---
author: a16z
date: '2026-09-03'
guest: ''
layout: post.njk
source: https://www.youtube.com/watch?v=J3pegsM5drk
speaker: a16z
tags:
- payment-system
- agentic-commerce
- consumer-behavior
- financial-technology
title: 支付交互演进与代理式商业的发展探讨
summary: 对话讨论了卡片支付界面的历史优势、EMV与移动支付终端的普及，以及从早期无卡信用信任到当前代理式商业的发展。参与者认为杂货采购已具备代理式雏形，但AI完全代管复杂消费决策的普及仍可能面临较长摸索期。
insight: ''
draft: true
series: ''
category: business-entrepreneurship
area: finance-wealth
project: []
people: []
companies_orgs:
- Visa
- Mastercard
- Apple
- Google
- PayPal
products_models:
- Apple Pay
- Google Pay
media_books: []
status: evergreen
---
### 支付交互与底层生态的演进
卡片支付界面是有史以来创造出的最优秀的单一用户界面。无论怎么想象，它都是全世界最大的市场。而且在支付领域，根本不存在规模小于一千亿美元的利基市场。
Original English
The card payment [music] interface is the singular best user interface ever created. It is the world's largest market [music] by any stretch of imagination. And there are no niches and payments that are smaller than hund00 billion.
Original English
>> Once you go really big, the numbers get small, which is strange. [music] There's a lot of volume, but the large volume revenue opportunities and payments tend to be the smaller dollar amounts.
Original English
>> There's always an opportunity to use another form of payment delivery device to satisfy a basic need. convenience just trumps as the total amount you're trying to send goes down. The best user interface ever created is the credit card. This may [music] actually be finally up for renegotiation because AI is already there. It's just that you haven't yet trusted your agent to do as good a job as you would. There is something else that you're surprised has not happened yet. I went to some cryptography related conference and presented a new idea in digital payments and was literally booed off stage because it was certainly not anonymous and the the big innovation of PayPal was what if we don't care about anonymity at all and in [music] that sense um
Original English
so you guys go way back having co-ounded a firm and and met well before then you guys are pioneers in in fintech you've been thinking about the space trying to make sense of the present you know think about where the future is going for 20 plus years, 25 years, maybe even more. And I'm curious, you know, given so much time has passed since you first got into the space, what has most surprised you about what has happened, what hasn't happened, what did you expect to happen in the early 2000s of how how this space would would play out? Maybe Alex, why don't you start?
Original English
I think the rise of Apple Pay and Google Pay and to the extent the the extent to which they've really penetrated because it's very hard to change consumer behavior in general and it was a bizarre set of accidents if you will where there is this merchant liability shift because magst stripes were so easy to replicate that uh you probably noticed a while ago you your new cards had a little chip on them and you had to dip the chip and then the machine would be like you know don't remove don't remove right that's because the chip was being rewritten it was much more secure than a magstripe and basically Visa and Mastercard. Um, and then the Euro Pay that's what the E is for. Uh, but what is EU for? EMV.
Original English
>> Europe card.
Original English
>> Euro card.
Original English
>> I don't know. The Europeans somehow got their say because they always do. They they insert their not electronic. That's
Original English
>> Yeah, it's it's euro something Mastercard Visa. So, it was it was called the EMV switch. So, all of these machines, if you did not want to be liable, um, like I could go to Best Buy, buy a TV, and then get home, use my TV, and say, "Nope, never bought the TV." And if I was using my magstripe and Best Buy didn't have the the machine switch over, then Best Buy would be like, "Oh, shoot. We lost all the money on that TV, and Alex gets the free TV." I'm exaggerating slightly for a fact. So, everybody had to get a new machine. And then it turned out that those new machines had a little contactless, you know, thing where you didn't have to dip the chip or swipe the card. You could just tap. Nobody was using taps when those machines came out and now it's ubiquitous. So that's that's something where I mean generally speaking it's hard to change consumer behavior but I feel like between COVID and the fact that all these merchants independently had to switch over their machines and the fact that I mean I wouldn't have guessed in I mean you obviously did because the uh confinity was was Palm Pilot sending money. So you you're ahead of the whole PDA wave but I wouldn't have guessed that those three things would have come behavior. It's like change of of consumer behavior, ubiquitous new merchant payment terminal plus ubiquitous uh mobile telefan and that's that's certainly one thing that has changed the world a lot.
Original English
>> How about you Max? You you were dreaming about you know what what the future of money would look like a long time ago. Would it have surprised you about what has happened or what hasn't happened?
Original English
It's very hard to uh step back from the soup if you're cooking in it uh for the last plus or minus 30 odd years. Uh, I think the to sort of further illustrate Alex's point, one of the things that's really amazing and subtle about Apple Pay/Google Pay and its interaction with the Visa Mastercard networks is Visa and Mastercard have a hard 2 and a half second limit on interaction between the network, the issuing bank and the merchant and the acquiring bank. And so the whole thing has to happen in 10 seconds where the transaction gets retrieded or maybe just canceled out and really leaves very little room for any kind of clever innovation. And online you can play games. If you're doing e-commerce you're like well yes we're going to submit your card to Visa but first we're going to run some anti- fraud checks and we're going to do some other things to like reduce liability.
Original English
But offline like once your card is presented two and a half seconds that's all you got. And Google and Apple Pay have singularly timeshifted the whole thing by creating secure enclaves inside their chips and saying I already know your card. I can do all kinds of things before I actually have to talk to Visa Mastercard. And maybe the shocking thing is that Visa Mastercard have not yet introduced some new standards saying actually it doesn't have to be two and a half seconds at all. It could be 15 seconds while we know go and get a bunch of issuers to bid on a better credit quality terms for you or any other type of innovation.
Original English
the sort of hardwritten rules of dehawk era are more or less intact and that's not 30 years that's like more you know 60 years and so I think that's probably a critical or more criticizing take on what happened um
Original English
but the shocking thing about payments is that it is the world's largest market by any stretch of imagination and anything and everything you could have possibly thought of being sort of deconstructed and being the nichiest little thing to poke around and innovate in always turns out to be a hundred billion dollar. There are no niches and payments that are smaller than hundred billion. And so that's probably the most surprising thing I've seen.
Original English
>> Yeah.
Original English
>> Although it's interesting like once you go really big, the numbers get small, which is strange, right? Like if I send a $1 trillion wire, right? The United States just announced we we are $40 trillion in debt, right? Let's just say that like, you know, Elon's Mars colony is worth $40 trillion. and you know Roana decides to tax him $40 trillion and he needs to send a wire that wire is not going to be very pro like there there's a lot of volume but the large volume revenue opportunities and payments tend to be the smaller dollar amounts um which is surprising right because it turns out I mean like all of the QSR the quickserve restaurant the payment opportunity there that's massive that's why Starbucks invented Starbucks pay because they wanted to stop having to pay it's like these prepaid they only have to pay one time. You char you put $50 on your Starbucks account. Well, they only have to pay Visa, Mastercard, and everybody else one time as opposed to every successive time. So, a lot like what's surprising about payment uh area under the curve, if you will, is that like the bigger the dollars, like the smaller the rake, which I guess makes sense because you're not going to get 2% of that $40 trillion payment, but everybody goes after B2B payments. Everybody has a clever idea for B2B payments and like that's the only one that is probably the exception to the rule. I was trying to find so it's lost in time the original email between the two of us which I think we have slightly different origin stories of how we actually met
Original English
>> but I was trying to find the original email between the two of us where we start mentioning what becomes a firm eventually and it's dated April 2011 and uh in it I think I ask you like tell me more about this bill me later thing because I was working on something else while you were watching PayPal buying
Original English
build
me
and
you
send
me
these
really
long
elaborate
sort
of
here's
exactly
what
it
is
and
all
these
ideas
around
it
and
we
then
veer
off
into
this
ping
pong
of
emails
around
bill
me
later
for
business
and
conclude
that
it's
actually
a
dumb
business
where
there's
there
isn't
an
opportunity
>> 哎，其实有意思的是，你提到了这个，我买了 pay me sooner（早点付我钱）这个域名。
Original English
>> well
and
that's
actually
it's
funny
you
mentioned
I
bought
the
domain
pay
me
sooner
>> 结果就是，就好像“啊，‘晚点向我请款’是个好主意，‘早点付我钱’会是个更好的主意”。其实那里的想法现在依然不算糟糕，因为它不是支付，而是借贷。所以这么想吧：想象一下，大公司总是为了获得更好的付款条件而欺负小公司。对他们来说是更好的付款条件，对吧？就像如果我是通用电气（GE），你是埃里克·托伦伯格（Eric Torrenberg），你是个小角色，而我是庞大的 GE。我说，我要做 Net 90（90 天后付款）。所以你给我开发票，我 90 天后付你钱。现在你得给你的员工发工资了。所以你去找银行，去找别的人。你说：“嘿，我是埃里克。呃，我做这门生意。我的大部分钱来自 GE。他们是一家极好的公司。他们会在 90 天内付我钱。”银行根本不在乎，对吧？他们只会说：“对啊，我们要收你 15% 的利息。”与此同时，GE 发行债券的利率大概是，你知道的，不管是什么 SOFR 加 10 个基点之类的。比如 GE 支付 5% 的信贷成本。你支付 15% 的信贷成本，但这有点讲不通，因为你的信用其实就是 GE 的信用，如果你能理解的话。现在，有一种叫作保理（factoring）的东西，你可以把发票卖掉。你其实可以把应收账款卖掉。那在某种程度上是高利贷式的。呃，那非常非常……其实它不算高利贷，因为信贷法不适用，因为你卖的是应收账款。但我一直觉得“早点付我钱”是个有趣的想法，因为整个经济运行所依赖的现实就是，比如我的企业在等你的付款，比如我不得不借钱的原因就是因为你没有早点付我钱，呃，或者反过来，抱歉，是我没有早点付你钱。是的，所以但是的，我们没有去推进那个项目。
Original English
>> as
a
result
so
it's
like
ah
bill
me
later
was
a
good
idea
pay
me
sooner
would
be
an
even
better
idea
actually
the
idea
there
it
still
is
it's
not
it's
not
terrible
because
it's
not
payments
it's
lending
so
think
of
it
this
way
Imagine
that.
Like
big
companies
beat
up
small
companies
all
the
time
to
get
better
payment
terms.
Better
payment
terms
for
them,
right?
It's
like
so
if
I'm
GE
and
you're
Eric
Torrenberg
and
you're
a
little
guy,
I'm
big
GE.
I'm
like,
I'm
going
to
pay
you
net
90.
So
you
invoice
me
and
I
pay
you
90
days
later.
Now
you
have
to
pay
your
employees.
So
you
go
to
a
bank,
you
go
to
somebody
else.
You're
like,
hey,
I'm
Eric.
Uh,
I
run
this
business.
Most
of
my
money
comes
from
GE.
They're
an
awesome
company.
They're
going
to
pay
me
in
90
days.
bank
doesn't
care,
right?
They're
just
like,
"Yeah,
we're
going
to
charge
you
15%."
Meanwhile,
GE
can
issue
bonds
at
like,
you
know,
whatever
sofur
plus
10
basis
points
or
something.
Like
GE
is
paying
5%
for
credit.
You're
paying
15%
for
credit,
but
it
kind
of
doesn't
make
sense
because
your
credit
is
G's
credit,
if
that
makes
sense.
Now,
there's
something
called
factoring
where
you
can
sell
the
invoice.
You
can
actually
sell
the
receivable.
That's
somewhat
usurious.
um
that
that's
very
very
actually
it's
not
usurious
because
it
doesn't
like
credit
laws
don't
apply
because
you're
selling
a
receivable
but
I
always
thought
that
pay
me
sooner
was
an
interesting
idea
because
the
whole
economy
runs
on
the
fact
that
like
my
business
is
waiting
on
payments
from
you
like
the
reason
why
I
have
to
borrow
money
is
because
you
don't
pay
me
sooner
uh
or
other
way
around
sorry
I
don't
pay
you
sooner
and
yeah
so
but
yes
we
didn't
we
didn't
pursue
that
>> 如今在应付账款融资和应收账款融资领域都有一些发展不错的企业，所以这……这不是个坏主意，但是尽管身处不受监管的借贷领域，其收入机会表面上看来比消费领域的要低，因为便利性这个因素是每一个参与者都明白的，并且有大量的玩家会给你提供稍微便宜一点的费率，这同样也是为什么向卢旺达电汇 40 万亿美元无论由谁来处理，都将是一门……
Original English
>> there
there's
some
healthy
businesses
these
days
in
both
accounts
payable
financing
and
accounts
receivable
financing
so
it's
This
is
it's
not
a
bad
idea,
but
the
revenue
opportunity
despite
being
an
unregulated
lending
space
is
seemingly
lower
than
the
one
in
consumer
because
the
convenience
factor
is
something
that
every
participant
understands
and
there
are
plenty
of
players
that'll
offer
you
a
slightly
cheaper
chart
which
is
also
the
root
origin
of
why
a
$40
trillion
wire
to
Roana
is
going
to
be
uh
>> 不怎么赚钱的生意。
Original English
>> not
very
profitable
business
whoever
processes
it.
### 支付创新与生物识别认证
>> 是的。还有什么别的想法让你感到惊讶——呃，它居然至今还不存在，而你在某个时期曾认为“嘿，世界显然应该这样运转”？这里，你知道，存在一个显而易见的机会，但因为不管什么、你知道的，种种混合在一起的原因，就是还没有发生；或者借用，呃，你知道的，马克的话，“没有坏想法，只有过早的想法”。有没有什么别的让你惊讶至今尚未发生的事情？
Original English
>> Yes.
What
what's
what's
another
idea
that
you're
surprised
uh
does
not
exist
yet
that
you
were
thinking
at
some
point,
hey,
the
world
obviously
should
work
this
way?
There's,
you
know,
an
obvious
opportunity
here
and
for
whatever,
you
know,
conflation
of
reasons
just
hasn't
happened
yet
or
or
to
use
uh
you
know,
Mark's
quote,
there
are
no
bad
ideas,
only
early
ideas.
Is
is
there
something
else
that
you're
surprised
has
not
happened
yet?
你知道，我们一直在寻找极佳的生物识别支付方式，而它更多地体现在电影里，人们的大拇指和眼球被取下来用于认证。然而，我们现在依然在使用芯片卡支付。顺便说一句，刷卡支付界面是有史以来创造出的单一最好的用户界面。而且人们并不是没有尝试过去做得更好。记得甚至在 PayPal 之前，就存在过这种感应棒，我想是万事达卡和一家汽油、呃、加油站网络合作制造的，你可以像这样在加油站旁边挥动这个感应棒，支付就完成了，你就可以给汽车加油。当我看到它时，我想：“天哪，这显然会取代信用卡。”但它并没有。而这里面其实包含着一个关于整个支付创新非常有趣的教训。存在某种先验上不明显但在后验中显而易见的临界规模版本，如果你达不到它，你就会失败。就像在支付领域里并没有真正所谓的“还算可以”的结果。你要么达成目标，每个人都必须拥有你的小部件，或者你的网络，或者你的无论什么东西；要么它就直接归入历史的长河。这是一个其实非常合理的极好例子。比如，你当然想在车钥匙上挂一个这样的小感应棒，只要挥一下就能加满油，但它只是比你装在口袋里的信用卡快了一点点，并没有快很多。而信用卡本身就能很好地工作。因此，我一直在等待某种完全不同的将付款人向设备进行认证的方式，而除了手机之外，我们还没有做出更好的东西。
Original English
You
know,
we're
forever
in
search
of
the
great
way
to
pay
biometrically,
and
it
manifests
itself
more
in
movies
where
people's
thumbs
and
eyeballs
get
removed
for
authentication
purposes.
And
yet,
like,
we're
still
paying
with
chips.
By
the way,
the
card
payment
interface
is
the
singular
best
user
interface
ever
created.
And
it
it's
not
something
that
people
haven't
tried
to
do
better.
remember
even
before
PayPal,
there
was
this
wand
that
I
think
Mastercard
and
one
of
the
gas
um
uh
refueling
station
networks
produced
this
thing
where
you
could
like
wave
this
wand
next
to
a
gas
station
and
payment
is
secured
and
you
can
fuel
your
car.
And
when
I
saw
it,
I'm
like,
"Oh
my
god,
this
is
obviously
going
to
take
over
credit
cards."
And
it
didn't.
And
there
actually
therein
lies
a
really
interesting
lesson
in
payments
innovation
in
general.
There's
some
unobvious
a
priority
but
clear
opposeriori
version
of
critical
mass
and
if
you
don't
reach
it
you're
going
to
fail
like
there's
not
really
a
okay
outcomes
in
payments.
You
either
get
there
and
everyone
needs
to
have
your
widget
or
your
network
or
your
whatever
or
it
's
just
going
to
go
into
the
uh
the
time.
And
this
is
a
fine
example
of
a
thing
that
actually
made
a
lot
of
sense.
Like
of
course
you
want
to
have
a
little
wand
on
your
car
keys
to
just
sort
of
wave
and
get
refueled,
but
it's
just
a
little
bit
faster,
not
a
lot
faster
than
the
credit
card
you
have
in
your
pocket.
And
that
just
works.
And
so
I
I
keep
on
waiting
for
some
completely
different
way
of
authenticating
the
payer
to
the
device
and
like
other
than
the
mobile
phone,
we
haven't
done
better.
>> 亚马逊最近其实刚在全食超市停用了那个大拇指支付。
Original English
>> Amazon
actually
just
discontinued
the
whole
thumb
payment
at
Whole
Foods.
>> 他们其实……那不是大拇指支付。那是掌纹。手掌。是的。
Original English
>> They
actually
It's
not
a
thumb
payment.
It's
like
it's
the
palm.
The
palm.
Yeah.
>> 我挺喜欢的。我不管住在哪家酒店旁边，真的都会去旁边的全食超市。
Original English
>> I
loved
it.
I
I
would
literally
go
to
Whole
Foods
next
to
whatever
hotel
I'd
be
staying
in.
>> 他们把它取消了我还挺难过的。我知道。我以前也用它。
Original English
>> I
was
sad
that
they
got
rid
of
it.
I
know.
I
used
to
use
it,
too.
>> 它其实甚至没有更快。只是好玩。
Original English
>> It's
actually
not
even
faster.
It's
just
fun.
>> 我知道。它可能还更慢。
Original English
>> I
know.
It's
probably
slower.
>> 确实更慢。就像是“给我算个命，顺便买下这些葡萄”。
Original English
>> It
is
slower.
It's
like
tell
me
my
fortune
and
these
grapes.
>> 算出来的命就是你欠我钱。是的。那就是、那就是你能得到的唯一的运势。好吧，那是……我是说，我想我之所以呃、偶然把它叫成了大拇指，纯粹是因为那家公司的名字几乎就叫这个。
Original English
>> The
fortune
is
you
owe
me
money.
Yes.
That
is
that
is
the
only
fortune
that
you
ever
get.
Well,
that
that
was
I
mean
I
think
I
called
it
thumb
by
by
uh
by
accident
just
given
the
the
almost
uh
almost
name
of
a
firm.
>> 没错。
Original English
>> That's
right.
### 加密货币与 DigiCash 的启示
当加密货币行业开始流行起来，或者当你知道该领域的一些主要项目刚刚启动时，那里面有没有某些部分让你感到兴奋，或者觉得实现了你长期以来的某种梦想？还是觉得“嘿，这毫不相干”，或者只是觉得不太起眼……
Original English
when
when
sort
of
the
crypto
industry
was
was
becoming
popular
or
when
you
know
some
of
the
major
projects
uh
were
were
starting
in
in
the
space
did
that
were
there
parts
of
that
that
seemed
exciting
to
you
or
realization
of
a
you
know
long-held
uh
sort
of
dream
or
did
it
feel
hey
orthogonal
or
just
not
really
>> 这么说吧，我经常在趋势上慢半拍，比如对我接触的大多数事物而言，我都不是世界上最早的采用者。
Original English
>> so
I
I'm
frequently
late
to
trends
like
I'm
not
the
world's
earliest
adopture
of
majority
of
things
I
encounter
>> 我觉得 PayPal 挺早的，对吧？
Original English
>> I
feel
like
PayPal
is
pretty
early
right
>> 嗯，算是吧。呃，给你讲讲 PayPal 的完整背景，我当时其实非常想做一个非常具体且与 PayPal 大相径庭的东西，呃，它是在极低功耗的芯片上运行的。为了做到这一点，我需要弄清楚如何让密码学原语在一个非常非常低功耗的芯片上工作。我们做到了。然后我们立刻意识到，除了加密一些非常非常小的数据量之外，它其实干不了太多事情，而需要快速加密和解密的小数据量，某种程度上就会把你引向支付领域，这就是 PayPal 的由来。但在所有这些开始之前，我去参加了 DigiCash 的停运/破产派对，DigiCash 是所有数字支付的鼻祖。呃，那是一场略显凄凉的聚会。地点在斯坦福大学校园内，当时就像是，你知道的，倒着 40 盎司的麦芽酒，一群看上去非常伤感的赛博朋克相互诉说着数字支付的时代并没有降临在我们身上。呃，所以从这个意义上说，我们来得很晚。当时我听着这些想法被击碎的人交谈，那是盲签名技术，大卫·乔姆（David Chaum）在某个地方，他实际上并不在场，但他绝望地游荡在帕洛阿尔托的街头，因为他那绝妙的想法——确实是非常绝妙的想法——基本上被证明是没有产品市场契合度的。呃，很快在那之后我们创立了 PayPal，呃，我去参加了一个密码学相关的会议，展示了，你知道的，一个数字支付领域的新想法，结果字面上被嘘下了台，因为它远没有那么安全。它当然也谈不上匿名，而 PayPal 的重大创新在于：如果我们根本不在乎匿名性会怎样？事实上，人们确实不在乎。他们只需要付咖啡钱，或者买他们的，你知道的，网购物品。而在这种意义上，呃，我觉得我们在这场游戏里又来得非常晚。游戏已经结束了，所有的狂热者都离场了。呃，所以……
加密货币——不要和密码学混淆了——呃，当时所以我读了原版的比特币白皮书，觉得：“哇，这是解决拜占庭将军问题的一个非常聪明的方法。”我和所有数学和密码学极客一样，对这种方法印象深刻，但我哪怕一秒钟都没觉得它会成为一种货币或一种支付方式等等。而且我现在也不确信它是一种支付方式，而且……
Original English
Well,
sort
of.
Um,
to
give
you
full
context
for
PayPal,
I
really
wanted
to
build
something
very
specific
and
quite
different
from
PayPal
uh
that
operated
on
very
low
power
chips.
And
to
do
that,
I
needed
to
work
out
how
to
make
cryptographic
primitives
work
on
a
very,
very
low
power
chip.
And
we
did.
And
then
we
promptly
realized
that
it
really
couldn't
do
very
much
other
than
encrypt
some
very
very
small
amounts
of
data
and
small
amounts
of
data
that
need
to
be
encrypted
and
decrypted
quickly
that
kind
of
leads
you
to
payments
which
is
how
PayPal
came
about.
But
right
before
all
of
that
began
I
went
to
the
windown/bank
bankruptcy
party
for
DigiCash
which
was
the
original
granddaddy
of
all
digital
payments.
And
uh
it
was
sort
of
a
somber
affair.
I
was
on
Stanford
University
grounds
and
there
was
like
you
know
pouring
out
of
the
40s
and
a
bunch
of
very
sadl
looking
cyber
punks
telling
each
other
how
the
age
of
digital
payments
is
not
upon
us
and
uh
so
in
that
sense
we
were
very
late
when
sort
of
I
was
listening
to
these
people
talk
whose
idea
was
crushed
it
was
blind
signatures
and
David
Ch
was
somewhere
he
was
actually
not
present
but
he
was
roaming
the
uh
streets
of
Palo
Alto
despondent
because
his
brilliant
idea
and
a
truly
brilliant
one
was
you
know
basically
being
proven
to
be
not
having
a
a
product
market
fit.
Uh
and
then
we
promptly
soon
thereafter
started
PayPal
and
uh
I
went
to
some
cryptography
related
conference
and
presented
you
know
a
new
idea
in
digital
payments
and
was
literally
booed
off
stage
because
it
was
not
nearly
as
secure.
It
was
certainly
not
anonymous
and
the
the
big
innovation
of
PayPal
was
what
if
we
don't
care
about
anonymity
at
all.
In
fact,
people
don't.
They
just
need
to
pay
for
their
coffees
or
their,
you
know,
online
purchases.
And
um
in
in
that
sense,
um
I
feel
like
we
were
again
very
late
to
that
game.
The
game
had
played
out
like
all
the
enthusiasts
had
left
the
building.
Uh
and
so
cryptocurrency,
not
to
be
confused
with
cryptography.
uh
when
so
I
I
read
the
original
Bitcoin
paper
and
thought,
"Wow,
that's
a
really
clever
way
of
solving
the
Byzantine
general
problem.
I
sort
of
as
all
the
uh
math
cryptography
nerds
was
impressed
with
the
approach,
but
I
not
think
for
a
second
it
would
become
a
currency
or
a
payment
method
and
etc.
And
I'm
not
convinced
it's
a
payment
method
now
and
已经有相当长一段时间了，但作为货币、商品以及价值储存手段而言，它无疑被证明是非常成功的。”所以我觉得……随着我看着加密货币扩张并成为一种不可忽视的存在，而且越来越重要，应用场景现在正在浮现。我们，你知道，稳定币已经来到我们身边，这无疑是一套非常清晰的应用，但在我看来，还没有任何一种接近打破“我要用它来买一杯咖啡”的界限——我认为这可以说是旧支付形式最经典、最重要的应用场景。因此，作为货币，作为价值储存手段，它令人着迷。
你知道，你上一次把一枚比特币或一聪花在任何真正重要的东西上是什么时候？抛开那些专门为了证明这种说法是错的而特意花掉它的人不谈——
Original English
it's been quite some time, but as currency and commodity and a store of value goes, it's certainly proven to be extraordinarily successful." So I think the as I watched uh cryptocurrencies expand and and become a thing and more and more of a thing, the use cases are coming out now. We're, you know, stable coins are upon us and that's certainly a collection of very clear uses, but none have, in my opinion, come close to breaching the I'm going to use this to buy a cup of coffee, which is kind of that's the canonical and most important, I would argue, use case for old forms of payments. So, as currencies go, as store value goes, fascinating.
You know, when was the last time you spent a Bitcoin or a Satoshi on anything actually important? You know, putting aside people who make it a point of spending it just to sort of prove the point wrong
Original English
>> and and it's the most important um that buying coffee is the most important metric because of just the the volume of it because the frequency, the practical,
Original English
>> there's always an opportunity to use another form of payment delivery device to satisfy a basic need. So, if you're sort of contemplating a $40 trillion transfer, you'll spend a lot of time figuring out the secure way, the the fast way, the cheap way, etc. If you're passing through your nearby bagel shop and you need a cup of coffee, if your cryptocurrency wallet passphrase is too long, you're going to look for change in your pocket. And if you don't have it, you'll pull out a debit card or credit card. So user interface as the payment amount diminishes it takes over cost takes over everything. Basically convenience just trumps everything else as the total amount you're trying to send goes down.
Original English
>> Yeah.
I I want you to take us both back to me memory lane. It's the beginning of a firm and how you guys navigated the idea maze of of what would eventually become a firm.
Um,
you go here.
Original English
>> Well, hopefully our stories match.
Original English
>> Yeah, we should put us in three questions for like no separate route. This this is like the prisoner's dilemma, right? It's just like ask if our stories match, we have to we get to leave. If they don't match, then we have to stay here all day. Um, so my recollection was um I ran this company Trial Pay, which did um alternative payments for digital goods. So, you don't want to pay for throwing a sheep or doing something on some silly social game, something that was not hard, valuable, or fun.
Original English
>> Who would do such?
Original English
>> Who would who would do such a thing? But, you know, you're buying coins in Farmville or you're doing something. You're buying poker chips, virtual poker chips. Of course, you don't want to pay get it for free if you sign up for Geico. There's a lot of economic value to Geico. You don't really care if you use Progressive or Geico. Oo, I can get Farmville coins if I switch to Geico or get a credit card or sign up for Netflix. So, that's what we did. And uh I I was uh somewhat persuasive and annoying. Probably more annoying than persuasive. So signed up every other social gaming company. Um except for this one called Slide. And uh Max ran proudly or unproudly ran Slide. And uh I went to the Allen & Company conference which I almost didn't go to because my wife was very very pregnant. So this was in March of 2009. It's like the first week of March. My son was born March 28th, 2009, but her due date was March 16th. So like I'm not going to go to this conference. And then uh the the Allen guys were like, "This is a very good conference. You should really go." I was like, "My wife's very pregnant." He's like, "You should go to the conference. If she goes into labor, we'll fly you back." I was like, "All right, that sounds good. I'm going." So I went [snorts] to the conference. I think we met there briefly. Uh successfully did not persuade you. U but then I think I followed up with a note in Russian.
Original English
>> Yes. Um, and this wouldn't have worked today because now obviously I would have used Gemini or you know you know chat GBT to write this probably somewhat riddled with grammatical flaws Russian note actually that that probably would have given it away of not being chat GPT. It wouldn't have passed it would have passed panggram but I took Russian in in high school and college worked there lived there for a while um and I think you were like why do you speak Russian? I think that was the response but then we just became friendly. Uh I think I you you sold to Google so I could not ever convince slide to become a client of of trial pay sadly. Um but uh I I seem to recall you had like a tweet like I'm looking for something to do. Any idea? And that was like my reason to reach out and I think we we had coffee at the forbidden building at Google. Remember how like there was one Google building that no guests were allowed at but you just didn't care. Um statute of limitations were [laughter] so they can't.
Original English
>> You're revealing all my secrets.
Original English
>> Yes. Exactly. Because I know how much you love Vic. Um, so, so, [laughter] so we we had coffee there and then that's where this Yeah, we were talking about Bimley later, but it was like, you know, my recollection was it's really hard to pay for something on a mobile phone. Mobile phones are becoming more ubiquitous. We should have a way of solving the pajama problem of you're upstairs in your pajamas, you want to buy something, your credit card is downstairs, how do you pay? Meanwhile, not just are mobile phones ubiquitous, but social networks are ubiquitous. And maybe there's a new underwriting mechanism of kind of going back to the old general store from like the 1800s of it's like you show up in the general store, you don't have cash, like both literally and figuratively. You don't have it on you, but you don't even have it, you know, back home. But you run the general store and you're like, "Okay, Max, I got you. Don't worry about it." But today, you're just like a cookie and an IP address, so I don't really know who you are. Or if you go to Walmart offline, it's like, you know, you get greeted by the very nice greeter. I don't think they have them anymore, but like you get greeted by the nice greet. they have no idea who you are. You can't do the general store thing. But if you have 500 friends on Facebook, this was wrong, by the way, but if you have 500 friends on Facebook and they all have, you have a thousand pictures that you've uploaded, you're probably a low credit risk. And if you're not looking for credit, this is the key thing. It's like a lot of credit offers are sent out proactively. So, you have an 800 FICO. I know that you have $14,000 that's revolving for some reason on your Capital One card. I'm going to send you a customized mailer saying, "Why don't you go refinance with me, Bank of America?" But if you go on Google and you say like, "I'm out of money. Need money, need money, credit, credit, credit," like you're probably a bad credit risk. So, kind of going back to the general store concept, people that aren't looking for credit that might not have their wallet with them, kind of make it like the 1800s and pay with your identity. That that was kind of how I remembered it.
Yeah, I think that that that matches. Uh the to add a little bit more color to it. So the year at Google was definitely a challenge in a sense that I was still coming to terms that I ran for like over 5 years a company in social media that I had no business running. Like I I worked very hard. had a financially very positive outcome for a lot of people, but ultimately it never sort of scratched the sort of entrepreneurial itch that I thought I was I was scratching. And so one of the things that happened during that year, I spent a lot of time soulsearching like what am I supposed to do next with my life? I was going to start a company, but you know, maybe maybe I should be more thoughtful about what company I'm going to start next. And my wife, who's pretty much always right, said, "You know, the hardest you've ever worked and the happiest you were was during the anti-fraud days at PayPal, like when you nearly died, or we nearly died. She was there as well." Um, those were the days when you looked exhausted, but you actually were obviously
Original English
very happy. And you know, I you know, she was telling me, "I know you swore off doing financial services. I know you're never going to touch payments again, but just this once. Give give it a chance. And that that actually had some influence as to my responsiveness, too, because you're working on a payments company. And part of my reluctance to deal with trial pay was like, I can't handle another near payments company. Like I I went into social media for a reason. I don't want anything to do with this stuff. And so, as I was slowly getting reeled back into working on payments,
Original English
we started talking about this. The sort of a social BML was one of the sort of short hands we used. discussing what it would be. Um, the general store analogy was interesting because at the same time, I can't remember which one of us knew this cuz you also speak Japanese and this this could have been the thing you told me, but I remember reading about social credit in different economies. There's a notion of just pay me later or pay me next time in Israeli grocery stores, which is still common today. If you're checking out an Israel, apparently in a small enough town, you can just show your bag to the cashier. they'll remember and then they'll get you next time if you forgot your money.
Original English
This is even more formalized in Japan where until very recently you would give your business card to the storekeeper even if they didn't know you. If you had a business card, they would write what you bought on the back of it and that was your total. And the notion of like you just put it on my tab is a thing that's you know obviously fairly American concept and so on. And so we were converging on this. Uh I was talking to a startup at the time. ascouch just learning about the industry that was trying to build a social credit score kind of modeling it on the Chinese social score which is used for a lot more than than credit obviously. So we were swirling around this idea of payments and solving the I don't have my credentials with me but I still need to get through this.
Original English
Like another sort of metaphorical version of this was I'm watching TV. did this really cool ad back in the day when people had advertisements in between things in TV. Uh, and I really want the thing that was promised to me at the price that it was promised to me, but I could do it on my phone, but I'm definitely not going to get off my bed. And so, like what if there's some area under the curve that you can capture by bringing these um transactions closer in time and improving conversion obviously. And so, that that's the kind of the the swirly origin story.
Original English
Um, a lot of it I think the two of us had a slightly different version of what would be fun. So I think you as a payments guy you were mostly thinking like let's go do some payments stuff. As a person recovering from doing lots of machine learning in a service of social media which was you know good and well but wasn't really what I was meant to do and lusting for the days of doing machine learning to fight fraud. My mo was I just want to build a really cool credit score and then someone else will take care of payments like lending payments. Don't really know anything about it. And I've done payments. Don't need to do lending. But building a really cool score that would be amazing because I remember just the reams of data we had access to at PayPal. We could maybe get some data. Maybe we could buy some data. We could mine Facebook for data. I'm trying to get in touch with Mark Zuckerberg to see if he might give me some of his data. And so a lot of that was sort of in my head while you were like I just want to close some transactions. I think that that maybe if there's any difference between the motivations you were much more motivated by let's go find a merchant.
Original English
>> Well but the similar motivation was like you know trial pay I think we were in the throws of selling to PayPal but then they they left me at the altter not your PayPal the many many generations later PayPal. Um and I was like I never want to start a company again. This is so painful. I and then you you had been in that in the throws of that as well. So, it was also like let's get this thing going. Um, and we'll hire other Well, but then you introduced me to Nathan uh and Jeff um and we kind of formally incorporated, but I I also like the other thing that I distinctly remember and you'll you remember this in a very negative light because it's PHP, but uh we had a meeting this I I kind of think of the origin as being the Allen and Company conference in 2012.
Original English
>> Oh, yeah. I I don't I don't find it a negative thing.
Original English
>> No, no, I know. But it was funny. So, so we have this meeting like so, uh, we're going through the the list with, uh, son, remember your your old chief of staff, right? So, we're going through the list and it's like, oh, we both know Jim McCann, who's this very friendly guy who used to be on all the commercials for 1800 Flowers. Remember 1800 Flowers, you can order flowers. Order it right now for me or whatever the commercial was. So, uh, we ping him to get a breakfast meeting. It was like 200 person conference. Anybody can be with anybody, but it's like, hey, why don't we have breakfast? And I I pulled like an allnighter making this demo um in PHP. Yeah, I basically like cloned. It's just funny like a I could do this in 5 seconds now, but I I I cloned 1800 Flowers site um and then made a whole like pay with your identity. So you do a checkout like add the dozen roses to, you know, make up for the bad stuff that I did. Sending it to my wife, click pay. Oh shoot, I don't have my my my payment card with me. I can pay with Facebook. What does that do? It does Facebook connect. It makes sure that I have over 500 friends. And actually Facebook had I mean to your point, they had a lot of interesting data. They had their own internal flags around did they think this account was fraudulent or not. And fraudulent for back then was more of like it was just created not as a real account. It wasn't a real person because an account is not a person, right? Hopefully they're the same thing, but not necessarily because one person can have multiple accounts. Um, but if there's one to one. So, so that was uh that was our fun demo and then I remember Jimmy was like, "This is great. Let's do it."
Original English
>> Yeah. So, I two other colorful points from that. So, it was a good breakfast. And then in the middle of it, he goes, "Oh, yeah. We used to do exactly this thing back in the day when the service members would call us and say, "Send me my wife some flowers." And uh, "No, I don't have my credit card with me." And like, oh, that that's fine. Like, you know, thank you for your service. We'll we'll just get you on the next one. And he like intuitively grocked this idea that like you can absolutely postpay a thing if you have enough trust. And we were basically there raising our hands saying we'll take the responsibility for, you know, if they don't pay you, it's okay. We're going to eat it. And uh so he was like instantly smitten. He he had been a great proponent of the product and like a supportive, you know, person slashpresence in my professional life ever since that breakfast. And he had absolutely no reason to trust us other than like he has some degree of sense who we were. And it was like you guys are great. You seem like you really know what you're doing. Like he was so excited. We have no idea.
Original English
>> Well, then we got handed to uh this what was his name? He actually now runs a successful startup. The uh the guy that was Amit. Yes. Amit Sha.
Original English
>> Yes.
Original English
>> Yeah. So, Amit took over. We implemented he was very very excited. But and I remember I I I came up in Microsoft I think I did this in Microsoft Word or Excel like here's our pricing sheet. We need a pricing sheet and I was like why don't we charge 7%. [laughter] um like so in in consumer finance for these things there's a concept of an MDR and an APR. So merchant discount rate because you're discounting what you pay the merchant because you're advancing in the cash right now. You're not collecting it until later. So call it a 7% merchant discount rate but I
Original English
think
there was like some table. I just
literally made this up. Um and then and
then there was an APR. Um but the APR
here there was no APR. It was just MDR.
Um but then nobody like I I showed this
to somebody. I think it was Rob Feifer
actually uh before we hired
Original English
>> you had like a real finance employee.
Original English
>> Uh yeah. So but but I I showed him this.
He was like free flowers, right? Because
he's like you just didn't have to pay us
back. Um so the the returns were not
fantastic on that.
Original English
>> So cynical.
Original English
>> Um but uh yeah, I think he literally
said free flowers. It's like this is
this is a great deal free flowers.
Original English
>> This is just a generally a very smart
but very cynical guy. So we were not
going to be perturbed by some cynicism.
Original English
>> I love route.
Original English
>> Uh his sister used to work for me. So I
remember uh interviewing him in the
context of a firm although I think at
the time it was still Expedite.
Original English
>> Yeah. It briefly bumped around as
expedite and then we finally renamed it.
Original English
>> What was it? It was it was incorporated
as Expedite Software Inc.
Original English
>> Yeah, I think that's right.
Original English
>> And so how did the idea evolve as you
you know went from there? When did it
start to really get get product market
fit or how did the space play out in the
way that you know
Original English
>> every startup
has the 40 years in a desert like it's
just a a given like if it's worth
talking about expost I mean some some
people just like quit too early or you
know something happens to to destroy it
but I've never run into a company where
people start a company and they just
like hit product market fit and 24 hours
later they're just selling and you know
everything's going swimmingly. So you
always have this period where like kind
of still makes sense to show up to work,
but you don't really know if it's going
to end in like a great nothing. And we
were definitely meandering through the
great nothing period for a while. After
100 flowers, we had a sort of non-stop
interactions with said Ahmed, who was
never happy with the conversion rate,
with the user interface, and he was
mostly right. like he he was kind of a
grumpy demanding guy but he knew what he
was talking about from the product and
financials perspective and he was
definitely not going to pay 7%. Uh and
so uh we were sort of limping through
that. We're generating a little bit of
volume, but among other things, the
notion of, hey, you can pay us later
showed up after you selected the
flowers. And so he would say, "Look, you
guys are cannibalizing my credit card
volume. If I charge if I were charged
nothing for it, of course, I'd send you
more transactions, but you're charging
me more than credit cards, so it's it's
a dumb idea. like I don't want to pay
anything for it at all. You know, you
guys ought to be ashamed of yourself
basically. And we were sort of trying to
convince other merchants, but we had one
merchant that was essentially saying,
"Yeah, I mean, these guys are nice guys,
but it's kind of worthless." And so it
it was it was going nowhere fast. And
then we had another friend, somebody
named Nils, who ran a company called
Beautylish, which is kind of still
around, but they were selling online
cosmetics and beauty products. And the
only difference that Beautylish
did as they implemented expedite, I
think by then it may have already I
think it was named the firm by then was
that they told their shoppers upfunnel
basically as they were selecting their
shampoos and and perfumes that you could
pay
in three installments or 30 days later
or or whatever it is we were trying to
sort of do. then and that had an instant
30% increase in conversion and that was
the oh we know what this is this isn't
an alternative this isn't actually
solving the pajama problem it is solving
my budget is this but if I could pay
over multiple periods of time it would
expand a lot and so the second we sort
of understood the very beginnings of
that notion we turn it right around into
a sales campaign and very quickly found
a bunch of smallish brands primarily
direct to consumers who could not care
whether we charged them 1%, 5% or 12%.
Because they were trying to grow their
top line and telling their shoppers
that, hey, you could pay for this over
time instead of having to cough up the
cash right now. It was transformative.
And so I would literally get these love
letters from merchant CEOs saying, and
I'm still friends with a lot of them,
like early adopters. Most of these
people have now either sold their
businesses or the business has failed or
they've gone on to do something else.
But I still run into people who were
like there's this woman named Tracy from
Tradzy. Tradzy.com was a
Original English
>> Oh, yeah. I just saw her. Yeah. She
She's wonderful. And she was an early
advocate for us
Original English
>> because her business literally
Original English
>> I forgot about her.
Original English
>> She would email me screenshots of her
dashboards and say, "This is the affirm
effect. Here's a 35% pop you guys caused
for me. Like, please do more."
Original English
>> Well, there there was a solution to the
pajama problem. And then it was also all
the mattress companies.
Original English
>> Oh, yes.
Original English
>> That that that was
Original English
>> that was another that was the big one. I
just remember it's like, you know, wait,
there's a company called Purple and
there's a company called Casper. It's
just like they just kept coming out of
the woodwork and that was
transformative. And I remember actually
we were talking about this in the
context of like how can you charge a
high MDR and get away with it? That
sounds bad. Not get away with it, but
like actually show sufficient value to
the merchant. The highest MDRs are
actually for-profit education
institutions. Mhm.
Original English
>> So, some of them are like 50 like I mean
I I don't like these guys in particular,
but like University of Phoenix.
Original English
>> Um, so there's the private equity firm
Apollo, but there's also like this
holding company of all these for-profit
institutions called Apollo Group or
Apollo something. And University of
Phoenix, I think, is the biggest one.
And they just assume that most people
aren't going to pay. And the the gross
margins are so high because it's an
online course. They're like, "Okay, you
could take 50%." Right? you're stuck
with the receivables on the back end,
which goes back to the fraud fighting
that Max was talking about before
because the gross margins of the
mattress, like these mattresses, I don't
know if you ever bought one. It's pretty
cool because they didn't actually ship
you a mattress that looks like this. It
rolls out. So, you get this like
cylinder. It's pretty small.
Original English
>> Some of them are boxes.
Original English
>> Some of them are boxes, but some of them
it's like you just open it and then it
just like it's like one of those old
like toys that you'd put in like your
bath and then it would expand or
something. It's that was like the
mattress. So they had very very high
gross margins. So therefore a lot more
flexible on the MDR and more importantly
nobody wants like you're in your pajamas
on your uncomfortable mattress. You
don't want to spend $1,200 on a mattress
but if it's like 30 like it once you
subdivided it just has a massive
increase of conversion rate.
Original English
>> Yeah. There's a couple of other sort of
technical things that are probably worth
tapping into in in that story but that
that that was the next big leap. So, the
mattresses was the precursor to the
great expansion into DDC brands, which
I'm sure we'll touch on. But before we
get there, a firm briefly flirted with
being a payment provider to the online
educational facilities,
Original English
>> which we ran out of kicking and
screaming because the reason they're
willing to pay these enormous MDRs is
because the quality of education is
largely terrible. Yeah. So, the reason
people don't pay most of the time isn't
because they're like, "Oh, I thought
about it. Now that I have a master's
degree in basket weaving, I just don't
want to pay for it." See, it turns out
my degree is worth nothing. Like, why
did I sign up for this ridiculous thing?
And so, we were, if you go back to sort
of, you know, things like um what is it
called? General Assembly. Is that their
whole sort of class of these like we
will teach you how to code? Another PEI
thing like learn how to code. Just ask
Chad GPT to code for you. But uh back in
the day when it was still important
Original English
to learn how to code, but you didn't really want to go to college for it. You just want to take a six week course. There were plenty of the sort of University of Phoenix clones that
Original English
>> Academy.
Original English
>> Yeah. There's all the all these guys. And uh we saw that trend and thought, "Oh my god, like these people are willing to subsidize education, which is cool and on mission for us." And uh yet the loss rates to consumer dissatisfaction were so high we lasted like a half a year in that space. But back to mattresses. So the thing that's really powerful about direct to consumer or you can think of them as vertically integrated businesses. So there's some factory in Brooklyn presumably or who knows where.
Original English
>> China.
Original English
>> China. Uh I thought the mattress guys manufactured locally because
Original English
>> I don't know but they were all in Utah. Remember that?
Original English
>> Yeah. I feel like it was like there was like a Utah mattress town or something. But I think they just all originated there. Casper is in New York or was it purple I think was in and then there were like other purples that were
Original English
>> I think one of the weirder things the manufacturing was actually all consolidated so they ultimately sort of paid very little for these mattresses that were kind of all the same. I mean don't want to reveal any industry secrets but memory foam is memory foam.
Original English
>> Uh anyway and so they their primary value or their their their value equation was really interesting. So, first of all, they bought this memory foam in a box and sort of compressed and shipped it to you with a cool effect. The margin there were gargantuan because you are in fact just sort of taking petroleum and turning it into foam. But the other thing is the replacement cycle. And this actually goes to a I think a Harvard Business Review article that came out right before Casper was founded. And all these guys, all these really entrepreneurial people read the same article which essentially said this, people replace mattresses once every seven years. If you're the company that sells that mattress, it is the most important thing in the world. And if you miss it, the next opportunity is seven years from now. But the margins on mattresses even before the sort of the foam and the everything else are like 80% or some some eyepopping number. And so suddenly four or five companies were born from that article basically saying like, "Oh my god, so if we just figure out how to market a mattress that you will either shorten your replacement cycle, so you you buy the next mattress 6 years instead of seven years from the last one or you just decide this mattress is the best mattress or the coolest one or the one that pops out of a box." that is like oh you know there's so much money in it and one it resulted in a saturation of mattress industry obviously but more to the point it created this enormous premium on I will just compel you to buy a mattress by any means necessary so telling you I will give you a three-year loan at no interest at all powered by a firm of course is like a small price to pay and a cool marketing campaign and and and and so that was there were multiple events like this in a firm's history where we saw an opportunity for the merchant to significantly contribute to the MDR which allowed us to eliminate the APR. In other words, consumer got a true 0% loan.
Original English
The backdrop to this that's actually really really important to understand and one of my sort of you know things that I rage against have and and will continue to until it's made illegal or eliminated by by other means is the fake 0% law. So if you ever have gone to a, you know, fill in your favorite department store, there is a sign somewhere these days somewhat less prominent that says get a branded credit card from fill in the blank 0% APR. There's an asterisk next to the zero which says something along the lines of assuming you make a purchase for the next 12 months or 24 months, if you're a penny short or a day late paying your principal, the interest acrru retroactively to the beginning of time. Basically, the day you got that card, you swiped it for $1,000. You wake up and you owe $3,000 two years later. So, this is called the deferred interest credit card. And a huge opportunity we tapped into directly from that rage was this idea, well, our 0% is going to be a real zero. When you go to buy the inflatable mattress or the mattress from a box, you're going to get a 0% loan. And even if you're a month late or a year late, we're not going to change the price because we are so sick and tired of these ridiculous people who are lying to you about zero with an asterisk. It will never be an asterisk on a firm zero. That that is the origin story of why we don't charge lead fees. We don't do deferred interest. all the sort of gimmicks and gotchas that the industry loves to throw at people. We we've run away from all of that primarily as a point of like you know what when you decide to do this for three years with us you will never get screwed. You will never be surprised to the negative and so that that was another sort of big bounce up point and then then every mattress company was like oh wow like these guys are doing it we should do the same thing.
Original English
Okay so fast forwarding a bit a lot of people hear a firm today and you know one quick thing they think is you know buy now pay later. What does this not fully encapsulate or what does this miss about the company today? It's in its entirety. One of the things in the email thread that I just reread in the origin origin of a firm was your claim that advertising and payments are converging which was the thesis behind trial pay thesis behind a bunch of different things actually a failed project within PayPal called PayPal shops where I was trying to personally I built this thing where was trying to remarket what you just bought. That affirmation should give us a sense for what we might buy next and you know all that. And all these things by the way have turned out to be true. Like there was just you know 15 20 30 years before their time. But a firm more and more today is means for merchants to not just satisfy demand. So somebody comes in and says look I'm going to buy this thing but my budget is this big. I won the shoes and I love a bag but I'm and a firm is there say actually we can help you finance this on transparent terms. a lot of times, a third of the time, uh, no interest at all. You should get the bag and the shoes. It's safe. That that that is the brand promise of a firm and it works tremendously well. You know, tens of billions of dollars a year worth.
Original English
That is now becoming more and more about creating a platform for merchants to tell their shoppers, hey, we are launching a new thing. We have this desirable new product we are selling. We've transacted with roughly 50 plus million Americans alone and we're now live in four countries and and growing pretty quickly. And so we have shifted to just satisfying demand to helping merchants create or guarantee demand. And the convergence of payments and advertising is upon us. Although 15 years later predicted it,
Original English
>> you're too early with travel pay. I'm certainly too early with PayPal.
Original English
>> Well, the the other side I remember maybe it was in that thread or not. I should I should find that email. But most companies have very high customer acquisition cost. And like the joke that I make now as a VC is that when I see 90% of consumer companies, I'd kind of rather buy Google stock or Facebook stock because that's where all the customers come from. And I distinctly remember many many conversations around how do we have negative CAC, right? And like I think to me one of the coolest things about a firm to this day is it has negative customer acquisition cost. I mean, it is paid to acquire a customer. And there there are some companies that you would think they look like this, but they don't because they're basically white labeling something. But going back to the mattresses, um, let's just say that you're late on one of your payments. Casper, the friendly white ghost mattress company, because Casper is a white ghost, doesn't want to go or cat or something. We had a cat named Casper when I was growing up. They don't want to
Original English
send you a dunning notice saying like, "Get off my mattress. You haven't paid me back." They want that to be a third party versus other companies where yes, you know what is the difference? What B2B TOC is a really interesting category. It's business to business to consumer. I tried doing this with trial pay because it's like all right, you're playing a Zinga game. Go get uh free coins if you sign up for Geico powered by trial pay. Nobody knew who the hell trial pay was. So we we actually tried sending messages to consumers like you know we got I think we got blocked by our email provider because nobody we we actually had a right to email these customers but they had no idea who we were whereas actually having a financial relationship with 50 million people with negative CAC. I mean it really is not to pet but it's incredible like it's so hard to do and we never see anything like this in the venture land or you know like because yeah there are lots of companies that can get to scale. I mean Casper got to scale but lots of CAC lots of CAC and that's why a lot of these business models they tend to degrade over time because all the economic value goes to Google and Facebook so if you can have negative CAC and then you can launch other products as well right because you actually own the customer and most important the brand wants you owning the customer like this is what I didn't get right at trial pit like Zinga didn't want me owning their customer Netflix didn't want me owning their customer I just connected the two but um a firm the the merchants She wants you to own the customer.
Original English
>> It's very you already have a burden of supporting your product and dealing with unsatisfied customers or technical support issues or whatever. A company that tells you 12 times for your long loan or 39 times, you know, if it's a three and a half year loan, hey, you're late or you got to got to make your payment or all the communications that come from your lender is just another type of burden that the brand is kind of like, you know what, a firm you guys can handle this. This would be great. And so the the relationship with the customer is a key component of the foundation of a firm and the our ability to develop new products is is really built on that. One of the other really sort of cool to sort of going all the way back to the credit scoring thing.
Original English
So we are the only company in the industry really there's plenty of competitors who are trying and some some degree of success but mostly not really who will go into these longerterm loans and by longer I don't mean mortgage for you know 15 plus years but like three and a half years is a fairly long period of time relative to the average bailator which is like 6 weeks and to do that you have to underwrite like you can't shortcut the I'll just look at your FICO score or I'll just sort of you know I'll look at your Facebook friends like none of that works you actually have to do a real very sophisticated degree of u machine learning work. There are two cool things about it. It's hard to do and so it's just hard to compete with us on that front. But the other side is it gives you 39 shots on gold or 12 shots on gold to tell this consumer as you send them billing notices and as you have conversations with them as they pay you to upsell them on a new service. And so these long-term loans, which are actually quite hard to manage and quite hard to maintain reasonable default rates and and delinquency rates on, is the price you pay as a provider of financing to upsell consumers on more and more services. And so our our business has been fueled by these long-term products, even though they are probably the the most challenging part of payments.
Original English
>> Yeah. You know, we've been covering some a firm history. While we're doing a historical episode, I also want to ask a question about PayPal history.
Original English
>> [snorts]
Original English
>> I'll keep us straight [laughter]
Original English
and >> you know um there's been you know a book came out founders recently there's been sort of a lot of uh you know revisiting of of of PayPal both in its impact as u you know pioneer in sort of uh you know payments and and and fintech but also in terms of the the people uh that came out of it and sort of the it it feels like the you know highest concentration of um highest hit rate of people who would go on to do incredible things. The only comparable thing I could think of today is it's not even a company is the deal fellowship or or something. I can't think of a comparable company to PayPal today. I'm curious if you you can um and you know all with uh or many with extremely strong strengths but also you know very strong personalities and some strong weaknesses as well. And so I'm curious if there's something you think that is goes as that story is being told of both of its impact in the industry, you know, how early was uh and and sort of the people that came out of it. if there's something that's underappreciated or you think not quite groed or any any additions you want to make to how we perceive that that company in that time period
Original English
>> sort of an old answer and a new answer to this question which I've you might you might expect I've answered once or twice before u so the the canonical answer that I gave in a book which by the way is very good so there there have been many much ink spilled on the history of PayPal the founder is actually a very good book like and part of it is because it's well written but part of it is because Jimmy the guy who wrote it interviewed every single character in the story extensively. He spent a lot of time talking to all of us and so it's at the very least grounded in fact. Um so the the answer I gave for his research was as we were interviewing certainly the early team and even the later team we kept on selecting four entrepreneurs. We would ask like one of the stock questions I would ask so what are you going to do after PayPal? And the answer that I welcomed the most was oh this is the last one I'm going to start my own afterwards. So this notion like oh if you're coming in here to kind of get your final graduate degree in entrepreneurship of course we'd love to have you like you know if you're you're that smart you're that good and you're that ambitious you know please come along and so that's kind of the why I think so many people that came out of PayPal proceeded to start companies and like literally you know hot second after we all dispersed YouTube and Yelp and Peter's first major fund and LinkedIn and so that was not an accident we for attracting entrepreneurs by design.
Original English
The other part that I think is actually not been talked about and maybe subtle and sort of my own cut of this, but we knew the people in the room intimately like we literally, you know, exchanged firm by hanging out in these sweaty rooms, brainstorming, screaming at each other and spending a lot of time as whiteboards and declaring the other person's ideas idiotic and and so on. we knew the the true version of that person, the sort of the extremely I don't know uh the the the ultra philosophical Peter Teal and the uh you know go all in every time Elon Musk and the these days uh gubernatorial uh David Sax, you know, all these people like they all have kind of the the present the presentation layer and then there's like the kind of what they are like in a dinner party and then like what are they when they're really stressed out and just like head hurts, don't know what to do, and we have a real problem we need to solve. So, if you know kind of the true base version of who we all are as you watch one of these people go for something really big like Elon taking humanity to Mars, which is extraordinary. And yet, you know, he's a human being. Like, I've seen him sweaty and tired and grumpy at the company kitchen a thousand times. or Peter when he is in his doubt and calls me from some fundraising trip saying, "I think we might run out of money." You know, they're not gods. You know, they're humans. And that inspires you to actually like, you know what, if that guy who's just a normal dude, I spent a lot of time with him, he's normal. And he's going for this big of an idea, I should do
Original English
the same. I I should I should strive, too. And so, I think the combination of these are very ambitious people. We all wanted to be entrepreneurs, but we also knew each other when we were young and filled with doubt, which many I think still are. Uh I think that that sort of gives you a confidence that it's not all, you know, bed of roses. It's it's it's paved with uh with with with with bumpy parts.
Original English
>> Is there anything we didn't get to that you want to make sure that we get to while we're here?
Original English
>> I'm probably less optimistic about agentic shopping and I'm very optimistic about aentic payments. Yeah,
Original English
>> I think the the notion of robots will buy our Friday night outfits is misguided. We want to know what we look like long before the robot delivers it to your door. But I think the friction, this notion of so the best user interface ever created is the credit card. This may actually be finally up for renegotiation because agents are in fact smarter than pieces of plastic and even pieces of plastic with rewritable chips. And so I think that's uh a lot of conversation around aentic commerce is probably looking 20 degrees off where you know how can I convince you to just trust a robot to buy the right thing. I don't want to like I love buying bike parts and I spend way too much time looking at two slightly different bike parts because I just you know have to participate in the purchase [sighs] but [snorts] the part where like okay that one the end right now that one is the beginning where you pull out your wallet or you and so I think we we're we're about to see some interesting innovation in payments user interface.
Original English
>> So I can I ask a question on that? So, um I mostly agree, but I think it depends on there's like the I need to research what to buy.
Original English
>> Mh.
Original English
>> Where AI is just yet another tool at your disposal. Like you ask your friends, that's what I'm if it's a bike part, I'm asking you. I'm also asking AI. I'm asking both of you. But now I have the skew that I want. And I don't actually care which one of the 19 different places that I get it from. And I kind of think about the world like you have people that care more about money than time. You have people that care more about time than money.
The way that I kind of think about ajected commerce, again, none of this is happening right now. So, it's trying to prognosticate what's going to happen is here is the the UPC. Here's the the skew that I actually want. Go buy it for me at the lowest cost. It's kind of the thing that people that have a lot more time than money do right now anyway. And like that's why I always point to Camel. Camel. Camel is like my favorite example of this because it's one of the top hundred websites in America that probably nobody with over $100,000 a year of income has ever heard of. But it's it's a way of saying I know what I want. You're not helping. The robot's not telling me what bike part to buy, what telling me what soda to buy. I know. Just give it to me at the lowest price. But it takes way too much time. And sometimes you can just observe one group of humans that already have something as table stakes and then porting that to another group of humans. I I guess do you think that that form of agentic commerce because it's actually related to edgentic payments as well.
Original English
>> I have nine different cards. I don't remember the Amazon Chase issued by Chase card terms for a nonrest purchase of something under $500. and if I've used my whatever. Like it's the same thing. Like people that care more about money than time, they will figure that out. People that care more about time than money, they probably won't. I think directionally that'll make sense. I think the adoption curve is probably going to be fairly slow. And these things are always sort of easy to predict to be very slow. And sort of the usual adage is well slowly at first, not always once. I'm I'm not I'm not sure I I can handicap that. Well, the reason people don't So, there's plenty of people who live in this somewhat murky world of sometimes I have money, sometimes I have time. And it has more to do than anything with the price and the degree of care you put into. I mean, I don't always just buy bike parts. Sometimes I buy milk and milk is built. Where are my bike parts?
I mostly buy parts. Um, but uh the I I think what really happens for a lot of people, it's just like, well, yeah, I'll I'll get the I'll find the cheapest price, but then I'm not sure how to handicap the probability of that item actually showing up at my door at the time of my desired outcome. Even if I'm okay buying a some bike part from some far away land and it's sold from three different retailers,
I'm going to go with the most reputable one versus the one that's got profit promising me the cheapest or sometimes the fastest. And so I think we're probably a few steps away from AI grasping both the preferences but also handicapping how these preferences would change based on the input which may in fact maybe AI is already there. is just that you haven't yet trusted your agent to do as good a job as you would. Like you can eyeball a side be like that looks like it was edited in the 90s. I'm just not quite sure that I'm going to spend $1,000 for a new cassette or $600, whatever the cassettes go for these days in bike cassettes, the rear assembly.
Original English
>> Well, Bike Closet is the site that I'm thinking about that looks like it was made in the 1990s that will sell you a very cheap cassette.
Original English
>> Uh, exactly. But do you know if they were used by by someone you know true teeth rubbed off and all?
Original English
>> Uh yeah. So I I think I think we are in that difficult period where we're still figuring out. The other thing that you know just sort of maybe end on a positive note. The thing that's really true that no one seems to be celebrating just yet is grocery shopping is 100% agentic. Like for anyone who uses Instacart like you tell your Instacart shopper go bring me milk. you don't think twice when they say, "Oh, yeah, you wanted whole milk from Organic Valley, but I found some other brand and here it is." And you're like, "Oh, of course, like makes sense." Like, and so the AI inside that shopper's head is maybe not even as good as Gemini or ChadB is these days, but you just sort of say, "I you just you go through Trader Joe's or Whole Foods or whatever you're shopping and you figure it out and it shows up and 99.9% of the time it is exactly what you want it or better." And so we are already conditioned to allow some of these purchases to be fully outsourced, payments and shopping and everything else. And so we're definitely going to get there. It's just a question of how soon will we work through the quirks of like well returning of this wrongly purchased bike part or waiting for it forever and not really knowing what's going to happen to it because it's in transit but we don't know where it is. I that may be protracted more protracted people think.
Original English
>> That's a good note to end on. We'll have to uh get a part two uh at some point when we talk more about the future. Uh Max, Alex, thanks so much for