Good morning from San Francisco. Yesterday was the first day of Stripe Sessions, their annual conference. Sessions is huge. Stripe is powering a growth market, and the co-founders (and Mark Zuckerberg!) shared a lot of insights on the future of the internet economy.
Stripe processed $1.4 trillion of payments in 2024, including most subscriptions to the fastest-growing companies and all 78 of the “top 100” AI companies accepting revenue.
I was impressed with Patrick and John Collison’s presentations. The brothers are Stripe’s co-founders and CEO and President, respectively. I was greeted at my seat with a printed copy of their Annual Letter, packed with data and insights from their platform. It’s really well done.
Stripe has a trove of data. They can see which companies, categories, and cohorts are doing well and they can see it in real time. Their ability to identify “breakout companies” (those who get from $1m to $10m ARR quickly) is noteworthy.
“Vertical SaaS” as a growth area particularly caught my attention. 60% of US small businesses use vertical SaaS platforms. Industries from arborists to liquor stores to pool cleaners use industry-specific products. Businesses using vertical SaaS powered by Stripe earn about 60% more than their peers. John noted, “markets reward specialization.”
There was a lot of talk about AI, including from guest Mark Zuckerberg. John “vibe coded” a live demo using Cursor, and it was cool, but I struggled to see the point. Cursor takes payments through Stripe but isn’t a Stripe product, and it’s very cool, but likely most attendees have used it. Software engineering may be one of the industries most impacted by genAI, but it’s a small percentage of overall jobs.
Meta is spending $50bn+ a year on CapEx on genAI, and Mark Zuckerberg wasn’t going to do anything other than announce it’s the future. And maybe it is. But Mark acknowledged an “AI bubble” for the first time that I’d heard, and it was noteworthy that Stripe Press published a book arguing bubbles aren’t necessarily bad. Maybe they’re right, but 6 months ago, nobody wanted to admit there was an AI bubble.
AI agents and the Model Context Protocol (MCP) that enables this got a name-check. You can see how Stripe could offer a robust MCP integration for convenient LLM interaction. Does anyone want that? We’ll find out. I love building AI solutions and have been doing so since before it was cool at Ellipsis. For me, agentic AI is kinda interesting, but the UI for using this (through ChatGPT or Claude) is awful, and you require a lot of skill from the user to use it effectively. Faced with that, you can get the same result without agents.
Stripe is a juggernaut. Sessions is huge. We’re hearing 60 major new product releases this morning, including some crypto stuff that might make sense. Looking forward to it.
