The Start:

The start of Stripe's venture traces back to brothers Patrick and John Collison, both of whom had a background in software development and entrepreneurship.

Patrick attended MIT, while John attended Harvard, though both dropped out to focus on entrepreneurial pursuits.

Their previous startup, Auctomatic, was sold for $5 million in 2008, providing them with valuable experience in the tech industry and e-commerce.

The Problem:

The problem they identified was the cumbersome and fragmented process of accepting online payments, which often required businesses to navigate a maze of complex systems and banking regulations.

They realized that simplifying this process could alleviate significant pain points for online merchants.

By creating Stripe, they aimed to develop an easy-to-integrate and developer-friendly payment processing solution that would streamline financial transactions and enable businesses to scale more efficiently.

Getting their first customers:

For the first two years, Stripe had no real financial infrastructure. Patrick had a friend at a payments gateway company whose API was notoriously difficult to use.

To address this, Patrick and John created a much simpler set of APIs, reducing the setup process to just seven lines of code that any developer could implement in under a minute.

On the backend, whenever someone signed up for Stripe, Patrick would call his friend, who would set up a merchant account for that user.

Essentially, Stripe transformed those complicated APIs into something more understandable and quicker to implement.

Stripe’s first customer was Ross Boucher, a friend from the early YC days and the founder of the Web software development company 280 North.

Ross eventually became Stripe's first employee, signaling strong confidence in the product. The next 20 users were also from other YC companies. When someone agreed to try Stripe, the team would set them up on the spot using their laptop.

Garry Tan, a YC partner at the time, helped Stripe further by posting a request on HackerNews, inviting those who needed online payment solutions to contact the Stripe team.

This post resulted in an estimated 300 to 550 signups on their waitlist. By the end of the summer, Stripe had around 1,000 signups on their waitlist, as they had to manually handle all account creation processes.

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