Peter Thiel tells the founding story of PayPal “When you start one of these companies, it’s typically not the case that you get the whole idea fully formed instantaneously,” Thiel begins. “There was this incredible internet boom going on in Silicon Valley in the late 1990s. It felt like there was this open frontier or gold rush, and one of the natural things to look at was finance.” At the time, Thiel was very interested in the idea of creating new forms of money. “There’s always something super mysterious, powerful, and important about money,” He explains. “And we had this general idea to do something with security, money, and payments very early on in the founding of the company. Then you iterate a lot on how to get the idea out.” Thiel continues: “The critical question for any consumer internet product is not what the idea is, but ‘how do you get distribution?’ There had been a lot of internet payments companies that had already started and failed by 1998… They would’ve worked if everybody used them, but you could never get the first person to start. So the challenge was how to make it go viral and how to get something to work where it’s good for the first person, the 10th person, and the 100th person. Once you have millions of people, you have a network and network effects. That was sort of the chicken and egg problem we wanted to solve.” Eventually the team stumbled on the idea of linking money with email: “There were already 300 million people in 1999 that had email accounts. So if you could send money to an email address… you didn’t need both counterparts to a transaction to be part of the PayPal network. Only the sender could be part of it, and then the recipient would sign up as they took money out. We started with the 24 people in our office, and they sent money to friends and other people. Then we gave these referral bonuses of $10 if you got someone to sign up, and it just grew exponentially. It grew about 7-10% compounding daily… We had 1,000 people in mid-November of 1999. By the end of December it was 12,000. By February 3, 2000, it was 100,000. By mid-April 2000, it was up to a million.” The other critical component of PayPal’s success was starting with customers who had an intense need and minimal downside risk: “One of the natural places that it started was on the eBay auction site where you had small dollar transactions of maybe $40 as the typical amount. If you send a check across the country, that’s a 10 day delay. It’s slow, and most people aren’t set up to process credit cards.” Thiel reflects on what it felt like to go from 1,000 users to 1 million in just a few months: “[It felt like] you were at the forefront of some sort of revolutionary thing. It’s incredibly exciting and incredibly scary. It was like ‘we’re going to take over the world’ or ‘we’re all going to die’ and you move between those two several times a day.” Fraud was a major challenge the company had to solve — especially because making a product hard to defraud is usually at odds with making it easy to use. Thiel had an interesting perspective of operating in strange regulatory zone with this new form of moving money: “I often thought of it at the time that we were in a race between technology and politics. The politicians didn’t like us, but if we got the PayPal network to be big enough, it would sort of overwhelm the regulators and they’d have to accept it as a fait accompli… One of the execs at PayPal said we needed to hire a whole bunch of lawyers to tell us what we can or can’t do, and we said no we’re not going to hire them. They’ll just tell us what we can’t do. We have to just go ahead and not hire the lawyers and just do it.” Video source: @RubinReport (2018)

Patrick Collison on thinking for yourself: "Nobody is going to teach you to think for yourself. A large fraction of what people around you believe is mistaken. Internalize this and practice coming up with your own worldview. The correlation between it and those around you shouldn't be too strong unless you think you were especially lucky in your initial conditions."

"Advice I'd Give Past Me" by Patrick Collison

Citadel founder Ken Griffin: “Every CEO is a salesperson” When Citadel founder Ken Griffin was getting started, his mentor offered Ken anything he wanted from his office. Ken took a $10 plaque off the wall that said, “If we’re all going to eat, someone’s got to sell.” Ken explains why: “That’s the story of being an entrepreneur… Every CEO is a salesperson. They have to sell a venture capital firm. They have to sell a customer. They have to sell an employee… You are always selling. And if you don’t like to sell, here’s my advice: get over it! I had no interest in selling when I was 20 years old.” Ken recalls traveling to Switzerland to raise capital for Citadel in the early day and how demoralizing his two scheduled meetings were. The first person thought he was meeting with a different person who also had the last name Griffin and promptly walked out. The second person said to Ken, “It’s so sad that such a bright young man picked the wrong career.” Ken reflects, “You just have to play through these moments.” Today Citadel is considered one of the most successful hedge funds in history, having generated ~$74 billion in net gains since inception. Video source: @YaleSOM (2023)

Max Levchin on leadership: "The most important skill of a leader is getting people to be their absolute best... At PayPal, I remember always being blown away by the ability of my co-founder, Peter Thiel’s, ability to extract stellar results from people who were often dismissed by others as “too hard to work with” or “too weird” by zeroing in on their unique abilities very quickly and putting them in situations where that very ability had maximum leverage attached to it."

"The Most Important Skill of a Leader" by @mlevchin

Jeff Bezos on how to build a business strategy “I very frequently get the question: ‘What’s going to change in the next 10 years?” And that is an interesting question… But I almost never get the question: ‘What’s not going to change in the next 10 years?’ And I submit to you that that second question is actually the more important of the two.” Jeff argues: “You can build a business strategy around the things that are stable in time. In our retail business, we know that customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery. They want vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says, ‘Jeff I love Amazon, I just wish the prices were a little higher.’ Or, ‘I love Amazon, I just wish you’d deliver a little slower.’ Impossible. And so we know the energy we put into these things today will still be paying dividends for our customers 10 years from now.” He gives AWS as another example. It’s impossible to imagine AWS customers asking for a less reliable or more expensive service. ”When you have something that you know is true, even over the long term, you can afford to put a lot of energy into it… The big ideas in business are often very obvious, but it’s very hard to maintain a firm grasp of the obvious at all times. But if you can do that and continue to spin up those flywheels and put energy into those things, over time, you build a better service for your customers on the things that genuinely matter to them.” Video source: @awscloud (2012)

I recently started using @perchdotapp and I’m absolutely hooked. It’s a clean and organized space that houses all blogs and newsletters from founders,authors, etc. and the best part is that we can listen to them while I’m on the go. If you’re a reader, I highly recommend checking out @perchdotapp.

Been using @perchdotapp in my daily routine to keep up with blogs and newsletters. The UI is smooth and the text-to-speech is solid. @mikemcg0 was right — it is like Spotify for reading. Grateful someone finally built this.

Reputation is one of the most under-appreciated things that compound in tech