00:00hi everyone welcome to the a6 & Z
00:02podcast I am sonal I'm here today with
00:04our general partner and fin tech expert
00:06Alex rampell and our guest is Patrick
00:08Collison who is the CEO and co-founder
00:10of stripe which is a payments platform
00:12built to enable developers and other
00:14people creating apps or websites to
00:16programmatically move money around they
00:18are part of a larger wave of companies
00:20in the so called API economy where
00:22application programming interfaces
00:24become the primary sort of storefront
00:26for business in this episode however
00:28we're if hallway style in a conversation
00:30recorded a while ago on everything from
00:32why marketplace businesses matter to
00:34what happens when non software
00:35businesses and our economy are
00:37increasingly run unquote technologically
00:39enabled rails 2 leading and lagging
00:41indicators of the end of cash to
00:44liquidity geopolitics and trust and more
00:47welcome guys thank you thanks army I
00:49increasingly think about stripe as being
00:51the operating system for commerce what
00:54do you think about the future I mean
00:56what how do you think about where do you
01:02go now if you if you have 99% of all
01:03startups using you what do you do next
01:05the way we think about it is that as
01:07sort of a corollary of software eating
01:09the world and is that the economy is
01:12sort of increasingly coming to run on
01:14technologically enabled rails and it's
01:17not necessarily the case it's all kinds
01:18of commerce or every part of the economy
01:20is going to become orchestrated by
01:21specifically a technology company but it
01:23is going to be sort of significantly
01:25technology Andy both there's almost
01:27certainly some part of the supply chain
01:29of the process or the part of the
01:30service that's going to be substantially
01:32changed by software why does the money
01:34part of matter so much
01:35why is pizza business being built on
01:37technological programmable money rails
01:39are important don't you just hand cash
01:40over when they deliver good question so
01:42I think broadly speaking the first
01:44generation of Internet companies were
01:45largely able to rely on advertising if
01:48the business model right who is sort of
01:49a very basic kind of monetization of the
01:51attention and so that's GC and Yahoo and
01:52google and facebook and and and so forth
01:55and I think in some sense we thought
01:57that advertising with the default
01:58business model for technology companies
01:59but actually it's just kind of an
02:01operation in the long scheme of things
02:03because the default business model of
02:04the economy is you pay for things it's
02:07the whole premise of advertising is that
02:08like ultimately if nobody was paying for
02:10the thing then there would be no
02:11advertise I mean everything is kind of
02:13upstream from from that end payment
02:15absolutely and to be clear I think
02:16advertising will remain not only a large
02:18but even a sort of an increasingly large
02:20industry but in the scheme of things are
02:22to be a small fraction of the economy
02:24you have a credit card and somehow that
02:26needs to become money in your bank
02:27account you need some kind of rails to
02:29do that increasingly what you're seeing
02:30is people to do interesting things with
02:32the with the business models that they
02:34don't just need something to turn a
02:35credit card number into money in the
02:36bank account but they need sort of
02:37ancillary functionality around us right
02:39and so very obvious and kind of striking
02:41and indeed fast-growing example are all
02:44these mobile marketplaces where it's not
02:46merely about accepting the payment but
02:48it's also about sort of coordinating
02:50this network of sellers and figuring out
02:52how to get the money to them and
02:53handling the identity verification the
02:56tax that goes alongside that and then
02:57figuring out how do you do that in
02:59multiple countries these companies
03:00increasingly airlie go and address
03:02global markets and then you know you're
03:04you're up and running paying them and
03:06you to figure out well how do we get
03:07them the money faster we worked with
03:09lyft like a couple months ago to relish
03:10Express pay where rather than just kind
03:13of sending money to their drivers via a
03:15bank transfer they can send it
03:17instantaneously to their driver is kind
03:18of directly over debit card rails and
03:20now almost half of their drivers are
03:23using mash like so in the blink of an
03:25eye they shifted from these bank account
03:26rails to getting paid you know instantly
03:28because that's handed in your hand but
03:30electronically right so I think that the
03:32general pattern here is that as these
03:34companies expand out from the internet
03:36into the rest of the economy that the
03:38proverbial kind of bits to atoms the
03:40business models are becoming more
03:41complicated more interesting more
03:43payment base when we first but I think
03:44was probably five years ago where we met
03:46yes in Palo Alto on a Saturday or a
03:49Sunday and and I asked you you know who
03:52will your customers be because it's
03:54gonna be really hard to get Walmart to
03:56switch there require and all this and I
03:57remember exactly what you said they do
03:59not exist yet a lot of my customers do
04:02not exist yet it was actually around the
04:03same time I wrote a TechCrunch article
04:04and I coined this term Oh - OH
04:06online to offline which by the way is
04:08very popular in China I've heard and
04:10what's really interesting is when you
04:11think about mobile the idea of paying
04:14for something actually electronically
04:16without ever really exchanging a
04:17physical payment in a tender type of any
04:19way shape or form that's become very
04:21mainstream now this is really
04:23interesting but just concretely what
04:24does it mean for me as a
04:26person trying to pay and transact in
04:28these marketplaces like what are some of
04:29the things that you know payments can
04:32help me with next why I've always
04:33thought there are two main problems with
04:35payments that the first is the Pajama
04:36problem were you're upstairs in your
04:38pajamas it's even worse now because now
04:41you have a mobile phone that's with you
04:4224/7 and your payment method is actually
04:45downstairs 94% of people use their
04:52phones while they're on the toilet and
04:53the other 6% are lying right people have
04:56their phones with them all the time The
04:58Pajama problem is a real one because it
05:00actually means the Commerce doesn't
05:01happen because I don't have my payment
05:02instrument or I don't have my payment
05:03types stored within an app or within a
05:05retailer or something like that the
05:06other problem I called the Costco
05:07problem where if you go to Costco 2:00
05:09p.m. on a Saturday the problem is
05:11actually it's not paying that's like you
05:13just dip your card or swipe your card
05:14that's very easy the problem is and then
05:17it takes like five minutes the problem
05:21is actually waiting in line to pay
05:23that's the problem and literally it can
05:26take half an hour and the way the reason
05:28why you abandon is not because you don't
05:29have your payment instrument it's right
05:31in your pocket it's completely different
05:32than pajama problem the reason why you
05:33don't pay is because you don't want to
05:35wait in line for half an hour and you
05:36have to go somewhere so you just run out
05:38at Costco without pain I've actually
05:41seen this you see carts that are fully
05:43stacked with items why would people
05:45leave once they did you're right am i
05:49doing every time I go to Phil's coffee I
05:51use order ahead and you're actually
05:53solving the Costco problem for me
05:54there's like a basic question of should
05:56we have to go to stores and in which
05:58cases do we have to go to stores or
06:00cases is the thing going to come to me
06:04and that's a relic of the past
06:06limitations like we might have new
06:08things possible now absolutely and like
06:10what what does it mean to transact with
06:12Costco and and just how anachronistic is
06:15the whole notion of a single store going
06:17to look in 50 years maybe you go maybe
06:19it already knows what you're going to
06:20order maybe you have already ordered
06:23you've you know you you've a profile set
06:25up various versions like this and so I
06:27think there's actually it was average
06:28binary distinction before between your
06:31phone someone and they deliver it or you
06:34go to a store and you queue for
06:35essentially unbounded amount of time and
06:38now various other points
06:39continuum or possible and I think we are
06:42seeing far more of those crop up on a
06:44monthly basis it's a whole new ecosystem
06:46or seeing a lot of the large companies
06:48they may not be software companies at
06:50the core of their DNA but they generally
06:53are customer experience companies at the
06:56core of the DNA because if they weren't
06:58they play haven't survived until now so
07:01we've found they're very attuned to just
07:03what makes this better for the customer
07:05those companies come to us and say hey
07:07we want to enable this too we know that
07:10this isn't necessarily easy given our
07:12existing model our supply chain dynamics
07:15and so on but it's very clear to us that
07:17it is substantially suboptimal to be
07:21queuing in line do you have any
07:22interesting numbers to share about and
07:24how do they sort of reflect on like
07:26what's what's happening I think the the
07:27big trend is his shift of technology
07:30fracking into other industries
07:32interesting in fracking in the oil and
07:36yes that's perhaps overly dramatic but I
07:39think it gets at the idea of sort of
07:41this expansion out into the places for a
07:43kind of technology has not traditionally
07:45been deployed I went to get a cup of
07:47coffee right and you don't think of a
07:48cup of coffee as being something
07:49intrinsically a technological problem at
07:52heart and yet because there's a long
07:54line at Phil's in Palo Alto I used the
07:57order a head app to go in to order my
07:59coffee so I could just walk in pick it
08:00up and kind of proceed here we're then
08:02seeing then our data is this happen so
08:04broadly and in so many sectors and kind
08:07of parts of the economy that people
08:08really don't traditionally expect we're
08:10all sort of familiar with the most
08:11prominent examples in the form of the
08:13ride-sharing and the burgeoning number
08:15of mule delivery companies and so forth
08:17you know the problem of pest control is
08:20being turned into a marketplace problem
08:23or the problem of child care all these
08:25things that can I when you zoom at
08:26involve a significant coordination
08:28problem or some information asymmetry
08:30where reputation systems consider be
08:32brought to bear to make the service
08:33better so we're seeing a huge amount of
08:35that sort of substitution happen or kind
08:38of that that again deep technological
08:40diffusion I think a lot of that it's
08:42both leading and lagging indicators of
08:44the end of cash the fact that people got
08:46comfortable experimenting with credit
08:49with plastic mean back in the 40s in the
08:5150s and so on and so forth that enabled
08:53a lot of these early marketplaces to
08:54develop and the fact that more of these
08:55marketplaces exist that do not take cash
08:57because it's not practical has actually
08:59yielded it just becomes this virtuous
09:01cycle I was actually talking to somebody
09:03who asked me why in the world do so many
09:07bonds now government bonds have negative
09:10yield and I'm starting explaining to
09:12them maybe like why not test to take out
09:13cash is like okay well let's just say
09:14that you want to actually take paper
09:15currents right because in both cases
09:17like with negative yielding debt you
09:19have inflationary pressure I'm unless
09:20it's a deflationary economy that happens
09:22in Japan and whatnot you're gonna lose
09:23money to inflation but you're also going
09:26to lose money to that negative yield if
09:27you get paper currency while you have to
09:30store it you have to insure it you can't
09:32just put that in a bank account because
09:33then you're a creditor of the bank
09:34solely so like that this is another
09:36reason like a number of countries have
09:37actually enabled not just a thought
09:39experiment but like real thinking of if
09:41you want to have if you want to spur the
09:43economy either with helicopter money or
09:46maybe you say okay unless you spend the
09:48money in your bank account it will
09:49become less money every month that's a
09:50way of spurring the economy well if you
09:52have cash and you can put it in a vault
09:54and you actually trust the protection of
09:56that vault then that actually interrupts
09:58this whole this whole monetary policy
10:00that the government want to actually
10:01engage in so you know there's a
10:04legitimate case that cash like a lot of
10:06people want cash to go wait like the
10:08people that want cash to stay or the
10:09drug dealers and the people that are the
10:10members of the underground economy
10:11governments like they used to control
10:13the money supply very very strictly
10:14they're the only ones that can print the
10:16cash in every sense of the word
10:18both like real cash and like you know
10:19qe2 kind of cash but then you also have
10:22this very interesting paradigm right now
10:23of the people that are controlling the
10:26commerce supply are not the government I
10:28mean I it's actually people like you
10:29they're more more so than than a
10:30government well I think I think there's
10:32gonna be fascinating a natural
10:34experiment transpiring here I think it's
10:37going to be very interesting to see what
10:38that elasticity looks like as you
10:40proceed past how negative can interest
10:42rates get right and then of course
10:44macroeconomic significance but I mean
10:46III think there's multiple different
10:48ways in which thought change technology
10:50could be interesting but obviously as
10:51kind of an outlet such that this
10:53transport level substitution for like
10:55physical cash to digital money that that
10:58does not necessarily lose some of the
11:00bearer properties of cash so that as we
11:03see kind of macro and I policy change
11:06you have as someone just like holding
11:07money you don't substantially diminish
11:09having said that you know the thing that
11:10I've been thinking a lot about of late
11:11and that I I really don't have an answer
11:14to is the nature of interest rates
11:17themselves as a driver of investment and
11:20as a lever for the economy overall the
11:23basic syllogism of you know interest
11:26rates and post-world war ii ii economic
11:28policy has been that because most
11:30innovation and most projects and most
11:32wealth creation is substantially capital
11:35constrained that by lowering interest
11:37rates you drive more of it to happen and
11:39more things get built or railway lines
11:43or lay down or whatever the case is and
11:45that as more of the new wealth that we
11:48create comes to be bound by people or
11:51the capital kind of in in the human
11:54capital sort of in terms of education or
11:56the or their geographic placement and so
11:58on like why aren't we developing ideas
12:01or new things twice as fast as we are I
12:03mean I think it's lesson that we don't
12:05have enough capital it's more that we
12:06don't have the right people or the right
12:08people in the right places and so on to
12:10just circle back to original point where
12:12it's less about interest rates
12:14themselves I think being the primary
12:16lever here or the thing I was wondering
12:17about under the drive over is our house
12:20prices the new interest rates because
12:22that determines to a large degree where
12:24people can be and who can work together
12:26and what ideas they can work on and so
12:28forth or is the combination of house
12:30prices and immigration policy yeah
12:32there's a lot tied up in here about that
12:34you know money is a proxy for movement
12:36but I want to go back to an idea that
12:38both of you kind of alluded to about how
12:40we now have this ability to essentially
12:42turn things into marketplaces in ways
12:44that they weren't before yes
12:45and Alex you talked about how these
12:47things are now happening outside of
12:48centralized government control I'm still
12:51not clear on why that really matters I
12:54think would be a very very bad idea in
12:56the United States of America to grow no
12:58food in the United States even if you
13:01know just efficient markets and lower
13:03cost of labor elsewhere but you have
13:05this kind of stochastic negative
13:06externality if suddenly we can no longer
13:08trade I mean free trade is great until
13:11it doesn't exist or until you have
13:13conflicts that emerge which potentially
13:15do this is geopolitical risk if you have
13:17all of your food grown else
13:19that could be a very bad idea and and
13:22likewise centralized routing in another
13:24country even if the country is actually
13:26temporarily friendly and these kinds of
13:29things there just weren't relevant
13:30before it because you didn't have this
13:31idea of centralized routing taking place
13:33in one country versus another country
13:35it's not just payments it's everything I
13:36mean you see this with Crimea where
13:38Putin annexes Crimea part of the
13:40sanctions that the United States
13:41government passed to kind of penalize
13:44Putin is to say that transactions can no
13:46longer happen in Crimea that are
13:48centrally routed in San Francisco or New
13:50York and that could have never happened
13:52he's like again it's not the money
13:54supplies on m1 m2 m3
13:55it's the commerce supply you know and
13:58somebody mentions stochastic negative
14:00externalities that we've gotten to the
14:01good part of the podcast but I think
14:08this is a big issue in well inhuman
14:11systems in general right and that the
14:14centralization sort of afforded by
14:16technology and and the kind of
14:18standardization and the interdependence
14:20and the connectivity I mean there were
14:22no rolling blackouts in the Northeast
14:24back before the invention of the
14:26electric grid there was never like a a
14:28coupled coordinated failure all the
14:30lights did not go out and in every town
14:32in the Northeast there is no place for
14:34things to cascade to I fell before they
14:36would just be contained at the first
14:37level yes yes and so I think that
14:40negatively skewed risks and you just
14:42start to become more concerning those
14:44obvious kind of economy the scale and
14:46benefits connect all these systems
14:47together and instead of building things
14:48that spend that lobe complex systems
14:50have surprising emergent behavior
14:52exactly and you can't read the cause and
14:55effect any longer you can't even figure
14:57out the ideology of where something
14:59happened and precisely yeah a good
15:00example of that is we have the quote
15:03unquote kind of system of the global
15:04economy and then some surprising kind of
15:06action happens in us like Russia invades
15:08Crimea which is really not something
15:10that had been anticipated not like an
15:12obvious consequence of this is to me
15:13you've kind of a particular coupling of
15:16domestic policy and foreign policy and
15:18monetary policy and so on I mean the EU
15:21is a good example of this of how with
15:23the Euro giving up some interior you're
15:24no control over fiscal and more monetary
15:27policy like it also affects your your
15:30domestic policy and but I think it's
15:32actually more a property of just like
15:34general global connectivity and vanish
15:36is kind of something unique to the
15:38economy itself but it's totally
15:39something that keeps me awake it yeah
15:41well and not literally I guess in that I
15:46think there's a good chance that some of
15:48the things that we see happen over the
15:49course of our lives will have been some
15:51sensory problems of this general class
15:53of just surprising how come this from
15:55our increasingly complying systems Ben
15:57Horowitz made a comment a couple days
15:58ago like there's no like local search
16:00engine just for the Wyoming market
16:02there's no concept of building a local
16:04technology company doesn't make any
16:07and as you actually as the world is flat
16:09for in terms of distribution of
16:10technology you have these little cliques
16:12that have self-interest that might
16:15I think the Erie has games it creates
16:17robustness it also sometimes his
16:19regulatory capture I think the EU is
16:21very jealous that Google is not a
16:22European company I think they're jealous
16:24that apples not a Europe like Google is
16:26bad in Europe and my personal opinion I
16:28don't think they're nearly the
16:29monopolist that Microsoft was like in
16:31the late 90s but there is a certain
16:33sense of jealousy like they they almost
16:34do operated in facto monopoly in terms
16:37of people searching for things but the
16:39thing that technology has taught us is
16:41that a monopoly business in technology
16:43that's not a 50 year monopoly and I just
16:44want to make the point too that people
16:46often forget when they talk about
16:47anything anti-competitive is that if it
16:49benefits consumers as long as consumers
16:51get something out of it that's not anti
16:52consumer interest free market forces are
16:55the best way eventually spurring
16:56innovation I think the way that they
16:58become anti consumer is they become lazy
17:00and become lazy because they don't have
17:02sufficient competition and they don't
17:03necessarily have sufficient competition
17:05because they're being evil I'm to quote
17:08the Google phrase never attribute to
17:09malice that which can be attributed to
17:11stupidity there was a comment that I use
17:13a lot which is you know the battle
17:14between every start-up and incumbent is
17:15whether the startup gets the
17:17distribution before the incumbent gets
17:18the innovation and normally the
17:20incumbent wins they get the innovation
17:22might take them five years I mean I'm
17:23sure that there's some mobile bank
17:26startup that's gonna have a much more
17:28beautiful app than Wells Fargo's but
17:29Wells Fargo within the next seven to ten
17:31years will come up with something as
17:32good and they've got that distribution
17:33but so far what I'm hearing is when you
17:36guys are talking about marketplaces that
17:37is essentially just just intermediating
17:39existing things we're not hearing about
17:41what's new and possible that hasn't been
17:43done in like safe physical world and
17:45secondly we're also not here
17:46about what the benefits are what's
17:48possible on top of it what you need is
17:50you need you need trust in a way of
17:52actually resolving trust and resolving
17:54payment and that's that's what enables
17:56commerce so there are a lot of things
17:58that can now happen like well I'll give
18:00you an example the problem is that right
18:01now like if you want to go get a plumber
18:03to fix your toilet there's an asymmetry
18:05of information like what's wrong with my
18:07toilet I don't know I don't know how to
18:08explain that canonically and then I
18:10don't know if the plumber is any good
18:11and if you think about what Expedia did
18:13they sell them much much easier problem
18:14is they rated hotels now every five-star
18:17hotel is not the same every three-star
18:19Hotel is not the same but there's not
18:21really there's not really a lot of
18:22confusion between one-star hotel in
18:23five-star hotel you can see the
18:25liquidity you can see which rooms are
18:26available you can handle payment you can
18:28handle trust you know that the the hotel
18:30will actually have a space when you show
18:31up there the thing that a lot of these
18:33marketplaces are allowing is trusts
18:35payment standards and liquidity because
18:37I can click a button and then boom I
18:39have one unit of plumber fixes my toilet
18:42goes to your point by the information
18:43asymmetry information asymmetry is a
18:45huge one that has nothing to do with
18:46with payment but like you need each one
18:48of those to come in and sometimes this
18:50is an intractable problem because if I
18:52say I want one unit of move from place a
18:54to place B well there's a lot of
18:56information asymmetry there how do you
18:58reduce that to ask you you can't reduce
18:59that to askew it's a hard hard problem
19:01to solve but you see it done vertical by
19:03vertical you don't have any any
19:05horizontal services market place despite
19:06the fact that Amazon's trying to do that
19:08but like I think you'll see hundreds of
19:09these that what each tackle different
19:11problems and I think this can
19:12substantially grow the economy because
19:14you're competing with nothing right so
19:15there's kind of the bucket of things
19:17that are is about why bringing
19:18technology to bear on non technology
19:20problems is good there's this that
19:21bucket I think you know the world
19:24broadly speaking accepts that one and
19:26then there's kind of structural question
19:27yeah of sort of why our marketplace is
19:30good what good does that reduce for
19:31consumers the core of the matter is how
19:34much inefficiency the rigid hierarchy of
19:39the non marketplace solution introduces
19:42because so much of the world is it you
19:46know if you kind of squint to this from
19:47one particular perspective is about
19:49solving an information problem I'm not
19:51even going to call it an asymmetry
19:53because asymmetry may sounds kind of
19:54it's overly diminutive and it's actually
19:56like an information chasm there are so
19:59many people in the world
20:00with the talents and the ability and the
20:03kind of willingness to go into solving
20:05that hunger problem for you know in
20:07return for you know some degree of
20:08compensation right but because it's
20:10difficult to find those people we have
20:12to all put them in the same place and we
20:14have to get all this you know food into
20:15this warehouse and all the seven and and
20:17then be kind of designated a restaurant
20:18but sit in some view of the world like
20:19it restaurant is to solve the
20:21information problem so you know which
20:22people to go to and when and how in
20:25order to sort of solve this particular
20:26problem you have and so marketplaces are
20:28kind of an alternate cut on this where
20:30it's like well we can pursue much more
20:32peer-to-peer much less centralized model
20:34and in the same way that the
20:39internationally rather than having to go
20:41through the intermediary of the library
20:43it's also like a transaction is
20:45happening where before there is none the
20:47economy becomes higher resolution right
20:48oh that's interesting you're thinking
20:50about it you know Dan Ariely this
20:51behavioural economist he gives this
20:53example of like two universes that exist
20:55universe one locksmith comes like you're
20:57locked out at 2:00 a.m. he lets you in
20:59in one minute and charges you $400 and
21:01you are outraged 400 ollars for a minute
21:03like what an a-hole can't believe this
21:04leaves a you know you'll leave a
21:05one-star review on Yelp and say I'm
21:07never going to work with this person
21:08again university exact same situation
21:10locksmith shows up works for eight hours
21:12to try to let you in goes back to his
21:14office at 10:00 a.m. drives back finally
21:16lets him in 12 hours later you were
21:17actually happy you give him a tip he
21:20worked for 12 hours you're paying for
21:21incompetence and this is the problem of
21:23the information chasm or the information
21:25asymmetry which is when you create this
21:26objective like you don't want to pay by
21:28time that might be okay when you
21:30actually have Google Maps routing you
21:32correctly mm-hmm which it doesn't always
21:34do but it's not okay when you're going
21:36to things that don't really have an
21:37objective measurement score like fix my
21:39toilet yes and and again I think in the
21:42same way that there's a question about
21:43do you think that the inefficient
21:45hierarchical solutions that we have to
21:47resort it today are they somewhat less
21:49efficient or an order of magnitude less
21:51efficient than the optimally efficient
21:53and networked versions that we can
21:54hopefully now create I think in a
21:56similar way there's the question of how
21:58problematic is it that in so many of
22:00these transactions and so much of this
22:02work the way through and of a good
22:03feedback loop we don't have good
22:05measurement and kind of quantification
22:06right part of what ended the great leap
22:08forward in China you know it wasn't sort
22:11of a technological innovation and it
22:13was a change in the coordination model
22:16where people got to farm their own plots
22:18I want to ask one final question which
22:20is so why does money matter in these
22:22marketplaces is the only goal of money
22:24to reduce friction and to get people to
22:26transact I mean like truly it sounds
22:28like an obvious question but why does
22:29the money movement matter
22:31you had barter a long time ago I would
22:32trade Patrick my five chickens for his
22:35one goat and that's that's how we would
22:36deal with things but the problem was it
22:38was very very difficult to partition a
22:39goat not so much a chicken for a house
22:41because you know those are worth less
22:42than one goat and then ultimately pizza
22:45that's quite easy to participate that's
22:46true then we moved to gold I mean we
22:49moved two different forms of currency
22:51then eventually we moved to fiat
22:53currency and that's just it's a lot more
22:55efficient I don't think it's actually
22:56necessary for it I mean people rely on
22:58this notion of liquid currency whether
23:00it's digital or cash that's how people
23:03trade goods and services it's not barter
23:05but I think ultimately you know it's
23:06trust its standards and perhaps
23:08standards is a variant of trust
23:09liquidity is what actually makes a
23:11marketplace successful and why you have
23:13Network effects take hold but it's the
23:15trust that I know that something will
23:17actually happen and therefore I'm
23:18willing to give up the payment but
23:20they're also interconnected I mean
23:22knowing that I would get paid quickly
23:23and promptly it just it boggles my mind
23:25that eBay started as eBay without the
23:29PayPal part built in oh I know that's
23:31crazy they had their own bill payment
23:32thing that they developed later which
23:34which didn't really work in that's why
23:35they bought PayPal but it was all Co D I
23:36mean I bought something on auction web I
23:38think it was in 1996 and a lot of times
23:41you'd really rely on the the kindness of
23:43strangers to pay you or like they would
23:46send you the money first and then you
23:47would ship the item and that just wasn't
23:49really sustainable it just shows that
23:50how Trust and payment are inter woven
23:53well that's interesting so payment is
23:54almost a proxy for truth because I'm
23:56yeah how much did I pay grow when I mean
23:58there many reasons why they grew now the
24:00fact that people actually use the
24:01internet more people use the Internet in
24:022000 versus 1996 that's a good one but
24:05the fact that payments actually became
24:07easier payments and trust or commingled
24:09why does money matter
24:10yeah and Beyond the exhibition
24:11existential question of it like in the
24:13marketplaces right economists literally
24:15debate this question and have been doing
24:17so for decades and so I don't presume to
24:18be able to you know shine particularly
24:20novel light on it I think that as a
24:22ledger and a scorekeeping mechanism for
24:25value created the big
24:27and come back to our notion of incentive
24:29structures and information flow that
24:31helps us keep track of value creation
24:33it's not just a useful work of a
24:36necessary tool and probably we could
24:39spiral off into the philosophical depths
24:41here very easily but I think there is
24:44something important where two sorts of
24:46economic systems we can have we could
24:48have sort of a a fundamentally
24:49distributive or redistributed or
24:52apportioning oriented system right or we
24:55could have one more like money where
24:57it's inherently limitless right just it
25:00is numbers and I think that's in some
25:02way more optimistic in the sense that
25:04there's no cap on how much can be
25:08created or accrued there's a book that I
25:11take every opportunity I can find to
25:13recommend and the beginning of infinity
25:15by David Deutsch I think it's really
25:17great part of the book is elucidating
25:20different kinds of incipient infinities
25:23are we asymptoting to some limit or are
25:26we go on the early part of the curve
25:28towards something more you know
25:29substantially unbounded and so anyway at
25:32least on the question of if you look
25:34back a thousand years many things exists
25:36and happen and are available to us and
25:39are possible that we're not previously
25:40and I think we're still in the earlier
25:42side of that curve and so anyway as a
25:45scorekeeping mechanism for our progress
25:47along that trajectory I think money
25:49works pretty well there's two visions of
25:51the future of the internet there's one
25:52where we've mostly invented the things
25:53kind of thus far and the story of the
25:56next 20 years is going to be that of the
25:58existing Giants becoming bigger and
26:00there's kind of an alternate perspective
26:02on where we're kinda like the Jeff Bezos
26:04quote that it's still day one and the
26:06vast majority of the businesses that are
26:08going to be huge in 20 or 30 years are
26:10yet to be started right in Carlota Perez
26:12terms it's like the deployment phase we
26:14weren't around for a lot of the first
26:17chapter of the rise of the
26:21internationally has been very noticeable
26:23just how much the rest of Corporate
26:26America has woken up to the fact that
26:28software enabled experiences are going
26:31to eat the world and non software
26:33companies now really do get this that's
26:36great to hear well you guys thank you
26:38for joining the a 6nc podcast thank you
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