HomeLatest newsWhen Elon Musk and Peter Thiel were young and innocent

When Elon Musk and Peter Thiel were young and innocent

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The most unexpectedly human and sweet side of the founders of PayPal and X.com

Elon Musk can be a vulnerable person. This is one of the startling conclusions of a book published in February about the founding of PayPal and the network of entrepreneurs and venture capitalists it spawned. It’s an impressive business story about the rise of the payments company. But it’s also a human story about Musk, peter Thiel and Max Levchin before they achieved greater fame and fortune.

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In The Founders: the Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley (The founders, the history of PayPal and the entrepreneurs who shaped Silicon ValleySimon & Schuster), Jimmy Soni captures the heady days of the dot-com bubble in 1999, when it seemed like any twentysomething could get the money for a startup. Musk had created an online bank called X.com, while Thiel and Levchin were starting what would become PayPal. The first office of that company was in the closet of a building.

Although entrepreneurs are often praised for their determination to pursue an idea, the book demonstrates that adaptability is just as important. Levchin looked to the company’s original purpose of sending money using Palm Pilots, the popular PDA (personal digital assistant) of the time. Musk had a dream of revolutionizing traditional banking. But the product that customers wanted was an easy payment service. Both startups found demand on eBay. X.com and PayPal became fierce competitors. Rather than fight to the death, they decided to merge.

Thiel’s financial acumen was already shining then. He led the company to quickly raise $100 million, a figure some employees found disappointingly small. Days later, the stock market began its downward spiral. With the cash in the bank, PayPal was able to apply to go public in 2001, a year in which fewer than 100 US companies went public.

After countless stories of misbehaving tech peers, PayPal’s story shows a more appealing side of Silicon Valley culture. Its founders were nerds at work and play, creating a meritocracy that trusted employees to do great things and were surprisingly forgiving when they made big mistakes. Levchin and Thiel spent hours trying to outdo each other in games of wits.

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eBay features prominently in the book. PayPal was so reliant on that portal that executives continually feared the tap would be cut off. This led to tough battles and a back-and-forth relationship that continues to this day. The auction site bought PayPal for $1.5 billion in 2002, broke it up in 2015, and has now moved most of the payment processing from its former subsidiary. Meanwhile, PayPal, worth $104 billion, is more than three times the size of its former parent.

Although PayPal’s founders were intense, winner-take-all types, they also had surprisingly sweeter sides. Thiel, who would be one of the first investors in Facebook, had an unofficial policy not to fire employees, because he considered it similar to war, which he said was a bad thing. He is an unexpected and conciliatory edict from someone who would later force the Gawker gossip website out of business and support Donald Trump’s presidential bid. Meanwhile, X.com stood out for the diversity of its workforce. Now Tesla is facing sexual harassment and discrimination lawsuits.

Musk was one of the people who held the position of CEO of PayPal. Discussions about technology, the name of the company and the general management led to her dismissal while he was abroad. But Musk was gracious in his farewell note to employees, praising Thiel, who helped orchestrate the coup, and who would later become an investor in SpaceX, Musk’s rocket startup.

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It was his second experience of being expelled from a company and, according to Soni, “it hurt him”. That helps explain why Musk made sure his subsequent ventures had boards packed with allies, including his brother Kimbal, who is an adviser to both Tesla and SpaceX.

The Founders he also gives due credit to Levchin, often overshadowed by his more controversial colleagues. He helped create one of the first commercial applications of what is known as captcha, that help determine if a portal visitor is human. He was also an early investor in the Yelp review site, and is now the CEO of Affirm, the lender. buy now pay later of 11,000 million dollars.

The PayPal mob, as they are often called, usually refers to males. However, the book also highlights the women who were a fundamental part of the company. Amy Rowe Klement, who rose to product executive, is credited with translating engineering vision into practical consumer use cases.

The author had impressive access to key players, including Musk, Thiel, and Levchin, along with those closest to them in those early years. It would have been illuminating to know more about how they then applied his PayPal experience. Still, the book is rich enough that readers can glean the lessons the founders learned in a more innocent time.

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