Growth strategies behind Stripe's $50 billion valuation
Hiya 👋,
I got really, really, deep into Stripe this weekend. All just to understand what strategies help them grow. And I'm so excited to share them with you!
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Everyone loves Stripe. And what’s not to love? The brand, the community, and mainly the product. They do their thing and they do it incredibly well.
Founded by two Irish brothers, Patrick and John Collison, Stripe has taken the fintech world by storm. It all started with an idea to make implementation payment processing easier for developers back in 2010, and today it is valued at over $50 billion! [1]
And we won’t be exaggerating when we say Stripe is one of the most anticipated companies to IPO.
Curiously, 8,100 of you search for “Stripe IPO” worldwide every month!
Let’s have a look at 5 growth strategies Stripe used (and a few of them still uses to grow) 👇
1. Wizard of Oz MVP
First of all, what does Wizzard of Oz have to do with MVPs?
It’s a name used to describe MVP strategy where you manually simulate part or full service instead of implementing the entire product so you can validate ideas and get early feedback from customers before large-scale development.
In the early days, when Stripe was in closed beta, the founders were working with a friend from a payment processing company to manually set up accounts for the first users. This way they could focus on API, interface, and collecting feedback before moving to the harder part.
2. Network effect
Stripe’s most powerful growth strategy has been simply a great product.
They knew who their audience was since the beginning (developers) and understood what they really cared about - simplest payment implementation, good documentation, continuously improving the product, and exceptional performance.
And they delivered.
This caused something that the founders didn’t expect - the network effect. The product was so good at solving problems that people started recommending it to their friends. A lot.
Patrick Collison once said “…to rely on your users to grow is a great way to keep yourself honest.” [2].
3. Infiltrating external communities
Being where your target audience hangs out pays off! Finding online communities and increasing presence there is a powerful strategy to get your brand noticed.
The first year after the public launch, Stripe started running ads on Stack Overflow. Not only that, but Stripe employees would also go and answer questions! Once the product becomes more popular, you can rely on your community to answer.
4. Contest (aka Hackathons 👾)
A great way to increase brand visibility is to start a contest!
Stripe held the Capture the Flag 2.0 Hackathon in August 2012, targeting software engineers and offering what all of us in tech want the most: a branded T-shirt. And it worked, of course 😏.
With 4,500 sign-ups in the first 6 hours, Stripe increased visibility within the developer community and created excitement around the brand. [3]
5. Community building
Stripe's mission is to increase the GDP of the internet (so cool, I know).
And that’s why you see Stripe heavily investing in the education of future and current entrepreneurs so more and more online businesses are being created. Which, not quite accidentally, leads to more Stripe customers.
They publish numerous resources to learn about tax, how to fund your startup, pitch to investors, and more.
But went as far as acquiring the Indie Hacker community back in 2017, which grew to over 140.000 members [4], and started their own publishing company, Stripe Press, to publish entrepreneurship books like High Growth Handbook and more.
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And that’s a wrap for today's growth secrets of Stripe. Let me know if you enjoyed the newsletter and what company I should look at next!
