Patrick Collison: belief

Transcript context

…When you think about the fact that moats are overrated and just doing the thing is underrated, what is Stripe's mode in that context? Does that make you think differently about Stripe's mode? Yes, I do think that one can have organizational and cultural moats. Maybe this contradicts what I was just saying, or it's consistent with it in the sense that it's a kind of cultural explanation. In as much as we have a moat, it's because we have a very good understanding of our domain. We have a set of people who actually care about solving the problems, who are continually paranoid at the prospect that we might be forgetting something important. So we are trying to figure out what the important thing that could supplant Stripe's approaches is, and make sure that we build that first. You're familiar with Conquest's laws. There's Conquest's third law, which is that: "One should model organizations as if they're run by a cabal of their enemies." Presumably it's tongue in cheek, but it's interesting to try to think: "Well, what is the kernel of truth in that and why would it be there? " I think what's going on is: most organizations, when they start out, are actually trying to achieve their stated goals. Somebody started the organization for a reason and probably it was for the stated reason. But then over time, that person and that set of people who initially populated the organization depart and some set of new people come to take their place. And there's multiple iterations of that, there's generational turnover on a continuous basis. But say, for the fifth generation: Why are they there and to what degree do their particular incentives align with the originally stated goals of the organization? There can be a lot of misalignment there, where they're following a local path, conceivably even the leader of the organization does it, not necessarily through any fault of their own. They're human and they have their own incentives and again, the original, constitutional incentives of the organization might be quite different. This phenomenon is a fact of life and for me these kinds of explanations are much more useful in trying to figure out why some of these things either happen or don't. And to your question: "In as much as Stripe has a moat, what is it?" Others can judge to what degree it's actually manifested and rooted in practice. I think it is, but I'm a biased observer. I think it would be, that people at Stripe really care about solving the problems that we say we are trying to solve. Yeah, the point about the misalignment over generations or over time is interesting. Do you have examples of institutions, which have for decades or centuries managed to keep their original, not only mission statement, but organizational competence? Because if you think of tech companies, even the oldest ones have not been around that long, right? And they're some of the biggest tech companies in the world. And the median age of the corporation is famously low. What is a good example here? Patrick Collison 00:50:48 Some of the explanations around the effects of shareholder capitalism suggest that it influences the incentives of organizations and their long term fates. Those theories have some credibility and it’s plausible that shareholder capitalism even attenuates the duration of some of these organizations. I'm not saying that's definitely true, but I find the idea that it could be, incredible. It's unclear if that's necessarily bad if it is true, right? In that, are we on the side of the humans, aggregate innovation in the world, or corporations, or quad legal entities? The answer isn’t clear to me. It should be the third. At the same time, if you look at Europe or places like Denmark, because of the tax code there, a lot of organizations are either controlled or substantially held by non-profit foundations. For example Novo Nordisk – the GLP company, Maersk – the shipping company, I believe also Lego. A lot of these corporations are controlled by foundations and usually have a lot of their stock held by them. In many cases that has the secondary effect, where they actually embed their mission into a legally binding constitution. I'm not an expert on Novo Nordisk, but I happened to get a book about it over Thanksgiving and there’s also a book on the Danish Industrial Foundations. It's enshrined in their constitution that they have to make insulin broadly available and really cheap or at least that is the case in Scandinavian countries. So it is allowed to charge market prices elsewhere but they're legally obligated to reinvest profits in R&D. Is that somehow causal in the fact that they made one of the most remarkable pharmacological discoveries of the last 20 years: GLP-1 agonists? – Plausibly. These questions of “Why is it that the median age of organizations and corporations is what it is?” are definitely interesting and I suspect the reason is somewhat dependent on the way we've chosen to organize large corporations in the US today. The thing you're mentioning about this firm seems very similar to the export-led growth in Asia.…

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