The reality is there's very little evidence for an actual "broader slowdown". GDP growth in the US was decent in the last quarter despite a huge decline in home sales and headwinds from inflation, and unemployment remains at record lows. There's certainly some signs for concern, but the only real, persistent decline has been in the stock market (which, honestly, is why this whole period is kinda weird).

The truth, when I look at these stories, is many of these tech companies expected the major changes during COVID, which lead to huge boosts in revenue for a lot of tech companies, to persist post-COVID, and that simply didn't pan out. The result is a lot of businesses with bloated workforces predicated on long-term financial projections that haven't panned out.

But, Stripe can't admit they made a major strategic blunder--the exact same blunder made by companies like Peloton--so they have to blame it on "a broader slowdown" since then they have an exogenous factor they can point to rather than admitting they were just caught up in the techno-optimism of a transformed post-COVID society.

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.”

For example, Lyft is laying off people today.

Are we in a different universe or what?

> nominal consumer expenditures, has remained strong.

Compared to when? Not last year for sure.

https://fred.stlouisfed.org/series/PCE

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...

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.

It is slowing down.

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.

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?

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?

What do you there is no slowdown? It slows down everywhere. A lot of companies' revenue is slowing down.

I thinks as a payment processor, they are in a better position than most to predict sales trends. This effect might be restricted to their segment of the market. But if the payments they process are down significantly, then does it matter (to Stripe) if parts of the economy that they aren’t involved in are more robust?

I’m not excusing actions, but they have more data on the economy than most, just from their position in it. They may have thought (their part of) the market was going to keep growing (the mistake), but that doesn’t change the fact that it isn’t.

I just feel bad for everyone affected.

Stripe needs to 6-7x its processing to be one of the largest.

Closest comparable is Adyen, processes 516B with 2500 employees.

Stripe processes 640B with 7000 employees.

I'm not sure about 'broader slowdown' but in the industry I'm in we've seen a massive slowdown in signups and expansions in the existing customers. When we speak with our customers, especially banks, they are seeing massive slowdowns on their side.

Someone has bad metrics here, and when most of our customers across a wide range of industries are laying off, then I'd say that's pretty broad.

The last recession had a pretty clear cause you could point your finger at: The collapse of subprime mortgages. This one (presumably we're about to experience one) and the first dot-com crash didn't seem to be caused by anything besides a critical mass of businessmen agreeing "Well look at that, we're headed into an economic slowdown!"

Tech didn’t get hit by interest rates, it’s just a reallocation of that influx of money back to other sectors. People didn’t stop using tech. Now they reallocated out of tech (the way it was supposed to be around 2019), and all these shithead companies are saying “we’re fucked, our stock tanked”. No, your stock went back to healthy levels, your stock was just a bank for two years, that’s all.

Anecdotally my indie friends all report modest revenue growth this year while my big tech friends report more work for less money (due to equity grants decline).

From the data I see, the “reality” is not the failed indie dev but the failed inefficient big tech company.

I wish I could be in your bubble. In mine, people have been spending more on less month after month. Businesses are seeing slowdowns. Things are going to be even worse when the winter heating starts.

1) The housing market is the largest asset base in the world's wealthiest country and changes in that market reliably predict macroeconomic downturns (1). 2) E-commerce transactions are supported more than the economy as a whole by discretionary income. Interest rates drastically change consumers' spending habits; when rates rise, discretionary spending drops as consumers save more (2). You can infer that the GDP of e-commerce decreases at a rate higher than the larger economy because of that drop in spending. 3) Stripe has a very high retention rate for its customers. That counterintuitively increases the volatility of its stock because of increasing interest rates (3)

Beyond the appeal to intuition you made around tech companies assuming that post-COVID demand would remain, there are plenty of reasons that a payment processor that primarily services e-commerce would need to downsize. They are simply more sensitive to macroeconomic conditions.

[1] https://seekingalpha.com/article/4535186-how-to-predict-a-re... [2] https://www.investopedia.com/ask/answers/071715/how-do-chang... [3] https://whoisnnamdi.com/high-retention-high-volatility/

That is correct. However, I work as a consultant and deal with a lot of senior execs at large companies (mostly non-tech) and I can tell you that they are all in a panic right now and expect an absolute economic bloodbath next year. It's going to become a self-fulfilling prophecy. It really feels like Wile E Coyote after he's run off a ledge but hasn't realized it or started falling yet. Very weird.

I suppose they could say "we thought the economy might contract in 2022 as it would eventually, but that risk was more palatable than not growing and missing out vs our competitors if the contraction didn't happen."

A lot of this was driven by covid-cautious WFH culture. Someone working from home in the Bay Area in January 2022 might not realize the extent other industries are back in the office and other regions are done with covid.