe what we do. And we were already fighting an uphill battle here. We were, as John says, three squirrels in a trench coat trying to masquerade as a real thing and evading all these questions about, “Where exactly are their headquarters?” And, “How do we not say our bedroom in a way that’s not a lie?” Or, “How do we say –
Tim Ferriss: “We have an open floor plan.”
Patrick Collison: Yes, exactly. Exactly, yes. Yeah. “We really embrace remote work.” So we were already fighting a bit of an uphill battle. And then at the end of the meeting or something, they’d ask us our name or for our business card or something. We’d have to hand over this thing that doesn’t even look like a company name. They’d look at us like, “Oh, but what’s the company name called?” We’re like, “Actually, sorry, sir. It’s this thing.” So it was all bad. And not only did people often misspell it, but it was a moment of celebration if anyone ever correctly spelled it. And so we came to accept the need for a name change. And naming things, as I’m sure you know, is pretty hard. And so I remember – I think it was the winter of 2010, which was a very wet winter out in California, unusually.
And I just remember all these dark evenings at the office where as soon as you just got stuck with your code or with some problem or something, we would have some little discussion like, “Well, what could we name this company?” And we had all these books around the office, just all sorts of random stuff. And so you just page through them and come up with a word and toss it out to the group and be like, “Oh, should we call our company this?” And so I remember John was trying to learn how to ride a motorcycle. And so he had a motorcycle repair manual. And so we had a lot of motorcycle words. “Should we call the company carburetor?” which, fortunately, did not make the cut. So it was not going well, as you’re hearing.
We eventually decide to write a little script to just come up with random potential names and actually to check whether the relevant domain names were available because it was important for an online company that we have the .com domain. And I can’t even remember how, but Stripe is one of the words that ended up on our list of names to check. I think we were just at some point trying to think up single, monosyllabic, English words that didn’t have some kind of strong, preexisting association. And Stripe, it turns out, was available relatively cheaply. It was I think $10 or $20 thousand, which that’s not cheap in some sense. But compared to the costs we were living of having a terrible name, it seemed like a good deal.
Tim Ferriss: What year was this?
Patrick Collison: This was 2010.
Tim Ferriss: So that’s astonishing to me. For a dictionary word that is a noun that recognizable, that’s astonishing. Did you negotiate or have someone negotiate on your behalf? Or was that the opening offer they made to sell?
Patrick Collison: Honestly, I’d have to go back to check the details. But there wasn’t a big, lengthy negotiation. There was maybe a –
Tim Ferriss: Wow, congrats.
Patrick Collison: – little bit of back and forth. Yeah. No, we really lucked out. What helped us, of course, is we weren’t wedded to any of these names. If the guy had said, “It’s $200,000,” well, that would have been exactly two seconds of thought. We’d have moved onto something else.
Tim Ferriss: Onto carburetor.co.uk.
Patrick Collison: Exactly. Exactly. So it really helped that we were happy to entertain anything at all. And the last thing worth mentioning there is okay, we bought the domain and started to rename all of our code and the website and everything. And then one day in early January, we flipped the switch. And everything became Stripe. Somehow in the checklist of all the things to change and do, we’d neglected to add an entry for, “Tell our customers.” And so people woke up in the morning to go to devpayments.com and check their sales and whatever. And they got redirected to stripe.com. And so we got a lot of confused customers being like, “Are you guys hacked? Have you been phished? What’s going on here?” Fortunately, back in January 2011, we had very few customers. And so when I say we got these emails from customers, I mean probably all five of our customers emailed us. So it was not a huge customer support burden.
Tim Ferriss: I do want to talk about perhaps some inflection points for the company since you certainly have more than five customers now. You have what is it? 80 percent of American adults have purchased something from a business powered by Stripe? Now I know that doesn’t mean that –
Patrick Collison: That’s right.
Tim Ferriss: – 80 percent of American adults are Stripe customers, per se. But you now have millions of businesses in 130-plus companies. So something happened between those two points in time. So it would be easy to talk about a lot of the highlights, a lot of the inflection points. And we will do that. But lest this appear like it has been home run after home run every time you’ve stepped up to bat, what I’d love to talk about if you’re willing are some of the harder periods, maybe near-death experiences, moments of doubt and to make it as personal as possible. So not necessarily in abstract about the company going through a tough time but periods when you have struggled. So give us one or two examples of that and then how you found your way out of that period would be certainly of interest to me and hopefully would help humanize the otherwise seemingly superhuman Patrick Collison. This could also be a personal period. Could have been high school, college, a difficult family situation. It could be anything.
Patrick Collison: I’ll give you the Stripe version and the person version. So with those caveats on the Stripe side, the thing that I think is important to communicate is despite things having been relatively smooth in that macro sense, it often is just extremely hard. And I remember early on, after – I remember after one particular meeting back in 2011-2012, just after the meeting, the API broke. And so –
Tim Ferriss: So the API, Application Programming Interface, could you just explain what that is?
Patrick Collison: Yeah, sorry. The core Stripe payments engine broke. And so our customers just couldn’t get paid and couldn’t accept payments from their customers. And we didn’t have many customers back then. Maybe there were 100 or something. But that was still 100 businesses. It felt like a huge deal. And we fixed it. It was only down for maybe 30 minutes or something. But I remember feeling really bad about that. And then I just remember – it wasn’t like there was something particularly special about that day. But I remember just reflecting on the enormity of the challenges that we would face in the future and all the work we still had to do and all the stuff that was still broken and all the people we had to hire and all the customers we’d have to convince to use us that we had not yet convinced. And it was just this moment of vertigo.
And I just remember being immensely dispirited and talking to John about, “Well, is there really actually any point doing this?” And again, what’s important to me about that moment is not that things were actually all that bad but the opposite. Objectively, they were fine. That day wasn’t really much worse than the previous day. But I think the – there’s this inevitable thing when you’re creating something where, on the one hand, you have to be very optimistic because if you weren’t optimistic, you wouldn’t bother doing it, especially in the face of such hardship and uncertainty. You also have to be very pessimistic because you have – there are tons of problems. And you have to be very tuned to spotting them, so you can go fix them. And so you exist in this superposition, this juxtaposition of pessimism and optimism. And you’re an extreme on both axes. And that’s just a weird psychological state.
And to remain in it, as you must for many years is – it’s just not normal. And you’re always necessarily over-extrapolating from limited data because, again, you should be. And that one particular customer decides not to use you, or one particular person leaves the company, or just some small thing happens. But you have to be really asking yourself, “Well, is this a trend? Has something changed? Is something systemically broken?” Whatever. And because you’re always extrapolating from these bad things while maintaining this long-term optimism, I think that is just a recipe for real psychological hardship. And I don’t want to overstate it in that the – there’s all the obvious acknowledgments about – we’re immensely lucky, among the luckiest people in history to have food and shelter and health and all these things. But the hedonic treadmill is very powerful.
And we rapidly adapt to take all those for granted. And so the fact that maybe in the scheme of things we should feel very grateful and lucky and you can tell yourself this narrative to try to keep things in perspective, the reality is that it is just pretty pummeling on an ongoing basis and that even for Stripe which, perhaps from the outside might look like this really neat little story, there have been many such moments where it just seems hard.
Tim Ferriss: What did the conversation look like with John that day? Do you recall any of the specifics? Was it more commiserations that you could get out of your system? Were you actually talking to him to determine if you should proceed or not? What did that look like?
Patrick Collison: It was more the former, more this just general dejection. We didn’t seriously think about stopping. I think both of us are – it’s less I think we’re both really determined and more I think we’re just stubborn. And so the idea of stopping just – it didn’t seem like a – I guess it didn’t feel like an option for us. Determination sounds glamorous to me. And I’m not sure we have that. But I think we’re just dogged. But yeah, it’s more like – people have different emotional cycles. And his sine wave was displaced from mine. And he’s a pretty cheery guy. That day, when I was super dejected, in his chipper way, he was telling me, “It’ll be fine.” And you give it another 24 hours or something, and the world looks a bit different.
Tim Ferriss: There’s something you mentioned just a few moments ago I think is worth trying to reiterate to make sure I understand it, which is the existential importance in the case of a lot of startups of being able to remain consistently optimistic enough that you can summon the energy and doggedness to continue while also being very good at envisioning problems and worst-case scenarios and bad outcomes so that you can avert them. And it’s tricky. It’s really tricky. It’s true also for – go ahead.
Patrick Collison: Well, I understand it’s tricky. But it’s not natural. And it’s not a mindset that I think most normal situations in the world train you to have.
Tim Ferriss: Yeah. And it can be really, really stressful. This is something I’ve observed not only in founders but also in a lot of investors, particularly those who can make money by betting on, in some fashion, apocalyptic or black swan events that cause a lot of damage or that are very scary and people who are not just betting on the long-side but betting on the short-side. And of course, we get into derivatives and stuff like that. But they’re thinking about the edge cases that could really be catastrophic for them and/or others.
Patrick Collison: Right. Although, when you’re starting a company, you have to be both the super-long, optimistic, “I’m just going to buy this stock and hold it for decades,” trader, and you have to be the catastrophic, Taleb-style, “The world is going to hell in a handbasket,” catastrophe trader. And you have to be both. And that’s just weird. And so I guess the thing that I think is maybe important to understand for folks is it’s intuitive that if a company or a new effort of any sort is not going well that things will feel hard and you’ll often feel dejected, and life, at least insofar as work goes, is not great. But the weird part is that even if things are going well and the effort or the company or whatever is succeeding, things will still often not feel great. And no one told me that before I started.
I thought that, “Well, if the company’s succeeding, then clearly, it’s going to be – not necessarily fun but at least it’ll feel good day to day,” whereas the actual reality is that you’re always necessarily operating at the outer edge of what you can handle because if you have spare capacity, you just take on more. And so you’re therefore, inevitably always on the cusp of feeling like you’re going to fall over. And even as we record this podcast, at this moment, I feel right on the edge of what I’m able to handle. And on the one hand, I don’t wish it were otherwise in that I enjoy testing myself and finding my limits and developing and stretching myself. But on the other hand, when you stretch your muscles, that’s painful.
Tim Ferriss: Well, it also makes me think of a conversation I had with Laird Hamilton, who’s one of the most legendary big wave surfers of all time. And I remember I was chatting with him. I don’t know how old he is. He’s one of those guys who defies any type of expectation of age affecting performance. I think he’s in his early 50s but still goes hunting for some of the biggest waves in the world. And I remember I was chatting with him at one point. And he said he had been tooling around on some easy waves earlier that day. And I asked him roughly how big he thought they were. And he was like, “20-25 feet.” And he’s like, “Once it gets to 20, you can start to have fun.” And I’m paraphrasing here. But he’s like, “Once you get to 30,” he’s like, “you really want to watch yourself. Once you get to over 50, you’re really not allowed to fall.” And when you are – and I’ve never been in this position.
But having spent a lot of time around founders and very fast-growing companies, when you do have at least the perception – which I think is reflective of reality that you are effectively always on the edge of redlining because, as you said, if you have extra capacity, you open the door to fill that capacity – who are some of the people you’ve leaned on or who have been helpful alive or dead or otherwise – I’m not sure what otherwise would be in that case. Zombie – to help you navigate this or learn how to surf that kind of wave? Because it is fucking unimaginable for most people – I’ve only seen it as a spectator really – what it takes to have your face pressed up against the windshield in the formula one car that is a Stripe or an Uber or any of these companies. It’s really hard to fathom what it takes and how much it resembles a professional sport. So who or what has been helpful in learning to navigate that?
Patrick Collison: Well, maybe just before answering that to add something to what we were just talking about that relates to what you just asked, there’s a period in my life where I did feel a bit – not really lost, but it certainly wasn’t clear exactly what direction I was going in. And so we sold our first company. And I lived in Vancouver for a while. I worked for that company exploring some other stuff as well.
Tim Ferriss: This is the Live Current Media?
Patrick Collison: Exactly. Yup. And then I moved to live with my then-girlfriend in Zurich. And so I lived in Switzerland for a while. And then I actually went back to college because I dropped out of college pretty early. And when I went to school, I thought, “Well, maybe I want to become a physicist or a mathematician or something or like that.” And who knows how successful if at all I would have been? Maybe I wouldn’t even have made the cut. But I had that ambition, aspiration. And I felt that we’d sold the company so early and it happened so quickly that I hadn’t really fully tested whether that was a good idea or not. And so I went back to college for a second time to do mostly math and physics. And so did that. And then while there, John was also in college at the same time. That’s when we went to start Stripe.
But if you looked at that two-year period it was drop out of college, start this company and move to Vancouver, move to this other country, go back to college, then start this other company. And when we started Stripe, it did not seem very promising. It seemed like this silly little developer payments thing. And again, it was another two years before it even launched. And so maybe that whole four-year period I think to many people who knew me or just were around, I’m sure it looked pretty scattered, weirdly planned, maybe misdirected. And they wouldn’t be entirely wrong. I certainly was not pursuing some grand master plan. And I think I was actually really lucky where from an early age, my parents were very okay with myself and John charting our own course. And you get these real hothouse environments where there’s a lot of pressure to go to this school, go to this college, pursue this career path, whatever.
You really feel like you’re on these narrow train tracks. And I would say that our upbringing was the opposite where really, our parents, even when we wanted to make very ostensibly strange and surprising decisions, our parents supported us. So when I was a 15-year-old and wanted to take a year off school to just program full time, my parents were supportive of that. Or when I wanted to try to drop out of school to go take this totally different exam system, my parents were okay with that. And so we had this upbringing where our parents supported us in that way. And when in my teens, early 20s was trying to figure out what the right direction was – I wouldn’t say that that was a lost period. Again, it was definitely a highly exploratory one.
And so just to your question of periods of real hardship, I think a lot of people either don’t get the opportunity to explore multiple directions like that or they – either others don’t give them the opportunity, or they don’t give themselves the permission to just have a few slightly lost years where the narrative isn’t super clear. And those years can be hard because, by definition, you’re not exactly sure where you’re going. And it’s very disorienting to not know where you’re sailing. And you can and do feel a bit of drift. And so looking back on that, I actually feel like it was really important in giving me confidence and perspective. But at the time, it definitely felt a bit unmoored.
Tim Ferriss: Well, I think that you – I think this is really important for a number of reasons. The first is that – and this is going to sound like a fortune cookie, but there is a quote. I can’t recall who it’s attributed to. I want to say Emerson. But Emerson’s like Abraham Lincoln on the internet. Everything gets attributed to him.
Patrick Collison: Yes. Him or Oscar Wilde.
Tim Ferriss: That’s right. Right. So “Not all who wander are lost,” right? So there’s a difference between being lost, which is you have a destination and you have gone off track or you are preoccupied with where you are currently located and don’t know where you’re located versus exploring and wandering. The second, which is I suppose more a follow-up question than a point is this: I’m very curious how your parents – and maybe you could also just tell us a little bit about what your parents did professionally or how they spent their time, but what your parents did to cultivate excellence and/or clear thinking without necessarily pigeonholing the direction of either of those.
So, if a biographer at some point is writing the story of your life, you give them unfettered access, how might they answer that? What are examples they might give, things your parents said, annual routines that you guys had or whatever, anything that comes to mind?
Patrick Collison: Well, we grew up in very rural Ireland, the middle of the countryside surrounded by farms and fields. And we were really – we had to figure out ourselves what was going to be entertaining and interesting and fun. It wasn’t just provided to us by the environment. And so we grew up as these free-range children. And we were lucky where there were lots of books in the house. And we read those pretty voraciously. I would say that the thing that our parents did is – well, there are a million things. But the three that stand out are they showed us the world. They took us to the library every day. They took us traveling in the summers. If there were interesting guests coming over for dinner, we weren’t dispatched upstairs or told to get an early dinner before the adults came. We were thrust right into the middle. So they really took us seriously and showed us the world.
The second thing is they really give us agency and autonomy and treated us as adults. And those went two ways and that on the one hand, they gave us a lot of freedom. On the other hand, they expected quite a lot of us. And so our youngest brother had to get some pretty major surgery in the US back when John and I were maybe 10 or 12 or thereabouts. And so they were gone to the US for several weeks, maybe more than a month. And we were left mostly alone for that month. We had a neighbor who checked in on us every day and made sure things were fine. But we spent most of the time alone when we weren’t at school. And from myself and John’s standpoint, that was fantastic. We loved the freedom. But of course, they reciprocally expected us not to give them cause to regret it.
And then the third thing is whenever we expressed interest in something, they really tried to find opportunities to – if there was a small chute of interest, they looked for opportunities to water it. But they never thrust those opportunities on us. Or I never felt that – or rather, they wouldn’t’ thrust the interests on us. I never felt that I was following a track laid down by somebody else. And so I remember randomly mentioning when I was 12 or 13 that learning – I don’t even remember why I thought this – but that learning ancient Greek seemed interesting. I think I just read some Homer or something, and I made a translation and that another language seemed interesting. And I was just saying that as some kind of random throwaway remark, I guess, the way a kid does. And sure enough, my mom went and found somebody at literally a local monastery who was willing to teach ancient Greek.
And then she told me about this. And so for two years, I went to that monastery once a week after school and learned ancient Greek. And that interest never went super far. I haven’t read much ancient Greek in the last 10 years.
Tim Ferriss: Me neither.
Patrick Collison: Yeah. But it was the kind of thing they did. And obviously, some other interests, like programming, they really took hold in a deeper way. And so I don’t have kids today. But I do reflect a lot on the kind of childhood we had because it was pretty different in multiple regards to the childhoods of the people around us. And especially when I got to college in the US, it was so foreign for me the idea that people were so laden with extracurriculars and burnishing their college resumes from age 12 or earlier. And the period of teenagerhood and adolescence was so intense, whereas for myself and John it really felt exploratory and that we were given – that our parents were some kind of life coaches or –
Tim Ferriss: Facilitators?
Patrick Collison: – mentors while we were – yeah, exactly, while we were roaming but that – yeah, exactly. I think that they were playing a supporting role rather than having us be – with these friends in college, it felt like they were at the front of a locomotive, and the locomotive is speeding along down the tracks. And they’re just hanging on for dear life being pushed along by the little cattle protector.
Tim Ferriss: When you had these dinners – this is something that has popped up a few times in conversations with a number of folks on the podcast, that parents had them included in specifically dinner discussions when interesting houseguests would come over.
Patrick Collison: That’s interesting. That’s interesting that that’s a commonality.
Tim Ferriss: It’s come up a few times. Not dozens of times but enough where it piques my curiosity to dig into it a bit. Would your parents encourage you to ask questions?
Patrick Collison: Sure.
Tim Ferriss: And actually, just so people can paint a picture in their own minds, did both of your parents work? One of them? What did they do professionally or how did they spend their time? Just so we have a little context.
Patrick Collison: Yeah. So both of them worked. Our dad for most of our childhood ran a small lakeside hotel. It had 24 bedrooms. And so he was – it was a few miles from our house. And he spent a lot of time there. And of course, for us as kids, it was super exciting. This hotel was like this giant playground, as far as we were concerned. I think the staff didn’t all appreciate that. But we loved roaming around it and going and sliding around the polished function room floor and all the rest. And our mom started a corporate training company back right around the time I was born. I think she had left her previous job, and then I was born. And I think after a couple weeks, she decided, “Oh, I don’t know. This kid isn’t that interesting.” And so from the house, she decided to start this company that would provide corporate quality management training.
And so you’ve probably heard these acronyms like ISO 9000, these certification programs that – and so through all these American multinationals setting up shop in Ireland, there was a lot of appetite for making sure they were doing things properly and well and so on. And so she started this business, again providing this training. And so basically all through my childhood, she was running this business for much of it out of her house. And then they got a separate office, but it was always part of the picture. And so from our standpoint, starting a company was really not some strange, foreign thing. It was pretty normal. I think whatever your parents do is always, from the child’s perspective, is normal. And I’m sure if our parents had been astronauts, being an astronaut would just seem like a totally normal career. And so that’s what they did.
Tim Ferriss: And you mentioned travel. Is there a particular trip that comes to mind? And there are many different ways to travel just as there are many different ways to live and choose places to live and so on. So we probably won’t have time to get into how your parents ended up where you grew up if they started there or ended up there which is a whole separate side of things. But could you describe perhaps a particularly memorable trip and how you traveled with your parents, what that looked like?
Patrick Collison: Yeah. So we went almost every summer camping in Europe. And so we would take the ferry to Europe which, from Ireland obviously isn’t that far. And we’d bring some tents or a little caravan. And we’d just go driving around the continent staying at all these different campgrounds. And Europe turns out to have all these really great, nice campgrounds.
Almost every town has one. And so we’d stay a few days here, maybe a week there and so on. And it would be France and Germany and Austria and Hungary and Italy and whatever. And I have these incredibly fond memories of those trips. They’d be a month long. And they were great because they were long enough that you didn’t feel pressed for time or like, “Okay. Today, we gotta go see this, that, and the other.” You shifted into just camping mode. And there were enough changes of scenery and environment that you just got to take a whole lot of different things in. Honestly, the other thing that was great about them is, even though being Ireland, there wasn’t a whole lot of distraction. We’d often just read a lot or focus on our own things. On these trips, you could focus and read even more. And so honestly, the most vivid memories I have mostly of these trips – it’s not going to see the such-and-such or so-and-so – it’s like particular books that I read. I remember we’d load up the car and the caravan, which is heaps and heaps of books. And you’d have these long drives, like eight hours, 10 hours, and just reading in the car the whole way.
Tim Ferriss: As I’m listening to your stories and more about your childhood and so on, a lot of which is brand-new to me, I’m simultaneously looking at a page on your website, patrickcollison.com/advice. And this may not apply to everybody in my listenership. I think a lot of them do apply to many different age ranges. But it starts with: “If you’re 10–20: These are prime years!” So a lot of folks will fall outside of that. But I wanted to touch on a few of these. And one is – so these two go together. But one is “Make things.” And then there’s one following it. But then following up on that just: “More broadly, nobody is going to teach you to think for yourself. A large fraction of what people around you believe is mistaken. Internalize this and practice coming up with your own worldview. The correlation between it and those around you shouldn’t be too strong unless you think you were especially lucky in your initial conditions.” or – this is my language now – you choose your environment like a place like San Francisco or whatever it might be. And I suppose even then if the correlation is too high, you should be careful.
So my question here is going to be a little meandering, so bear with me. Okay. There are people who seem to not care what other people think and develop their own worldviews because they have a predisposition in that direction in the sense that you can have a very good basketball player. There are certain skills you can work on to become a better basketball player. But if they say you should try as hard as possible to be tall, it’s going to be difficult to change that attribute.
There are a lot of people in Silicon Valley who are somewhere on the spectrum, let’s say, and may actually have diagnosable Asperger’s which, in some previous times, could have been a very maladaptive trait that would have been a selection criteria for removal from the gene pool that is now in this new context, in fact, in some instances, a competitive advantage because their lack of absorbing worldviews from others or feeling that pressure enables them to come up with their own perspective and orientation. So if we filtered those people out because they may be similarly difficult to imitate in a sense as a basketball player is to imitate in their height, are there any books, any documentaries, any approaches, or just any mental models or anything at all that people can use to internalize thinking for themselves to practice coming up with their own worldview? What are your thoughts?
Patrick Collison: Well, this is the big question, right? And yeah, maybe there are two halves, heuristics that you should have and use for who and what to listen to. And then secondly, separately, how do you think for yourself? Okay. I’ll start enumerating some particular heuristics or tricks. I’m not sure if this is a complete answer. But the first is when you see a smart person holding a point of view, and especially strongly holding a point of view that’s different to your own, rather than try to figure out how they’re wrong – that’s valuable, but you’ll inevitably do that. Your emotional brain will ensure you do. Try and figure out how they’re right. What is a sensible worldview in which what they believe or what they’re saying actually does make sense? That doesn’t mean they’re right, but trying to figure out if they’re not stupid, why would they believe this?
And so I’m personally very in favor of openness to immigration. I’ve obviously benefited from it myself. I think there should be more of it in the world. But I think we can’t just dismiss people who oppose immigration as nativist bigots. I think we have to ask the question and just try to understand, “Well, what could or would cause somebody to harbor concerns there?” Right? So that’s one. So trying to figure out what worldview helps how that view makes sense.
A second one is – and we touched on this at the beginning of the conversation – just exposing yourself to more worldviews because I think a lot of people – well, everyone finds it more comfortable to be around views that accord with your own and models that accord with your own. And so there’s a deliberate seeking out of discomfort. And I do some of this myself in who I follow on Twitter and what I read and even who I spend time with. So trying to make sure that I expose myself to people who have smart, thoughtful, and really pretty different perspectives on important matters.
Tim Ferriss: I have to pause because this just seems too fertile to let go quickly. Are there any people on Twitter you could give as examples? You just said they’re smart and thoughtful. So you’re already complimenting them.
Patrick Collison: Yeah. Right.
Tim Ferriss: We could also bookmark and come back to it if it’s hard to come up with.
Patrick Collison: Yeah. Let me see if I can think of a few. Let me think about it and come back. But it’s a good question. And maybe the other one general heuristic or habit here or something is just to not get mad and to not get offended, in that outrage and offense and anger are – they’re sometimes useful, of course. But I think they’re less useful than – well, they’re over utilized. They’re not useful as often as they are invoked. And I think for whatever reason, the ability to not take offense and to inspect and to try to understand and even try to really extrapolate from an idea or a set of ideas or a worldview without taking offense at it, that’s not something that for whatever reason is really valued in our culture but I think is actually super important. As has been said, can you run an idea in emulation in your head – in computers, people talk about it running VMs.
AWS: You upload your software, your code. They run it on their servers, but they run it in emulation and in a little sandbox to make sure that it can’t break out and affect other users’ applications. And so similarly, can you run an idea and scrutinize it and inspect it and follow its consequences without it bleeding out into the rest of your brain and infecting your whole worldview? And I think the ability to do that without getting angry or taking offense is really super powerful because if you can do that, you can then afford to – in a way, you can be less careful about what ideas you inspect and scrutinize. And so you can just – you can be much more far-reaching and broadly ranging. And then –
Tim Ferriss: Are there any people in your life or who you’re aware of you particularly respect for being good at doing this, doing this meaning being non-emotionally reactive to opposing viewpoints? And I should say also, I’m looking at your followers on Twitter which people can find at patrickc. That’s your account. And I just want to give an example of two. Contrast. So you have one HarshSikka, S-I-K-K-A. Bio: Applying biological constraints to building intelligent, robust, and generalizable systems @Harvard @GeorgiaTech @UCSanDiego right next to @RelloAlmighty, Almighty Rello. And bio is, “Almight Rello Da Hustler Say Hello To The Bad Guy They Say I’m A Bad Guy…” So those are a – a lot of professors, a lot of researchers. Also, here’s a friend of mine you follow, Graham Duncan. Really interesting guy.
Patrick Collison: Oh, yeah. Sure. Yeah. He’s awesome. I made a list of some people I follow at patrickcollison.com/people. And I wouldn’t say that all of them are excellent at this, at not taking offense and trying to find the best in some particular idea or trying to find whatever truth is in it. But I would say as a general matter, they are.
Tim Ferriss: And why is it when I look at some of your posts –
Patrick Collison: I also have a Twitter list called “Reading,” which is basically the same list but an easy to follow format. And so anyone can go follow that list. And I think, actually, a reasonable number of people now do.
Tim Ferriss: And you seem to, whether it’s reading or people, have an intense interest in – I’m looking at your patrickcollison.com/people right now. Yeah, you do have some great – John Arnold is definitely worth checking out for a lot of folks who will not recognize that name. Of course, Stewart Brand. Yeah, lot’s of good people on this list. So I encourage people to check this out. But coming back to one name that popped up when I was looking on your Twitter account, which I think you also recently shared: Pseudoerasmus.
So, economic history and development economics. This feed contains no current events, no political news, no culture, and NO history of economic thought. Why do you seem so interested in economics, economic progress? In some cases, economic history certainly can seem very niche. But I suspect there’s a lot more to that, labor repression in the Indo-Japanese divergence is the pin Tweet by pseudoerasmus. Why read so much of this type of stuff?
Patrick Collison: Because it’s so important in that the – arguably the single most important thing about our lives compared to other lives lived in human history is that we have the immense good fortune to have been born in wealthy societies. And that has had so many consequences on our lives, right? It means that our parents are way more likely to be alive. Our siblings are far more likely to be alive. We get to work on things we find way more interesting than tilling in the field or foraging for bushes. It means we’re exposed to a more complete picture of the variety and complexity and fascinating material of the world. I don’t need to obviously enumerate all of this, but it’s astounding compared to all the humans who ever lived, just how amazingly lucky we are. And again, that luck is we were born into a wealthy society. And so I think one of the most urgent and important moral questions is why doesn’t everyone get to do that?
And how can we change the world such that more people do? Last week, I was in Africa. I was in countries including Senegal and Ethiopia and Rwanda. And those countries are obviously far less wealthy than the US. And the people there have far less opportunity. And their lives are far less comfortable. And so I think there’s a real moral question. What can we do to put them on an equal footing with us? And indeed, how can we raise the waterline for all of us such that while our lives are amazing compared to the people who lived before us, there are still tons of terrible things that happen. People die of cancer.
And people die of death caused by pollution. And while some people in society today get fantastic educations and have the good fortune to have great colleagues and meaningful work, a lot of people don’t, etc., etc. And so I see economics and economic history as being really a kind of moral anthropology and cultural analysis and structural analysis of, “How do we solve this centrally, foundationally, this question that really takes primacy?”
Tim Ferriss: I want to thin slice this a little bit and dig on this because it’s something that I’ve thought a lot about without any concrete conclusions. And I’ve bounced around quite a bit. And I’ll explain what I mean by that. So the question that I’ll want to ask but I’ll give some background on my personal experience is if we are using a term like economic progress or economic prosperity, what the component pieces are of that that have the greatest benefits and the fewest side effects. And the reason I phrase it that way is I’ve also spent some time in Africa, not in – certainly, I would doubt in as many countries as you have. But I’ve spent time in Kenya and spent time in Ethiopia. And Ethiopia was mostly in the Tigray region in some very, very poor areas. And I was chatting with a lot of the folks we interacted with, those who spoke English or those with whom I could communicate through a translator.
And one thing that struck me in Ethiopia was how much people smiled. Now, that doesn’t mean they don’t need clean drinking water. It does not mean they wouldn’t benefit from footwear in some instances. There are all sorts of not just comforts but necessities and infrastructure that would almost certainly have tremendous upsides and benefits with very few downside possibilities. And I was talking to some people who lived in Tigray about how happy Ethiopians seemed to be. And I heard on several occasions – it wasn’t just one, these were in different locations – people say, “Oh, yeah. People are really happy until they get TV.”
And I asked them why that was. And they said, “Well, once we get TV, we –” they didn’t use these words exactly, but in effect, “Once we can see the Kardashians and all of the amazing things and toys and cars and fashion options that all these other people have, we become dissatisfied with where we are and what we have.” So that stuck with me. And I didn’t have a resolution to that necessarily. But how do you think about which components you’re trying to solve for or to optimize for?
Patrick Collison: Right. So I think happiness is certainly a tricky measure. And as you say, this sociological comparative version of it – and the phenomenon is seen where to some degree – there’s another way of saying what you just alluded to, which is that the happiness you have with your level of wealth is a function of the wealth of those around you. And so if you find out about people who are above you in some income table, that might actually depress your happiness slightly. However, it’s also pretty robustly the case that there are some things that are just absolute inputs into happiness. And your health or chronic pain or whether your kids die or not or whatever, these really do matter. And in the example of Ethiopia, while on the one hand, I think, as I guess you saw, it’s not like this is a country where everyone is in a perpetual depth of despair, it does rank in the bottom half of global happiness surveys.
And actually, Max Roser has this – he does a lot of data visualization around development economics. And he has this wonderful visualization, this scatter plot of happiness against per capita income. And sure enough, what you see is it’s certainly not a perfect correlation. There are all these other factors, maybe cultural effects, or these comparative questions, and so on. But broadly speaking, the correlation really is very, very strong. And so I guess another version of the complexity you’re getting at is when you look at these intertemporal comparisons, when you look back at how happy they reported themselves as being 60 years ago, obviously they had inferior health outcomes, or they didn’t have as many leisure options or they couldn’t travel as much or whatever.
So, their lives on some objective level were worse, but their happiness scores aren’t that bad because, on some level, they didn’t know what they were missing. But I see that as more being something that’s tricky about happiness surveys than something about fundamental human well-being in that if I – the fact that our baseline shifts as we realize that better is possible does not mean that the gains are illusory. And if half of my kids died but I still scored myself as being pretty happy because I didn’t even realize that not having that happen was even an option, such that when that problem was solved, my self-reported level didn’t change that much as I adjusted to the new normal, I don’t think that means that that gain, that improvement is not very, very real.
Tim Ferriss: Oh, sure. Totally. And I was –
Patrick Collison: Not that that’s what you’re saying. I know. The core point you’re making about the complexities of having a survey I think is 100 percent right.
Tim Ferriss: Yeah, it’s very, very slippery.
Patrick Collison: Yes. Actually, Scott Alexander, Slate Star Codex, has a really good blog post about just the trickiness of these happiness surveys where I think the core message and data from them is correct. But a lot of specific interpretations and comparisons you’re going to make are a little bit fraught.
Tim Ferriss: Oh, yeah. Absolutely. I don’t want to cast aspersions on all social sciences or anything like that. But a lot of it gets very swishy. And it’s so highly multi-variate when you’re trying to assess something like this in the field that even the definitions by which the polls or surveys are being conducted get very, very subjective. And I was looking at a recent National Geographic – I suppose I would call it a poll. It was reasonably well constructed from what I can tell to try to assess the happiest places on earth. And what I found striking about it was not necessarily of some of the frontrunners, although I did find how different they were – interesting in the sense that you have, let’s say Denmark, Singapore – which is particularly interesting because it’s so brand-new in a lot of respects. It was a kind of a grand experiment – and Costa Rica. Very different places.
But what I found striking was that Bhutan, which is talked about all the time as among, for lack of a better term, hippie, new age circles as being very forward-thinking because they focused on – what was it? Gross national happiness instead of GDP – is, in fact, one of the most unhappy places and that something like gross national happiness can be used as a, “Don’t look at this thing in front of you. Look over here because we’re focusing on that.” It can be used as a distracting factor from the things that are actually, quantifiably bad. So there’s that.
What have you found – so we’ve talked about the certain aspects of the wide divergence of economic prosperity across the world. My question would then be now what? What are the levers to pull? What actually matters? There are a lot of people squandering a lot of attention and energy trying to fix this in a thousand ways, 900 of which probably aren’t going to amount to much. What are the Archimedes levers in the situation like this?
Patrick Collison: Well, the first thing I would say is I think that question that you just asked is the big question that I think we should all be obsessed with. I think you should ask every guest that question. I think people in positions of influence or where they can have great impact, they should be obsessed with it. It is an issue of true moral importance. I don’t think there’s going to be any silver bullets and panaceas. Obviously, Stripe is one iron in that fire where with Stripe, we hope to con – we frame our mission as to grow the GDP of the internet, very directly around economic growth. And on some level, that sounds pretty arcane. But I think there are many other companies that are framing their mission relative to GDP. But it really does get back to this idea we’ve been discussing where I think that’s actually a very urgent cause. I think roughly speaking, you can break it down in two ways.
Actually, maybe three ways where there’s: how do you raise the level of countries that are behind the frontier – so emerging markets, developing countries – how do you raise them to where we are today? And there are these tantalizing examples that that is actually possible until you look at – you mentioned Singapore. You look at Hong Kong, Taiwan, South Korea, to some degree, Vietnam, of course, China, though China still has quite a ways to go. But there are these amazing examples of countries that have nearly transformed themselves in remarkably short periods of time. South Korea is perhaps the best example just in terms of the magnitude of the change in just a couple decades. And so we might think – perhaps, if you look at Africa and no other countries existed, you might say, “Well, inevitably, it takes centuries for this catchup to happen. And maybe we can accelerate it a little bit. But there’s no way this can happen overnight.”
That’s imperially not true. We have these examples of countries in which it happened in a grand arc of history sense. It happened essentially overnight. And so what is it about South Korea that made that possible? And can we enact the same transformation in Egypt or in Ethiopia? So I think that’s one dimension of the question. I think the other dimension is how do we advance at the frontier? And so if you think about Western Europe or North America or Singapore or Japan or whatever, how do we make progress here? And I think so much of that is how do we enable new things to happen? How do we have new technology get deployed? How do we have entrepreneurs start more companies? How do we unleash the potential of more people who want to do more weird things?
How do we make sure that when somebody spots an opportunity for improvement that It doesn’t get squished by the stultifying deceleration of the status quo? How do we make sure that it gets encouraged and amplified? And again, obviously, Stripe is an effort in this space, as indeed too is Pioneer. And the third one is, well, how do we just generate new knowledge? How do we understand the world more deeply and what is intrinsically possible, so we have more buttons to push on the switchboard? and so I break it down in those three ways. And I think they’re all quite different questions and all really incredibly important.
Tim Ferriss: I agree that they are very important. And I’d love to revisit for a second if you have any thoughts. South Korea. It’s come up a few times. What are some of the observations you’ve made or things that you think are interesting about South Korea? Any specifics of what they’ve done?
Patrick Collison: Well, ironically, it’s the richest country in the world by GDP that I’ve not been to. So I caveat my answer with that. Having said that, there’s actually a really good book on this topic called How Asia Works by Joe Studwell, I believe. And basically, he tried to answer exactly this question of why did South Korea and Taiwan and China and Vietnam and so forth – why did they diverge from Philippines and from Indonesia and to a significant degree, from India and so forth? And basically, the answer he gives – and he marshals fairly compelling evidence for it – is the following: Land reform, protected but competitive industrial and expert industries, and then third, tight control over the consumer credit sector. And that obviously seems like a very arbitrary basket of things, but he makes a pretty strong case for it.
And just to provide a little bit of color on that, the idea is that first, you want to make sure that people own their own land, so they can farm it more effectively, they can reap the rewards, the fruits of their own labor. And so that gives you this immediate bump in national income when people can invest in something they really own themselves. The second thing is, well, most of these countries have no meaningful export industries or these value-added export industries. So you encourage the creation of a national car company or something which, of course, South Korea successfully did or maybe do some electronics manufacturing or whatever.
And you want to subsidize that, but you do have to force them to compete internationally because if you just protect them and they just serve the domestic market, you’ll just end up with a worse and less efficient version of stuff that exists in the rest of the world. So you gotta force them to compete. And the third one is you want to restrain the consumer credit industry such that rather than giving credit to consumers to go and spend it on leisure or whatever it is that consumers might choose to do, that you direct all that towards industrialization, economic progress, and catchup growth with the rest of the world. And then once you catch up, then maybe you should give it to consumers because who else are you going to give it to? You’ve reached the frontier.
But the thesis of the book is that reigning it in in the development phases has really served those countries well. So that is basically the prescription as Joe Studwell lays it out. And I’m no expert here, but I really spend quite a bit of time trying to understand this question. And it’s certainly the best cut that I’ve seen. Another one that’s worth mentioning is James Fallows wrote a piece for The Atlantic back in the ‘90s called – it’s not called “How the World Works,” but it’s some title like that. But if you search, “James Fallows trade,” and if you include, “List,” this German economist as a search term, then you’ll find it. And it’s again about – it’s basically about the South Korea question.
Tim Ferriss: Great. And I’ll put all of these links – there have been a few things that have come up with maybe reference checks required. So for people listening, I will have my team check on all that stuff. And we’ll put links into the show notes. So you’ll be able to find those at tim.blog/podcast. On South Korea, just to add a maybe ridiculous sidebar, another headscratcher about South Korea is that for many years in the last decade, they have produced the best breakdancers in the world. And people who are curious to see what that looks like can check out Bboy Pocket for some ridiculous footage. And how that came to be is also a gigantic mystery to me. But I’m hoping that perhaps I can find online – there is I want to say “The History of Japan in Nine Minutes.”
Something like that on YouTube, which accomplishes that feat by omitting most proper nouns, particularly names of people, but it gives you a really nice synopsis. And I’m going to try to find something similar for South Korea and put it in the show notes. So we have just a little bit of time left. What I would love to talk about, because this is something that I feel like I’m pretty good at, and this is decision making. But I still know there is a ton of room for improvement. And I, in the process of preparing for this conversation, came across a transcript of a conversation in which you talked about increasing the speed of decision making. And it made me think a little bit of – I think it was the Eisenhower Matrix of prioritizing important but not timely quadrant and so on.
But could you talk about your framework for making decisions or how you have cultivated making faster decisions? Because this is I think so important. And along with the involvement of now successful entrepreneurs as kids at the dinner table, the focus on making fast decisions even if there’s a 10 percent or more error rate pops up a lot. Reid Hoffman, LinkedIn fame, another good example of that. I would love to hear you – talk us through that because on a day to day basis, I know that’s important. And yet, I need a methodical way to practice it more if that makes sense.
Patrick Collison: Yes. Let me think for a second. I actually think that decision making is probably a little bit overrated as a question or an area of study in that – investors, obviously, this is their job, right? And that’s all they can do in some sense, invest or not. And fine if they’re – certain kinds of investors get to actually help the companies they invest in. So they have other levers at the disposal. But in some simplified model, it’s like, “Do you click the button or not? Do you pull the lever or not?” I actually think that in our lives, things rarely have that character. Sometimes you have a true binary decision like, “Do I go to this college or that college?” “Do I take this job offer or not?” And it’s an investing or investment-like decision.
But it’s not usually that. And I think that the question I would encourage people to think more about is, “How do I get to make better decisions?” as in, “How do I make sure the decisions I’m confronted with end up being better?” It’s not like, “How should I choose between option A and B,” but, “How do I make sure that both options A and B are as good as possible, and there’s also a C, D, and E, and that those options are great too?” And that’s about how do you explore the space to make sure that you – well, just to return to the example we just mentioned, it’s like, “Do I go to this college or that college?” There’s also a C there which is, “Well, should I go to college?” Or it’s, “Should I become a doctor or a dentist?” But maybe the answer is that you should become a biochemist. And so the way I would – I find myself in conversations with people really trying to push them.
It’s less on how do you make a decision and more about how do you jolt yourself out of the particular furrows that you’re in and realize the possibility space and the world is just so much bigger than perhaps people are thinking about. It happens to all of us. It happens to me, that your horizons narrow. You get stuck in your existing models. You get used to conceiving of the world and the options in front of you in a particular way. And it’s more about how do you repeatedly pull yourself out of that.
Tim Ferriss: How do you do that? Are there questions you ask? Are there any –
Patrick Collison: I think certain people are great at this. I have a friend, Michael Nielsen. And he –
Tim Ferriss: What was the last name?
Patrick Collison: Nielsen. N-I-E-L-S-E-N. And he’s just exceptionally good at – you’re thinking, “Well, should I go up or down?” And he’s just great at pointing out all the different ways in which you could go sideways. Or you’re living in flatland on this two-dimensional plane. And he points out maybe you could go up. And so I guess the best ways that I found are particular people, people who just seem to think laterally. In my head, they’re thinking sideways. And I think the second best way is exposing yourself to more perspective and ideas in all the ways we’ve already discussed. But I think finding the people who just think a bit divergently, the returns are really high. And I think having that little board of directors around you, that’s an imperfect analogy because it’s not like there’s a specific set for me. I tend to go to different kinds of people for different kinds of issues.
And it’s not like they actually have any formal power, obviously. But just that notion of there being these sources of perspective that are quite different to you, I think it’s just really very powerful. And I think valuing those people and building those relationships really pays off.
Tim Ferriss: You mentioning that, the peer group or virtual or real board of directors with divergent thought processes made me think of a book that really helped me a long time ago. I’ve been meaning to revisit it. But it’s actually a combination of two books. And I don’t know how well these would age if I were to pick them up now for where I am.
But I would want to say probably 15 or 20 years ago I found them very, very helpful. Edward de Bono is the author. There’s one book. I want to say it’s Lateral Thinking. The other was something along the lines of The Six Thinking Hats. And the conceit or the premise behind the latter is that you create a virtual table of advisors who represent a different extreme perspective. So you might have a pessimist. You might have the innovator. You might have the fill in the blank. And there are a set of questions and priorities that each of those has. So you run your situation through the lens of each of those thinking hats. And I found that tremendously valuable for, as you put it, getting out of flat land.
Patrick Collison: And the amazing thing is – well, I read about this study. I have not confirmed whether or not it has replicated. But the idea that people can improve their own decision making by simply choosing other people – basically, exactly along the lines of what you just said – and imagining what they would say, like specific other people. Imagining what they would say and then averaging over the responses. But that’s a really amazing fact because this is all occurring in your own head. And so the idea that by just simulating other people and then, again, just averaging computation over the responses to actually be better is really a pretty trippy thought. And yet, it kind of makes sense to you, right? Because you can actually, for certain people, predict I think with relatively good accuracy what they’re likely to say. And it’s a way of getting out of your own biases.
Tim Ferriss: Totally. And in fact, I haven’t done the averaging of responses. But I do have a number of friends who have very well-developed characteristics I would like to develop more myself. And one of them who comes to mind is Matt Mullenweg, the –
Patrick Collison: He’s great.
Tim Ferriss: Amazing guy. CEO of a company called Automattic. M-A-T-T Automattic, if people can put the two together now. So Matt Mullenweg, Automattic. In any case, brilliant guy. Not to be confused with Auctomatic. So Matt Mullenweg –
Patrick Collison: Automattic is way, way, way more successful than Auctomatic ever was.
Tim Ferriss: So Matt Mullenweg is one of the calmest people on average I’ve ever met. And this is particularly noticeable when he is going through circumstances or encountering business situations or personal situations that would elicit a really strong emotional response from most people I know, even high achieving people. So very often, when I feel myself on the verge of getting spun up about a given situation will ask myself, “What would Matt say?” because I’ve had him talk me off the ledge so many times, away from making rash, ultimately what would have been really bad decisions, often some type of quick emotional response to who knows what. It could have been anything.
So, I have found that really useful. And I’ve done that also with people like Richard Feynman, for instance. I think it’s Surely You’re Joking, Mr. Feynman! One of my favorite books of all time. So it does not have to be someone you know in a direct personal sense. But it helps if it is someone who you feel you know well. And so I’m glad you mention that because I’ve personally used that. Matt, for whatever reason – I suppose for many reasons – tends to be one I go to a lot because I wouldn’t say that calmness is always my defining strong suit.
Patrick Collison: Yeah. No. I think having that pantheon of people both people that you actually know and then people you know from afar and maybe they’re living, maybe they’re dead, it’s just super powerful. And I guess there’s something about us as humans where we’re uniquely well-adapted to being influenced by and understanding other humans.
And so rather than thinking about decision making purely as this abstract science but actually embracing the fact that it has this deep human character to it, and you can really use that to your advantage. And I know many guests on the show have talked about the importance of being deliberate and intentional in selecting your peer group and the people who influence you. One thing you can do is you can try to make sure the people around you don’t influence you too much and that you are truly original in coming up with your own thoughts in so on. Or you can embrace the fact that they do, and they inevitably will and just be careful about who they are and try to make sure that those shape you in ways and directions that you want to be shaped. And I think that’s both more effective, but I also want to say a more fulfilling way to go about it.
Tim Ferriss: And I want to confess also that I thought when you were talking about binary decisions first, whether it be investing or college, where I thought you might go – which I’m glad you didn’t because now, we have more to discuss – is that there are many decisions where you cannot possibly make an informed decision based on complete information. And that’s part of the reason why I find Eisenhower very interesting to study is that he had a lot of military experience in which case you do not have the luxury of taking forever to gather information to make a decision. And in many cases, the only way you can have more complete information is to make what might be the wrong decision and then course correct.
Patrick Collison: Yeah. Exactly. And this is back to this point I think of – you’re dead right to flank this. And I think it’s back to this idea that just try to get yourself into a position in which you can make a better decision. And one way you can do that is by exploring for more options right now. Another way you can do that is just make the decision and remake it if you have to because the remaking of it can often be a better decision because you’ll have much better information once it’s augmented with or once you have the additional information that, “Hey, this branch really does not look promising. And I know that because I tried it for two months.” And again, I think another way in which the framework of optimizing decision making can be a little bit harmful is it characterizes – or I guess it focuses on the locus of the decision itself, whereas who cares?
You don’t necessarily need to be that good at decision making if you get really good at remaking the decision when and as necessary. You mentioned that I fly. Both John and I have been flying for more than 10 years. And when you’re flying a landing, you’re always off track, always off track. And if there was a big discussion of, “How do you make sure that you get established on precisely the right glide slope when you start,” I don’t think that would really be that productive. I think it would be pretty frustrating. Instead, it’s all about the constant feedback and course and error correction. And I think that’s, as a general matter, a better model for life and that even a lot of the decisions that look pretty trapdoor may not necessarily be. There’s a really good book that I very highly recommend called The Inner Game of Tennis. It’s –
Tim Ferriss: Timothy Gallwey, right?
Patrick Collison: Yeah, exactly. And obviously, one of the general messages of that book is that so much of doing things well is about being really good at seeing just what is happening and then training your conscious and subconscious to make the requisite corrections. And that intuition really resonated with me.
Tim Ferriss: I’m so glad you mentioned that. And it’s reinforced I think a directional change for me. It’s not a directional change. It’s a reformatting of the thinking about the problem because you could have the best solutions imaginable for the wrong problems.
And you’re not going to get where you want to go. In my case, I think I focused excessively on getting better at decision making without really refining that to say that perhaps the better question to ask is how can I get better at – or better could mean faster, develop more confidence in, experimenting very quickly and then undoing or redoing the decision because that is – for instance, I’ve, in the last year, focused on getting very good at re-negotiating commitments which I think for a long time, philosophically or morally, I objected to it until I realized that all of the people I know – well, I shouldn’t say all, but most who are paragons of execution will occasionally just say, “Fuck. I bit off more than I can chew. I need to go back and re-negotiate some of these.”
“I need to go back and have uncomfortable conversations and wipe my calendar of the handful of things that I committed to six months ago because I have more information now. It does not make sense.”
Patrick Collison: Yup. And there’s all the hyperbolic discounting that we engage in with regard to our future selves and overcommitments that ensue and all the rest. And I think also – well, there’s another fabulous book that touches on some of this, The Art of Doing Science and Engineering by Richard Hamming.
Tim Ferriss: The Art of Doing Science and Engineering?
Patrick Collison: Yes, that’s right. And the last chapter especially – the whole book, to some degree, but especially the last chapter is I think really applicable to and relevant to really almost anyone. The last chapter is called “You and Your Research.” It’s actually a talk that I’m sure a lot of people listening to the show have previously read or heard. But Hamming worked at Bell Labs.
And he, in the book, often quotes and cites John Tukey, this amazing guy who also worked at Bell Labs and is the father of data visualization. And a lot of data visualizations and analyses that we’re familiar with, that we think of as being standard, John Tukey actually invented. But there’s this Tukey line that it’s far better to have an approximate answer to the right question which is often vague than an exact answer to the wrong question which can always be made precise. And again, I think this gets back to the same idea that it’s somehow more important to be making the right decisions, to have the right options than to be perfect at choosing between a specific set of options.
Tim Ferriss: Right. You know what? Yeah. I would like to sit and digest that myself. And so it’s probably just for recency bias for people listening, a good place to start wrapping up. And I know we could go for hours more. So maybe we’ll do another round sometime. But are there any parting recommendations, requests, suggestions, words of wisdom, anything at all, questions you’d like to pose to the audience in a place where they can respond or a way in which they can respond, anything at all that you’d like to say before we wrap up?
Patrick Collison: I guess to whatever extent – well, I wrote in that list of advice that if people around you don’t think what you’re doing is a bit strange that maybe it’s not strange enough. And I don’t think you should always be heeding that, but I do often wish that people did more strange things in service of or in pursuit of real long-term economic and technological progress. Figuring out how to help people to do more weird, strange, and original things in service of that is – that’s my particular goal, trying to arm those upstarts and those misfits. But it’s a very big space. And I would very profoundly welcome more participants pushing for that cause.
Tim Ferriss: Here, here. And people can give a wave hello on Twitter at patrickc.
Patrick Collison: Yes.
Tim Ferriss: They can –
Patrick Collison: And by the way, I think your podcast is a fabulous effort in this direction.
Tim Ferriss: Thanks so much. That really means a lot. And that’s certainly a hope of mine. That is a hope of mine. I so enjoy having these conversations. And it’s opened so many doors for me in terms of my own thinking and questioning so many of my own assumptions that I hope cumulatively that it does help nudge things into a more positive direction along the lines that you mentioned. So I appreciate you saying that.
Patrick Collison: Well, yeah. No, I won’t bore you or flatter you with praise here, but I think, to my perspective, certainly – and I listen to a lot of podcasts – that there’s a lineage of podcasts that can be traced back to this show. There’s a model that you prototyped and obviously, continue to implement that now, a lot of other podcasts are somehow a different version of.
Tim Ferriss: Which I’m excited about because hopefully, they’ll do an even better job. And I’ve been so excited to see certainly Jocko Willink run off and create his entire empire. Then you have Cal Fussman and Peter Attia and others. It’s really fun. And Hamilton Morris. I’m waiting for your podcast, Hamilton too, as are thousands of people.
Patrick Collison: And right. And these aren’t competitive in the sense that Robinson Crusoe was one of the first novels. And it turns out that that was a big space. And it was not a bad thing when more novelists came along. And so similarly, I actually think that – I’m not even sure the podcast space is the podcast space, per se. It’s more the serious, in-depth, long-form exploration. But even though that, obviously, is way bigger now than it was five years ago, it still seems to me that it’s actually still quite early.
Tim Ferriss: Oh, it’s so early. I agree. It’s really, really early. I had people tell me when I was contemplating starting a podcast that the ship had already sailed, and some pretty smart people with a lot of experience. And they were telling me then that the ship had sailed. And I’m telling anyone who’s considering starting a podcast now that it’s not even close. The ship hasn’t even big built.
Patrick Collison: This is one of the really interesting and surprising things where people keep feeling that spaces are too late when, in fact, they’re not only not too late but still in the first 10 percent. Marc Andreessen talks about getting to Silicon Valley in the early ‘90s and thinking, “Man, I’m too late. And there are endless similar examples you can point to. And we worried about it with Stripe, obviously. And yet, we came to realize that actually, the internet as a whole is still in its earliest innings.
Tim Ferriss: Oh, definitely. Yeah. Stripe is a great example of this. There’s always a market for great. And that is not dependent on creating or shipping something today or this afternoon. There’s always room for that. Well, Patrick –
Patrick Collison: Amen to that.
Tim Ferriss: Patrick, I appreciate you taking the time.
Patrick Collison: Thank you so much.
Tim Ferriss: And this has been a lot of fun. And for everybody –
Patrick Collison: Likewise.
Tim Ferriss: For everybody listening, I will put links to everything we discussed, the papers, the books, the sites, some of the folks on Twitter, all of these things in the show notes which you can find at tim.blog/podcast. Just search Patrick or Collison, and this episode will come right up. You can scroll down to find it. And until next time, thank you for listening.
Posted on: December 24, 2018.
Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world's most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapter and full details. Roughly 90% of the guests have never appeared on my podcast.
Who was interviewed? Here's a very partial list: tech icons (founders of Facebook, Twitter, LinkedIn, Craigslist, Pinterest, Spotify, Salesforce, Dropbox, and more), Jimmy Fallon, Arianna Huffington, Brandon Stanton (Humans of New York), Lord Rabbi Jonathan Sacks, Ayaan Hirsi Ali, Ben Stiller, Maurice Ashley (first African-American Grandmaster of chess), Brené Brown (researcher and bestselling author), Rick Rubin (legendary music producer), Temple Grandin (animal behavior expert and autism activist), Franklin Leonard (The Black List), Dara Torres (12-time Olympic medalist in swimming), David Lynch (director), Kelly Slater (surfing legend), Bozoma Saint John (Beats/Apple/Uber), Lewis Cantley (famed cancer researcher), Maria Sharapova, Chris Anderson (curator of TED), Terry Crews, Greg Norman (golf icon), Vitalik Buterin (creator of Ethereum), and nearly 100 more. Check it all out by clicking here.