Jimmy Soni - The Founders : The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley

The Founders

The Story of Paypal and The Entrepreneurs Who Shaped Silicon Valley

Jimmy Soni

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To my daughter, Venice, who arrived just as this project started, and to my late editor, Alice, who left us just as it finished.

It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.

Niccol Machiavelli, The Prince

Those who have learned to walk on the threshold of the unknown worlds, by means of what are commonly termed par excellence the exact sciences, may then, with the fair white wings of imagination, hope to soar further into the unexplored amidst which we live.

Ada Lovelace

Fuck, youre making me rummage around the attic, said Elon Musk.

We sat in his living room, but the metaphor still fit. Musk was about to tell me the story of PayPal.

At the moment we met, in January 2019, PayPala company he cofounded some two decades earlierwas likely the furthest thing from his mind. The day before, he had announced significant layoffs at Tesla Motors, the electric car company he has led since 2003. And just the week before that, he had cut one-tenth of the workforce at SpaceX, the aerospace manufacturer and transportation firm he started in 2002. With all this present swirl, I didnt know how much Musk would want to delve into the past, and I was ready for him to trot out a few familiar talking points and send me on my way.

But as he spoke about the internets development and PayPals origins, the stories spilled out. About his first internship at a Canadian bank. About building his first start-up, then his second. About what it felt like to be overthrown as CEO.

By the end of the afternoonnearly three hours laterI suggested we pause. We had only scheduled an hour together, and though Musk had been generous with his time, I didnt want to wear out my welcome. But even as he stood to show me out, he launched into another PayPal story. Forty-seven years old, Musk spoke with the enthusiasm of someone older asked to relive his glory days: I cant believe its been twenty years!

It was hard to believenot just the years that had passed, but how much PayPals alumni had accomplished in them. If you have used the internet at all in the last twenty years, youve touched a product, service, or website connected to the creators of PayPal. The founders of several of our eras defining firmsthe creators of YouTube, Yelp, Tesla, SpaceX, LinkedIn, and Palantir, among otherswere early PayPal employees; others occupy top posts at Google, Facebook, and Silicon Valleys leading venture capital firms.

Both in the foreground and behind the scenes, PayPals alumni have built, funded, or counseled nearly every Silicon Valley company of consequence for the last two decades. As a group, they constitute one of the most powerful and successful networks ever createdpower and influence captured in the controversial phrase the PayPal Mafia. Several billionaires and many multimillionaires have emerged from PayPals ranks; the groups combined net worth is higher than the GDP of New Zealand.

But to look only at their wealth and impact on technology is to miss the groups wider imprint: PayPals alumni have built world-changing micro-lending nonprofits, produced award-winning films, written bestselling books, and advised politicians at every levelfrom the state house to the White House. And theyre far from done: Today, PayPal alumni have taken as a mission everything from cataloging the worlds genealogical records to restoring three billion acres of forest ecosystems to scaling lovebringing their PayPal experience to bear in each case.

Theyve also been at the center of the biggest social, cultural, and political controversies of our age, including bitter fights over free speech, financial regulation, privacy in technology, income inequality, the efficacy of cryptocurrency, and discrimination in Silicon Valley. For its admirers, PayPals founders are a force to be emulated. For its critics, the group represents everything wrong with big techputting historically unprecedented power into the hands of a small clutch of techno-utopian libertarians. Indeed, it is hard to find a lukewarm opinion about PayPals foundersthey are either heroes or heathens, depending on who offers the judgment.

And yet, despite all that, the PayPal days themselves are usually glossed over. If the early years come up at all, they are typically granted a polite paragraph crediting PayPal for making the later, splashier achievements possible. The groups subsequent successes are so legendaryand their controversies so conspicuousthat they steal the oxygen from the origin story. Space travel, after all, makes for better copy than payment services.

But this seemed odd to me. It was as if these people had grown up in the same tiny town, and no one had bothered to ask what was in the water. It also seemed a shame: To skip PayPals creation is to neglect the most interesting stuff about its founders. It is to miss the defining experience of their early professional livesone that defined so much of what came later.

As I began poking around, asking questions about PayPals beginnings, it became clear just how much of the story had been overlookedand how many of its central figures were absent from the retellings. More than one person I spoke to had never previously been asked about their PayPal tenure at length. And their stories were as rich and revealing as those of the household names.

Indeed, its in the recollections of scores of engineers, UX designers, network architects, product specialists, fraud fighters, and support personnel that the story of PayPal comes to life. As one former employee put it, You have folks like Peter Thiel, Max Levchin, and Reid Hoffman. But when I first got to the company, it was the database administrators who were thought of as gods.

Whether known or unknown, the hundreds of individuals who worked at PayPal from 1998 to 2002 consider the experience a watershed. It influenced their approach to leadership, strategy, and technology. Several PayPal alumni observed that theyd spent the rest of their careers seeking a team of comparable intensity, intellect, and initiative. There was something really special, and I think we may not have all realized it at the time, one member of the product team said. But now, when I go into teams, Im just looking for what is that magic that we saw in the early days of PayPal. And its rare, but its what we keep searching for.

One employee remarked on PayPals butterfly effectnot just in the achievements of people like Musk, Levchin, and Hoffman, whose creations have touched millions, but in the lives of the hundreds present at the creation. It is something that defines me and my life, and probably will for my entire life, he said.