#233 Elon Musk, Peter Thiel, Max Levchin (PayPal)

733 snips

Feb 23, 2022

Dive into the intense world of PayPal's founders, where unconventional backgrounds fueled their journey. Explore the fierce rivalry between Confinity and X.com, showcasing resilience and innovative problem-solving. Discover how the dynamic culture and strategic funding choices helped them navigate early challenges. Elon Musk's pivotal moments reveal his drive and vision for the future, while vibrant team events reflect a blend of competition and camaraderie. The narrative captures the essence of entrepreneurship in Silicon Valley.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

ADVICE

Life's Shaping Factors

Your life will be shaped by what you create and who you create it with.
Find people who challenge you and make you better, and build things together.

INSIGHT

The Value of Origin Stories

Skip the origin stories, and you miss the defining experiences of their early careers.
Focus on who they were before fame, and what foundations they built.

ANECDOTE

Early PayPal: Hustlers, Not Heroes

PayPal's early team was full of improvisers with gumption, fear, and arrogance.
They were hustlers figuring things out, not yet the big players they'd become.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

The Founders

The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley

Jimmy Soni

In 'The Founders', Jimmy Soni delves into the turbulent early days of PayPal, a company that would become one of the world's foremost payment platforms. With hundreds of interviews and unprecedented access to internal material, Soni chronicles the challenges faced by the founders, including bruising competition, internal strife, online fraud, and the dot-com bust of the 2000s. The book highlights how this group of entrepreneurs, often referred to as the 'PayPal mafia', went on to form, fund, and advise leading companies such as Tesla, Facebook, YouTube, SpaceX, and LinkedIn. It is a story of iteration, inventiveness, and the profound impact these individuals had on modern technology and entrepreneurship.

A mind at play

How Claude Shannon Invented the Information Age

Jimmy Soni

Rob Goodman

This biography, written by Jimmy Soni and Rob Goodman, reveals the full story of Claude Shannon for the first time. It chronicles Shannon's life from his small-town Michigan roots to his groundbreaking work at MIT and Bell Labs. The book highlights his contributions to digital circuit design and information theory, as well as his interactions with notable figures like Alan Turing, John von Neumann, and Albert Einstein. Shannon's personal life, including his interests in juggling, unicycling, and inventing unusual devices, is also explored. The authors provide a detailed and engaging account of Shannon's impact on the information age and his unique blend of playfulness and genius[2][3][4].

The Hitchhiker's Guide to The Galaxy

Douglas Adams

The book follows Arthur Dent, an ordinary Englishman, whose house and planet are about to be demolished. He is rescued by his friend Ford Prefect, an alien researcher for the 'Hitchhiker's Guide to the Galaxy'. Together, they embark on a journey through space, encountering various characters such as Zaphod Beeblebrox, the two-headed, three-armed president of the galaxy, Trillian, a human woman, and Marvin, a paranoid android. The story involves their adventures on the spaceship Heart of Gold, which has an Infinite Improbability Drive, and their quest to understand the ultimate question of life, the universe, and everything, which is revealed to be '42'. The novel is known for its humor, satire, and imaginative storytelling.

The hard thing about hard things

building a business when there are no easy answers

Ben Horowitz

In this book, Ben Horowitz shares his personal and often humbling experiences in the tech industry to offer essential advice and practical wisdom. He addresses various hard decisions and challenges that business leaders face, such as firing friends, managing company culture, handling layoffs, and making tough strategic decisions. Horowitz emphasizes the importance of honesty, resilience, and adaptability in leadership, drawing from his experiences with companies like Loudcloud and Andreessen Horowitz.

Confessions of an Advertising Man

David Ogilvy

First published in 1963, this book revolutionized the world of advertising and became a bible for the 1960s ad generation. It covers topics such as how to manage an advertising agency, acquire and retain clients, build great campaigns, write potent copy, and navigate office politics. The book is filled with Ogilvy's pioneering ideas, inspirational philosophy, and practical advice, making it an essential blueprint for good practice in business.

Return to the little kingdom

Steve Jobs, the Creation of Apple and How it Changed the World

Sir Michael Moritz

This book is an updated version of Michael Moritz's 1984 classic, 'The Little Kingdom: The Private Story of Apple Computer.' It tells the story of Apple's first decade alongside the histories of Steve Jobs and Steve Wozniak. The book brings readers inside the childhood homes of Jobs and Wozniak, records how they dropped out of college and founded Apple in 1976, and follows the fortunes of the company through the mid-1980s. The new material tracks the development of Apple to the present and offers an insider’s profile of Jobs, whose genius made Apple the powerhouse it is today. The book provides detailed insights into the early days of Apple, including the personal histories of its founders and key players like Mike Scott, Mike Markkula, and Rod Holt[2][4][5].

Benjamin Franklin

An American Life

Walter Isaacson

This biography by Walter Isaacson chronicles the life of Benjamin Franklin from his early days as a runaway apprentice to his later years as one of America's most influential Founding Fathers. The book explores Franklin's contributions to science, politics, and literature, including his work on the Declaration of Independence, his diplomatic efforts in France, and his inventions such as bifocal glasses and the lightning rod. Isaacson also delves into Franklin's personal life, including his relationships and his philosophical underpinnings that shaped American society. The narrative highlights how Franklin helped forge the American national identity and his enduring relevance in the twenty-first century.

Liftoff

Elon Musk and the Desperate Early Days That Launched SpaceX

Eric Berger

Liftoff chronicles the turbulent beginnings of SpaceX, highlighting Elon Musk’s vision for space exploration and the company’s struggles and successes. The book draws on exclusive interviews with former and current engineers, designers, mechanics, and executives, including Elon Musk. It covers the first four launches of the Falcon 1 rocket, the challenges faced by the team, and the pivotal moments that transformed SpaceX into a leading-edge rocket company. The narrative includes stories from various locations such as El Segundo, Texas ranchland, and the Kwajalein atoll, where SpaceX conducted its early launches.

What Do You Care What Other People Think?

Further Adventures of a Curious Character

Richard Feynman

This book is a captivating collection of reminiscences from Richard Feynman, describing various aspects of his life, from his love of beauty and college pranks to how his father taught him to think. It includes his dramatic revelation of the cause of the space shuttle Challenger disaster and stories about his beloved first wife Arlene. The writings are infused with Feynman's curiosity and passion for life, often intensely moving and sometimes humorous.

Elon Musk

Tesla, SpaceX, and the Quest for a Fantastic Future

Ashlee Vance

This book is an authorized biography that delves into the life of Elon Musk, from his tumultuous childhood in South Africa to his rise as a visionary entrepreneur in Silicon Valley. Ashlee Vance captures Musk's journey through his various ventures, including PayPal, SpaceX, Tesla, and SolarCity. The book examines Musk's unique personality, his insatiable drive, and his ability to thrive through hardship. It also explores the broader context of American innovation and the challenges of global competition, positioning Musk as a contemporary amalgam of legendary inventors and industrialists like Thomas Edison, Henry Ford, and Steve Jobs.

Zero to One

Notes on Startups, or How to Build the Future

Peter Thiel

In 'Zero to One,' Peter Thiel argues that true innovation comes from creating something entirely new, going from 'zero to one,' rather than incrementally improving existing ideas. He emphasizes the importance of vertical progress through technology and the benefits of monopoly in driving innovation. Thiel also discusses the need for long-term planning, the importance of finding the right co-founders, and the power law in startup success. The book challenges conventional wisdom and encourages readers to think critically and aim big to build the future[2][3][5].

Finding the Next Steve Jobs

How to Find, Hire, Keep and Nurture Talent

Nolan Bushnell

Gene Stone

In 'Finding the Next Steve Jobs', Nolan Bushnell shares unconventional strategies for identifying and nurturing creative talent. Bushnell emphasizes the importance of hiring passionate individuals, celebrating failures, and fostering a culture of innovation. The book offers insights into creating a workplace that encourages creativity and risk-taking, drawing from Bushnell's experiences as a pioneer in the tech industry.

Overnight Success: Federal Express and Frederick Smith, Its Renegade Creator

Vance Trimble

This book provides a detailed look at the life of Frederick Smith, the founder of Federal Express, and the challenges he faced in establishing the company. It explores Smith's vision for overnight package delivery and the financial struggles he encountered, including accusations of bank fraud. The book also highlights FedEx's eventual success and its impact on the logistics industry.

Tribe of Mentors: Short Life Advice from the Best in the World

Tim Ferriss

Driven from Within

Michael Jordan

Mark Vancil

In 'Driven from Within,' Michael Jordan provides a detailed look at his life, from his early days in basketball to his illustrious NBA career. The book highlights his dedication, hard work, and the internal drive that made him a legend. It also delves into his business ventures, particularly the creation and success of the Air Jordan brand, and features contributions from family members and colleagues. The book is a testament to Jordan's relentless pursuit of excellence and his ability to inspire others through his story.

Henry Ford's Autobiography

Henry Ford

Creativity, Inc. (The Expanded Edition)

Overcoming the Unseen Forces That Stand in the Way of True Inspiration

Amy Wallace

Ed Catmull

This book provides valuable insights into the creative process and how to overcome obstacles that hinder true inspiration. It explores how to foster innovation, collaboration, trust, communication, risk-taking, failure, and resilience within any organization. The expanded edition includes a new introduction, two new chapters, four new chapter postscripts, and updates throughout. Catmull and Wallace share personal anecdotes and detailed looks at Pixar’s creative process, offering practical advice on creating a culture of creativity and excellence[2][4][5].

The Mythical Man-Month

Essays on Software Engineering

Frederick P. Brooks

In this book, Frederick P. Brooks discusses several key issues in software engineering, most notably 'Brooks's Law,' which states that adding manpower to a late software project makes it later. The book explores the complexities of large programming projects, the difficulties in measuring work in 'man-months,' and the importance of effective communication and team management. It also includes insights from Brooks's experience managing the development of IBM's System/360 and OS/360.

Insanely simple

The Obsession That Drives Apple's Success

Ken Segall

In 'Insanely Simple,' Ken Segall delves into the culture and strategies that made Apple a leader in innovation. The book highlights Steve Jobs' relentless pursuit of simplicity, which was a key factor in Apple's success. Segall shares personal anecdotes and stories from his time working with Jobs, contrasting Apple's approach with that of other companies like Dell and Intel. He emphasizes the importance of small groups of smart people, minimal bureaucracy, and the power of simplicity in achieving clarity and efficiency. The book provides valuable insights into how simplicity can be a driving force for success in any organization.

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

----

Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com

----

[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

----

Get access to the World’s Most Valuable Notebook for Founders at Founders Notes.com

----

“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

----

Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here.

----

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