Funding Frenzy: PayPal's Crucial Decisions

What I learned from reading The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley by Jimmy Soni.

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[0:50] Your life will be shaped by the things that you create and the people you make them with.

[2:45] A Mind at Play: How Claude Shannon Invented the Information Age (Founders #95) 

[3:17] Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future (Founders #1 and #30) 

[4:48] It is hard to find a lukewarm opinion about PayPal's founders.

[5:29] To skip PayPal's creation is to neglect the most interesting stuff about its founders. It is to miss the defining experiences of their early professional lives —one that defined so much of what came later.

[6:39] There's just so many times I put down the book and I'm like, “That is really, really smart, what they just did there.”

[6:59] It perfectly captures when they [Musk, Thiel, Sacks, Hoffman, Levchin, Rabois] were just hustlers trying to figure it out.

[8:31] For the next several years, the company’s survival was an open question. They were sued, defrauded, copied, mocked— from the outset. PayPal was a startup under siege. Its founders took on multi-billion dollar financial firms, a critical press and skeptical public, hostile regulators, and even foreign fraudsters.

[10:14] From Henry Ford’s autobiography: That is why I never employ an expert in full bloom. If ever I wanted to kill opposition by unfair means I would endow the opposition with experts. They would have so much good advice that I could be sure they would do little work.

[11:11] Confessions of an Advertising Man by David Ogilvy (Founders #89)

Benjamin Franklin: An American Life by Walter Isaacson (Founders #115)

Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator by Vance Trimble (Founders #151) 

[12:03] A wall in the engineering office had two banners. One was titled The World Domination Index. The World Domination Index was a total count of PayPal's users that day. The other was a banner bearing the words Memento Mori —Latin for remember that you will die. PayPal's oddball team was out to dominate the world, or die trying.

[15:37] At PayPal disharmony produced discovery.

[16:22] Steve Jobs The Lost Interview Notes

[17:36] Properly understood PayPal story is a four year odyssey of near failure followed by near failure.

[20:22] He showed early signs of his hallmark intensity. He wanted to be the best at everything he did.

[21:08] Tribe Of Mentors: Short Life Advice from the Best in the World by Tim Ferriss 

[21:50] Knowledge Project: Marc Andreessen

[23:01] What would Shimada do? I understand how this guy thinks. I've studied how he thinks. Now I'm presented with a difficult decision. I'm running it through my own calculus—but to enhance that is like, let me ask what would Shimada do in this situation? That is genius. 

[23:47] The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz (Founders #41) 

[25:19] Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel (Founders #31)

[29:25] Everybody engaged in complicated work needs colleagues. Just the discipline of having to put your thoughts in order with somebody else is a very useful thing. —Charlie Munger

[31:14] The Hitchhiker's Guide to the Galaxy by Douglas Adams

[32:25] "Surely You're Joking, Mr. Feynman!": Adventures of a Curious Character and "What Do You Care What Other People Think?": Further Adventures of a Curious Characte by Richard Feynman

[35:32] He walked into Musk's his bedroom. The room was literally filled with biographies about business luminaries and how they succeeded. Elon was prepping himself and studying to be a famous entrepreneur.

[38:32] Musk had learned that startup success wasn't just about dreaming up the right ideas as much as discovering and then rapidly discarding the wrong ones.

[39:04] Keep iterating on a loop that says, Am I doing something useful for other people? Because that is what a company is supposed to do. Too much precision in early plans, Musk believed, cut that iterative loop prematurely.

[40:10] My mind is always on X, by default, even in my sleep. I am by nature, obsessive compulsive. What matters to me is winning and not in a small way. —Elon Musk

[48:20] PayPal prioritized speed on everything over everything else except in one category —recruiting. They would rather staff slowly then compromise on quality.

[48:47] Max would keep repeating “As hire As. Bs hire Cs. So the first B you hire takes the whole company down.”

[50:52] Do Things That Don’t Scale by Paul Graham 

[52:31]  Is there something that you're not working on that could be a more simple version of what you're currently doing?

[55:30] Why is that crazy? Because three years later Elon Musk will make $180 million from this broken situation that he's currently finds himself in.

[55:48] Return to the Little Kingdom: Steve Jobs and the Creation of Apple by Mike Mortiz (Founders #76)

[57:48] Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX by Eric Berger (Founders #172) 

[59:02] There is no speed limit by Derek Sivers

[1:03:51] Make your product as easy as email.

[1:05:08] Insanely Simple: The Obsession That Drives Apple's Success by Ken Segall (Bonus episode in between #112 and #113)

[1:10:19] In Levchin and Thiel, Musk found something he rarely encountered— competitors as driven to win as he was.

[1:11:36] “I really liked this Elon guy”, Levchin remembered thinking. “He’s obviously completely crazy, but he's really, really smart. And I really like smart people.”

[1:18:23] Oftentimes it's better to just pick a path and do it rather than vacilitate endlessly on the choice. —Elon Musk

[1:18:40] Finding the Next Steve Jobs: How to Find, Keep, and Nurture Talent by Nolan Bushnell (Founders #36)

[1:19:39] He was going to tame us young whippersnappers with these like seasoned financial executives or whatever. And we're like, uh, these are the same seasoned executives at these banks who can't do jack shit, who can't compete with us. This doesn't make sense. —Elon Musk

[1:21:16] The founder may be bizarre and erratic, but this is a creative force and they should run the company. —Elon Musk

[1:22:26] Mythical Man-Month, The: Essays on Software Engineering by Frederick Brooks 

[1:23:33] Company leaders set a cultural tone of impatience.

[1:26:17] Every moment of friction for the customer was fat to be cut.

[1:31:00] Give a good idea to a mediocre team, and they will screw it up. Give a mediocre idea to a great team, and they will either fix it or come up with something better. —Ed Catmull in Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration (Founders #34) 

[1:31:35] Peter Thiel’s tendency to buck convey convention had nothing to do with math or political philosophy. It had to do with people. He didn't give a shit. He cared about smart people who worked hard.

[1:37:25] PayPal was a company of extremely aggressive people with a real bias for action.

[1:38:24]  You can copy what I'm doing, but I'm only focused on this. While payments is just one part of your gigantic business.

[1:40:32] PayPal began this effort as it had begun much else over the prior years with a little planning, quick action, and faith in itself to iterate its way to success.

[1:47:25] Just because someone shoots five bullets at you and misses does not preclude the sixth one from killing you.

[1:47:33] A great Steve Jobs story

[1:51:23] Reid Hoffman forces himself to regularly ask others, "Who is the most eccentric or unorthodox person, you know, and how could I meet them?"

[1:52:25] It is hard but fair. I live by those words. —Michael Jordan in his autobiography (Founders #213)

[1:52:34] PayPal's earliest employees reserve their highest praise for those who tread the same stony road— founders across varied fields of endeavor. "Those that bring the big ideas into hard, unpredictable reality are the practitioners, the high-leverage ones, and I admire them almost without reservation," Max wrote "One key ingredient of being this kind of person is an almost irrational lack of fear of failure and irrational optimism. —Max Levchin

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

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“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast