How the PayPal Help redefine success (i)

Abstract: Editor's note: This article is Conner Forrest, published in the TechRepublic. The Papal gang is not a mafia at all, but a general name for the diaspora. In general, they burned down our temples and drove us out of their

.

Editor's note: This article is Conner Forrest, published in the TechRepublic.

The Papal gang is not a mafia at all, but a general name for the diaspora.

In general, they burned down our temples and drove us out of their native land. As a result, we were displaced to all corners of the globe and had to build new homes.

PayPal's former CEO David sacks Coo,yammer This description of the PayPal gang. The so-called "they" refer to ebay, where the founders were partly to blame for the exodus, while PayPal's success was partly credited to ebay.

Startups that can start out and finally quit are pretty rare. And the exit value of more than 1 billion dollars is no doubt more rare. But it is rare to withdraw as a catalyst for local economic revival and a particular type of investment.

Although the probability of such a thing happening is extremely low, but PayPal did. In the summer of 2002, PayPal was sold to ebay by its founder, whose team members continued to set up several of the most important start-ups, while also making some of the most strategic investments ever made.

The PayPal gang, a word that is used by Silicon Valley with a love and awe, is defined as the "Mountain View" PayPal team before the IPO, or the Mountain View PayPal team before the acquisition, using which definition depends on which member of the founding team you are asking. This may sound like two distinct stages, but if you know that PayPal's IPO is only a few months ahead of the acquisition, it might be considered that the definition of the distinction is purely petty. According to the former PayPal CEO Peter Thiel estimates, PayPal gang members of about 220 people. This does not include the 700-person customer service team that was operating in Omaha, Nebraska.

These 220 people continue to start their own business and have since set up 7 different "unicorn" companies. The so-called unicorn refers to companies valued at more than 1 billion dollars. Of these 7 companies, 2 are valued at more than 10 billion dollars. These companies are:

Tesla Motors – $27.5 billion worth of linkedin– market value of $20.4 billion palantir– market value of $9 billion (shares not open company, valuation) SpaceX-market capitalisation of 7 billion US dollars (shares not open company, valuation) Yelp-market value 5.26 billion USD youtube– Acquisition price 1.65 billion USD yammer– acquisition price 1.2 billion USD

To make comparisons, we can look at Google employees. Google employs about 20,000 to 30,000 people, but the unicorn created by Google employees is harder to find. Thiel estimates that Google employees have only about 1 to 3 unicorn-only companies, and none of them is valued at nearly 10 billion dollars.

If Google's unicorn company number is 2, then it means PayPal to 1/100 of the manpower to achieve 3.5 times times the effect. In other words, PayPal's 1 billion-dollar company's success rate is 350 times times that of Google.

So where is the place where the PayPal is different?

Embark on a journey

In 1998, Max Levchin, Peter Thiel, and Luke Nosek were founded Confinity (the predecessor of Fieldlink, Inc.). Thiel and Levchin both met at Stanford University, where Thiel a guest lecture, and they started working on the concept of digital wallets. Initially, the company focused on mobile payments from PDA devices such as palm pilots, but one of Confinity's employees eventually developed a way to transfer money via e-mail. 1999, the service became PayPal.

As the product became more popular and initially integrated on the ebay platform, Confinity merged with the x.com of Elon Musk and adopted the name of the parent company. Finally, in the summer of 2001, after PayPal as a product success, the company adopted the name PayPal.

One of the activities of the IPO celebration Day is Peter Thiel (right) playing chess wheels with PayPal employees. David Sacks was the only one who beat Thiel. Photo: David Sacks/paypal

In many ways, PayPal's early stories are unique, but the stories behind them are more unique.

"When we started PayPal, I remember talking to Max early in the day that I wanted to start a company where everyone could be a good friend, a company that doesn't matter what happens to a company where friendships can last," said former PayPal CEO Peter Thiel. " This is a very utopian thing in a sense. Not only do we hire our own friends, but we also recruit people who we think can be really good friends. ”

Many of these friendships began at Stanford. Keith Rabois, David O Sacks, Reid Hoffman and Ken Howery almost all entered Stanford in the same period, and most of them were Thiel recruited into PayPal. Max Levchin also recruited some developers and former classmates from the University of Illinois at Urbana-Champaign.

What's unique about this is that most of the early PayPal employees and the PayPal gang were recruited through a circle of friends rather than headhunters. Sacks says these are "tarred". He says this explains why these people started with such a strong entrepreneurial focus.

But having a top-level team doesn't keep PayPal from getting into trouble. In fact, the story of PayPal, and the success of its employees, goes back to the specific issues and solutions that the team faced early on. Some of the major problems they encounter include:

-Accepted by consumers
-Fraud
-Regulatory issues
The hostility of-visa and MasterCard
-Competition from ebay

"It can be said that all the major problems that startups are likely to encounter have been met, so you have some experience dealing with all the types of problems you might encounter," Thiel said. "These problems are not easy to solve, but we have found a solution." ”

These issues are stressful and the team must respond. Instead of being overwhelmed by the problems, the PayPal team took the pressure as a means to maintain "crazy Focus" (the former VP of Business Development, Keith Rabois).

"The environment is so tense that we don't have much time and energy to think about the future, as we protect this ship and make sure our ship doesn't sink," Rabois said.

Pressure can also forge diamonds. Sacks says many of the common features (including some of the features in the new start-up) are implemented by PayPal's first home.

1, first launched the virus-type application of one of the companies: PayPal users can transfer money to the person without account, but the latter want to get money to open an account.

2, the first to adopt a platform strategy of one of the companies: Sacks said PayPal "is basically an ebay based app."

3, the first to provide embedded widget (widget) One of the companies: users can put PayPal payment logo on ebay auction. Embedded content later became the key to YouTube and its growth.

4, one of the first companies to rely on interactive product strategy: function as long as the development is completed immediately release, not subject to product cycle.

PayPal's corporate culture is also different. Rabois describes this culture as a "confrontational" culture, and the idea that the company offers can emerge in full debate.

The management of airborne came very rarely. On the contrary, PayPal is generally the internal promotion, but also the Department of Advanced staff to become the head of the department. For example, all designers report to the chief designer, and the chief designer should be the best designer. Applicants who have just received an MBA degree are often rejected because they are not flexible enough to handle product iterations.

"I think PayPal is a template for modern Silicon Valley start-ups in many ways," Sacks said.

For example, Facebook's "quick action, breaking the Rules" developer motto shows the agile concept and interactive product strategy that now permeates Silicon Valley start-ups.

While many of these practices now seem commonplace, it is important to know that 15 years ago Silicon Valley was very different. Rabois says now that he is communicating with others, many people think that Silicon Valley is working the way it has been.

"I think because so many people are still young, there is a lack of understanding of how we were deviant at that time," Rabois said. Both ideologically and culturally, we are far from the center of Silicon Valley. But interestingly, in a very short period of time, we have become officially recognised groups from extreme heterogeneity. ”

In a sense, PayPal is undoubtedly the product of the dotcom era. The company boasted that its monthly burn rate amounted to 10 million dollars. However, the PayPal team is doing business in a way that Silicon Valley has never seen before.

Use their own way to do things so that PayPal team to be rewarded. At the end of 2001, PayPal filed an IPO, and then in February 2002 it realized its IPO. According to the PayPal website, the company's first-day stock price soared 54% to 20.09 dollars per share.

After the IPO, at an ebay user conference in June 2002, ebay users put on PayPal t-shirts to show support for PayPal's integration into ebay. 1 months later, PayPal agreed to sell it to ebay, the same year the deal was completed.

To be Continued ...