DevTools Brew #9: Stripe: From 0 to their 1000 first users, Spotify: Lessons from Building and Open Sourcing Backstage, Building a Culture of Excellence with Stripe CTO...
Welcome to the DevTools Brew #9!
My name is Morgan Perry, co-founder of Qovery, and this is DevTools Brew newsletter, a weekly roundup of the latest trends and insights in the infrastructure and devtools industry.
To receive it in your inbox each week, subscribe here!
In this Issue #9:
💸 Latest Devtools Funding Rounds
📈 Stripe: From 0 to their 1000 first users
💻 Spotify: Lessons from Building and Open Sourcing Backstage
⭐ Star History Weekly Pick
🎙️Building a Culture of Excellence with David Singleton (CTO of Stripe)
I hope you will enjoy this sneak peek.
Let's dive in!
💸 Latest Funding Rounds
Aiden, the provider of modern, intelligent software packaging and deployment for Microsoft Windows, has secured $4.5M in its second round of seed funding
NetBird, an open-source private network platform, has raised €1.1M in a pre-seed funding round.Hudu, an IT Documentation tool, raised $5M in Series A
Mavenir, the network software provider locked up another large tranche of money, closing a $100M round led by Siris
Hyper App, a cloud service provider, raised an undisclosed amount in Seed
📈 Stripe: From 0 to their 1000 first users
Everything you didn't know about the Stripe 0->1000 story
Let's take a look at how Stripe grew their user base from zero to 1,000 and the strategies they used to achieve that.
But before, let’s start from the very very beginning
The co-founder of Stripe, Patrick Collison, won a programming competition when he was 16 years old in Ireland, which introduced him to Common Lisp, a programming language he spent time contributing to.
He moved to the US to attend MIT at age 17, leaving early to help his brother create a better version of eBay.
The brothers joined Y Combinator in its fourth batch and their company, Auctomatic, was eventually acquired for $5 million.
After working in Canada for a year, Patrick returned to MIT and started working on the first version of Stripe in 2009.
Getting their first user
Stripe's co-founders, Patrick and John, didn't have much knowledge of the financial industry but knew how to code.
They created a set of APIs that were easier to use than those of a payments gateway company that Patrick's friend worked at.
When someone signed up for Stripe, Patrick's friend set up a merchant account for that user.
The first customer of Stripe was Ross Boucher, a friend of Patrick and John's from the early days of Y Combinator.
Ross Boucher became the first employee at Stripe.
Stripe was originally named /dev/payments.
Their pricing page initially stated "We're finalizing our pricing right now, we'll be competitive."
The powerful analytics screenshot used by Stripe was actually from a plane-related mailing list that Patrick subscribed to, and had nothing to do with Stripe.
Getting the first 20 users
Stripe's first 20 users were all from Y Combinator (YC) companies
They aggressively recruited their first users using a technique called "Collison installation"
Patrick and John priced Stripe during beta at the most expensive end of the spectrum, at 5% +$0.5, to attract customers who were not incentivized by money and to force the team to build a great product
The high pricing also put pressure on the team to build a product that was at least twice as good as competitors like Paypal
The next 50-100 customers
Six months after acquiring their first customer, they dropped out of school to pursue Stripe full-time.
They launched a request for the team on HackerNews, which resulted in 300-550 signups on the waitlist.
They sent a Stripe swag kit to every customer who made their first transaction on Stripe.
They leaned into hiring founders, which helped them acquire more customers.
Selling a payment gateway is easier than selling other products because payments are fundamental to every business and people associate payments with pain.
By the end of the summer, Stripe accumulated around 1000 signups to their waitlist.
They raised $2m from investors such as A16z, Sequoia, Elon Musk, and Peter Thiel.
They laid low for 14 months and focused on building the product before launching to the public on September 29th, 2011.
Getting Customers Post Launch
Stripe focused on acquisition post-launch
They hosted a monthly Capture The Flag contest at their offices, which included free pizza and drinks
They started doing meet-ups for developers and hackers, which initially included Capture the Flag competitions but later became more general meet and greet events
They started hosting online Capture The Flag competitions, which attracted thousands of developers
Within six months, they started running ads on StackOverflow, which was the only channel they used for paid marketing in the first year
They emphasized the narrative of "PayPal founders backing the next payment internet company"
Reviews from internet bloggers were a cornerstone of how they acquired customers post-launch
Stripe layered in their marketing effort as they grew, adding more value and complexity to their approach
Their marketing efforts were handled with the same user empathy and thoughtfulness as their core product
—> Check out the full article published by Ali Abouelatta
If you're interested in learning more about how startups like Stripe grew their user base in the early days, you may enjoy subscribing to First 1000 newsletter, a newsletter where we dive deep about how founders got their first 1000 customers.
💻 Spotify: Lessons from Building and Open Sourcing Backstage
This article, originally published on Spotify Engineering, shares the story of Backstage, the company's developer portal. Backstage was created to solve the problem of slow onboarding and declining productivity caused by context switching and discoverability issues.
You will learn how autonomy is valued at Spotify, which prevented a centralized solution. Instead, Backstage was created as a developer-friendly, market-based platform that is now open-sourced and can be adopted by other companies.
Key Takeways
In this podcast, the Backstage story is discussed.
Spotify created Backstage to address the issue of decreasing productivity due to onboarding taking over 60 days for new hires.
The Platform team discovered two main issues causing the problem:
context switching
and discoverability.
Backstage provides a centralized platform that was necessary to address the problem, but the solution also had to be something that engineers would want to use.
The Backstage platform was designed to be the better solution, not the only solution, and was designed to give speed, scale, and autonomy.
—> Want to hear more about “The Lessons of Backstage and Spotify’s Autonomous Culture”? Here’s the link to access to this episode
⭐ Star History Weekly Pick
The Star History Weekly Pick is:
Pynecone: “A full-stack framework for building and deploying web apps in pure Python 🐍”
⭐️ 8.6k stars reached
Github: https://github.com/pynecone-io/pynecone
🎙️ Building a Culture of Excellence with David Singleton (CTO of Stripe)
David Singleton is CTO at Stripe, where he oversees engineering and design teams. Since joining Stripe, David has helped grow the technology org across the U.S. and developed new engineering hubs in Singapore and Dublin as well as Stripe’s fifth hub, remote engineering, across the globe. Before Stripe, he spent 11 years at Google, where he was VP of Engineering, leading product development and coordinating more than 15 different hardware partnerships. In this episode:
Hiring secrets that set Stripe employees apart
How to build a product-minded engineering team
How to operationalize meticulousness
Strategies for maintaining developer productivity at scale
The process of “friction logging” used to make better products
How AI is changing the way engineers work
Insights for planning and prioritizing at scale
Listen now on Apple, Spotify, Google, Overcast, and YouTube.
It’s already over! If you have any comments or feedback, Let’s talk about this together on LinkedIn or on Twitter.
Thanks for reading,
Morgan
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