> But, Stripe can't admit they made a major strategic blunder
They quite literally say that?
“In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important:
We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”
There has not really been a broader slowdown in credit card processing volumes. Visa and MasterCard had good earnings and guidance last week. What’s really happened is exactly what BaseballPhysics said - the pace of Stripes share gain has slowed dramatically post-COVID.
What senior management says publicly, what they say internally, and what the actual truth is are not necessarily the same thing. The GP I think is suggesting what they're saying publicly is not necessarily the truth.
Why would I look outside? That's how you find out the weather.
I looked at the data. US GDP growth was positive in the third quarter. Unemployment is at record lows.
Again, there are headwinds. Inflation is high and as a result consumer confidence is low. That's bad. But the only people crying "recession" are people paying too much attention to the stock market. The real story is far more complex, and there's very little sign of a broad based economic slowdown.
Would you care to provide the data you're using to back up your claims?
For example, Lyft and Shopify who are one of the largest customers of Stripe is slowing down in their revenue growth. You can just look at their financials in the past few quarters. They even have layoffs themselves.
That majorly has negative impact on stripe's revenue.
Cool, two companies, one (Shopify) which saw a huge bump in revenues during COVID thanks to a rise in internet purchasing and is seeing the numbers slump back to normal as shopping habits revert to the mean, and the other (Lyft) that's in an industry that declined throughout COVID due to pandemic concerns and hasn't surged back in the face of competition from both Uber and traditional cabs.
Again: I have data about the entire economy. That data tells a story that's mixed but relatively positive.
You have two specific examples, each of which represent a corner of entire economic sectors, and those sectors represent only a fraction of the total economy.
And I'm supposed to conclude that you're the one who has it right?
> Cool, two companies, one (Shopify) which saw a huge bump in revenues during COVID thanks to a rise in internet purchasing and is seeing the numbers slump back to normal as shopping habits revert to the mean, and the other (Lyft) that's in an industry that declined throughout COVID due to pandemic concerns and hasn't surged back in the face of competition from both Uber and traditional cabs.
Why would your explanation matter?
The conclusion still remains. Their revenue slows down. Therefore, stripe's revenue slows down.
For sure, it is not growing faster.
You didn't contradict my point at all.
> Again: I have data about the entire economy. That data tells a story that's mixed but relatively positive
Stripe's revenue growth does indeed slows down. There is no dispute of that.
If Stripe was making 1 trillions USD more, they wouldn't have laid off people, obviously.
Now I or the founders claim it is because the macro economic is bad. You might contradict this part.
Well you have been taunting it for 2 comments now. Can you share your evidence? Or we should continue quibble a bit more first?
Yes, Stripe customers have seen slowing growth post-COVID which is why Stripe’s pace of share gain has slowed. Macro, ie nominal consumer expenditures, has remained strong.
You threw out random metrics and claimed it is still growing therefore Stripe's revenue should not slow down.
I claimed that two of the largest Stripe customers have their revenue slowing down, and this slows down stripe revenue. These 2 are just examples. Uber, Doordash, and many more companies who are Stripe customers also have their revenue slowing down.
Do you think you metrics is more relevant than stripe customers' revenue?
Stripe earns when their customers earn. My metrics is the most direct one.
Also, online purchase is only 15-20% of all purchases by volume. And we haven't accounted for Paypal, Square, and etc. Your metrics is crap...
You’re saying Stripes growth slowed because their customers growth slowed. Given the nature of Stripes business, this is tautological.
I’m saying, Stripes deceleration is not due to macro (ie overall macroeconomic conditions), but a result of post-Covid normalization in the business results of its customers. This is obvious, as overall nominal PCE have not slowed.
They quite literally say that?
“In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important:
We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.
We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”