Two young Irishmen are building a ground-breaking business which allows prompt addition of a payments system to a website

YOU CAN’T get much more Silicon Valley than the Collison brothers and their latest Palo Alto based start-up, Stripe (Stripe.com).

First, there’s the brothers themselves. Limerick-born pair John (21) and Patrick (23) formed their first company, Auctomatic (which manages inventory for sites like eBay) in their teens, and sold it soon after for a reported $5 million in 2008. Patrick had been a winner three years before that of the BT Young Scientist competition for his programming language Croma.

Then, there’s their bursting-at-the-seams offices in an old Spanish-style two-storey building just off Palo Alto’s University Avenue, where bicycles, stacks of books and magazines and mushy sofas vie for space with computers, workdesks and 17 employees – few of whom are around late in the afternoon. Apparently a lot of them like to go and code in nearby coffee houses, which is fine by the brothers (who also offer unlimited holiday time and pay for all employee meals and, as their website says, “endless snacks and beverages”).

Most of all, there’s the sheer energy, excitement and inventiveness of the brothers themselves, qualities that no doubt helped them nail a set of A-list investors in Stripe – among them PayPal co-founders Elon Musk (now of Tesla electric cars) and Peter Thiel; Netscape web browser inventor Marc Andreessen, Sequoia Capital, and Y Combinator.

“We’re really honoured to be working with them,” says Patrick. Adds John, “The investors are great because they just have so much data. And it’s pretty amazing to be sitting talking to someone who can say things in a conversation like, ‘Way back, when I was inventing the web browser . . .’ ”

The brothers were at university – Patrick at Harvard, John at Massachusetts Institute of Technology – when they came up with the idea for Stripe, which enables developers to immediately add a payments system to a website (“Stripe is about enabling people to get payments really easily,” says Patrick). They were sitting in a cafe in Buenos Aires when they got their first customer, which pretty much typifies what they see as one of the strengths of their company – Stripe and its employees can be anywhere, and so can their customers.

In some ways the company is like PayPal, in that Stripe manages the actual financial transaction for their customers, taking in the actual payments and then paying money into the bank account of the user – but they aren’t offering a service to buyers at all. Instead, Stripe freely gives code to developers so they can embed transaction capability into their website – and begin selling the minute after.

Buyers simply see a way of conducting a transaction with a credit card. Stripe’s developer users might be setting up a website for themselves, an individual or a company, and the brothers say the software has been used to do everything from selling yoga books and robots to managing an aircraft fleet. Sellers don’t have to pay Stripe anything up front. They pay a straightforward 2.9 per cent for each transaction, plus 30 cents.

The beauty for developers and sellers, the brothers say, is that they don’t have to go through arranging complicated business banking services in order to handle transactions, and they only have to pay Stripe if they actually make a sale. The beauty for Stripe – and no doubt a major attraction for investors – is that there is a very simple revenue model structured into every use of the service.

They say they came up with the idea for the company to try to address a problem they had themselves – online payments were complicated, and integrating them into a website was too. “It’s just what we wanted,” says Patrick.

Says John: “We didn’t really envisage what Stripe should be – we just built what we really strongly felt should exist.”

And although they make it appear simple, the problem they are trying to solve is, as John says, “a fairly hard and complex problem. It’s still quite abstract and ill-defined.” He thinks buying online should be as easy as paying in the real world with cash or credit card. Instead, online purchases demand that forms be filled in, which can discourage buyers and sellers.

“The infrastructure is very immature for paying for stuff on the net. They’ve basically taken the infrastructure needed to set up stores, and applied it to the internet.”

At the same time, it’s clear the very convoluted nature of the problem is exactly what energises the pair. They are irrepressible in their enthusiasm for the business they’ve created, but also love to talk about the abstract problems – the philosophy of online transactions, if you will.

They also can have a good laugh at occasional absurdities, like the time a woman called their support number and one of the brothers answered. “Oh, do you guys outsource your phone support to Ireland?” she asked.

When they first started to tackle the payments problem as a part-time interest at university, it didn’t take long before they realised how big a challenge they’d set themselves, or to discover there could be a start-up company hitched to finding a solution.

“When we started Stripe, it was this fun little side thing we did when we weren’t in classes,” says John. “After about six months, classes became this fun little side thing we did when we weren’t working on Stripe.”

Both are on leave now from their respective universities, and although they both say they loved their studies, their innate skill and success in building things that other people want to use may well sidetrack them permanently.

They are expanding rapidly. With the $2 million investment they received from their backers, they have gone from four employees at the start of the year to 17, and are beginning the search for a new premises. John says the investment gives them “runway”, but adds that they will need to go back for more money later on.

They love being out in Silicon Valley.

“There’s so many people here working on the next big idea. It’s a great culture to work in. There is this acceptance of mad ideas and failure,” says John. “The great thing about the valley is, we’re definitely not the wackiest idea here.”

Does he think their youth gives them the bravado to tackle an enormously difficult problem that might intimidate someone older and more experienced? “That might be the case,” he says, looking thoughtful. “I think it’s important to be in no way accepting of the status quo. It seems that is often correlated with youth.”

What do they like best about Stripe? “One of the nice things about Stripe so far is it’s a brilliant, growing group of people. One of the best things is I get to work with a lot of interesting people, a lot of them smarter than myself,” says Patrick.

Adds John, “One thing is the open-endedness of the problem – I mean really open-ended. No one has really been in this position before, so the problems you face are just hugely open-ended and very practical. That’s very satisfying.

“The other thing I personally enjoy is the opportunity to focus on one thing. Stripe is the only thing we do. The opportunity to focus on a hard problem 12 hours a day is really fulfilling. And it’s a joy to work with a combination of people you just immensely respect and really like.”