🎙Conversation with Jimmy Soni about his book The Founders and the story of Paypal
“PayPal started off as a product with no use case. Then we had a use case but no business model. Then we had to build a sustainable business.” Amy Klement
Happy Friday everyone!
I’m very excited to share with you my conversation with Jimmy Soni. We discussed the many lessons from his new book The Founders about the origins of Paypal. I had an absolute blast and would highly recommend the book if you’re interested in business, technology, startups, and examples of company culture
Disclaimer: I write for entertainment purposes only. This is not investment advice. I am not your fiduciary or advisor. Do your own work and seek your own financial, tax, and legal advice before making any investment decisions.
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A few favorite quotes:
“I told Peter, look, there was a year and a half of history here that no one's documented. And I anticipate that if I went back and looked, there'll be even more. And then I think the thing that clinched it, as I said something like, look, I see this in my eyes as like Lord of the Rings, but set in Silicon Valley. And I think that's what got to him. Like, he like laughed. Even after that he had a bunch of really good questions for me, he like pushed back on the notion and the notion of the book, but then agreed to essentially what he agreed to was like I'll sit for interviews with you.”
“It's important that you had an inaugural CEO on the x.com side like Elon, an inaugural CEO, like Peter on the Cofinity side and an inaugural CTO in Max Levchin. Because the three of them are not going to hire people who cannot operate at the level that they operate. Not in the same ways. But part of what I discovered in, in researching this story is the high bar that was placed on aggressiveness hard work, intellect, puzzle, solving a kind of disposition to want to find the answer right, as opposed to leaning on experience.
And so you, you have three leaders who do set the tone for their respective organizations. But let me be clear though, that doesn't mean that they're hiring just lookalike people, right? There are plenty of people in this story who don't, who don't, um, there's a lot of heterodoxy. There's a lot of like differences and differences of opinion too, that come out in pretty profound ways.
But it does mean that when you are trying to recruit, you know, Peter is biased in the direction of like intelligent, interesting people. Max, when it comes to engineering, like he, he knows his stuff and is hiring people who are at his level as well. And so you don't, you know, I found again and again, that actually the company had remarkably low turnover for over it's four years.”
“The reason that Max and Peter and their sort of side of the company clashed with, uh, Elon is because of a difference of founder vision. It wasn't, it wasn't personal. It was Elon wanted to build X dot com into a financial services Superstore. The other side of the company felt like that's a big vision at a hard time, we're running out of money because of fraud. And because we have, you know, overhead and we're doing bonuses, we don't have much money left.
The market's cratering, uh, $12.5 million burn rate against 60 million or so in funding is only going to last you X amount of time. And it's not gonna last you long enough to do the financial services superstore. Peter acknowledged to me, he said, you know, you do have to give credit to Elon for having the biggest vision of what the company could have become, meaning that if the role, if the situation were different and maybe there were a longer runway, or there were some other dynamics that worked in their favor that maybe, maybe you could have turned that vision into a reality.”
“Big takeaway number three, and this is maybe the hardest one to get right, you, you need people who come from very different perspectives and you need them to be able to respectfully disagree with you with each other at a very high level. I read so much like of the internal email and documents and things that were shared with me. And I can tell you that, like, this was not a place for the faint of heart. It was a place with really high IQ points and a lot of just like very intense battling over ideas, building a team that has the capacity to do that strikes me as one of the hardest things to do in business, because it requires a few things.
One, you have to be courageous enough to walk into a room with David Sacks and tell him that he's wrong, which is not easy. Right. As played back to me by multiple employees, that's not easy. The second is you have to actually think very hard about what the right answer is in a given context, not what you think about the person presenting the idea, right?
So you have to have to think about like the idea itself. Not like I don't like Joe. Right. I have to think about Joe's idea. And then the third thing is you have to do this, despite the fact that the person that you're talking to might be a subordinate or might be three levels above you, meaning it has to be done in some way, irrespective of hierarchy.”
Questions and time stamps:
[Time] – Question
[00:01:00]: Introduction, how did Jimmy find the story and go about the research process?
[00:17:00]: Paypal’s unique team and recruiting.
[00:24:00]: Paypal’s journey of pivoting and iterating the product and business model.
[00:34:00]: Culture of truth-seeking and debate, workaholism, “Paypal PTSD.”
[00:42:00]: Paypal’s three leadership coups.
[00:49:00]: Risk-mitigation and timing were key to survival.
[00:57:00]: What were the lessons for the Paypal diaspora?
[01:061:00]: Culture of ownership and giving people a lot of responsibility quickly.
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