The Billion-Dollar Ripple Effect: How PayPal Changed The Tech Industry Forever
🥇The First Move
The inception of this story dates back to 1988 when Peter Thiel and Max Levchin decided to develop a person-to-person payment platform, via a device known as Palm Pilots (a portable handheld computer-like device). Earlier, transactions took place as either cash or cheques and thus, to find a better alternative to this problem they started a company called Fieldlink, later renamed Confinity.
On the other hand, another remarkable entrepreneur founded a company named X.com which was created to serve as an online bank for people and was soon met with success after its launch. This was co-founded by none other than Elon Musk. As X.com was affecting the chances of Confinity’s success, in response, Peter Thiel started the prominent Paypal.
🛒 Entry Of eBay
eBay then burst onto the scene with thousands of customers on its platform making B2B transactions, it had both online sellers and buyers. The only drawback was the transactions used to take 5 to 7 days to take place and without the completion of these transactions, the sale wouldn’t be successful.
As X.com was like an online bank, the buyers were required to have an account on its platform to make a transaction on eBay, following which, Paypal came into action to help facilitate the transaction further. This process enabled transactions to take place within 24 hours with maximum security.
Despite X.com witnessing a surge in its users, it was losing money every day and so was Paypal. To tackle the issue, Peter Thiel extended a merger proposal to Elon Musk, given how they both used to complement each other’s services exceptionally.
Fortunately, Musk agreed and they went ahead with the name Paypal. Soon, almost every other transaction on eBay was being made through PayPal, which led eBay to purchase Paypal for a staggering amount of $1.5 billion. However, after the acquisition, things began to go haywire, as a result of which, many of the core members of the team resigned from the company.
🏆 The Leap To Success
Of the 14 employees at Paypal who decided to quit the company, 10 of them became billionaires!
💵 Reid Hoffman went on to create the very platform you’re reading this on—LinkedIn.
💵 Luke Nosek and Ken Howery with Peter Thiel became part of ‘The Founders Fund’, whose first investment was SpaceX itself.
💵 ‘Yelp’ by Jeremy Stoppelman is worth billions today.
💵 Roelof Botha is the partner of one of the world’s biggest venture capital firms, ‘Sequoia’.
💵 Jawed Karim, Steve Chen and Chad Hurley co-founded the one and only ‘Youtube’
💵 And lastly, the iconic Elon Musk whose revolutionary ideas & social media game have garnered a huge global impact and is currently the richest person on the planet.