Stripe Raises $20M From General Catalyst, Sequoia, Thiel

That said, most naturally occurring growth is exponential. In the case of a webservice, whenever a new user increases the chance of another new user signing up by at least some constant factor, no matter how small, you have exponential growth. Things working against that are churn and later, like in the case of Facebook, the saturation in your market. If you discount for those factors (I don't think they hugely affect Stripe right now anyway), EVERY application that has even the tiniest viral co-efficient, even just traditional word of mouth, will grow exponentially.

The specific case of Stripe transactions is particularly interesting. They grow in both the number of companies using Stripe as well as the size of each of those companies. I have no knowledge of Stripe metrics, but I am fairly certain they've seen exponential growth over the past months. Much like Square btw ;)

I've also had a lot of clients that used paypal to sell stuff. Paypal hated them too.

Look at stripe for example, they're an excellent company that has proven their product is in demand. It's much more reasonable for a company like this to be allowed to scale versus the likes of pets.com.

I'm completely outside and absolutely not in the know but it seems to me like (a) professional high risk investors collectively investing $100ms in an industry where companies can be worth $100bs do not make a bubble (the 2001 bubble was in the trillions) and (b) a lot of the typical "bubbly" claims about new economic realities might be true this time.

I think both are evident here. The the former, this is $20m into a company that provides a service to customers that are willing to pay for it, not $200m into something with impossible to value (it could be zero) potential. High risk - yes. Irrational, foolish or systematically risky - I think no.

For the latter, this is a company that has already made an impact in the giant dominated world of financial transactions. The important part is that they did it with very little (relatively) capital input. At a pinch they probably could have done it with less, though maybe more slowly. That is a "new economic realities" type occurrence.

Maybe the world's huge credit card companies and banks can be partially replaced with much smaller new companies. Maybe paypal has run its course. Founded with millions by a few smart guys. Growing to massive scale (with the help of $200m investment). Spending 10-15 years in a dwindling cas cow phase and ultimatey being succeeded. Maybe it is viable for companies to exist on a smaller cycle: being founded, creating value and ultimately being outcompeted by new small companies in shorter timespans. etc. etc. That kind of thinking is bubbly in 2000 when its being used to justify $bn valuations for companies that lose money and don't really serve anyone. For a lot of the companies maturing now, they don't really need any justification, but maybe they can be explained this way. Stripe, from what I understand, creates real tangible economic value for its customers, charges for it and creates a lot of surplus value besides. Interestingly it helps other startups exist.

Heinleinian makes the (reasonable) argument that the interdependance (reliance on APIs) makes for economic fragility - investments fail making services fail making other services fail etc. But isn't this economies in general? Most B2C commerce would collapse if Visa & Mastercard went out of business. Construction collapsed when banking fails which collapsed when merchant banking screwed up. Interdependency is economics and overall its pretty robust.