What made the PayPal Mafia so successful?
https://en.wikipedia.org/wiki/PayPal_Mafia
Early PayPal employees / founders went on to create companies including Tesla, YouTube, LinkedIn, Palantir, SpaceX, Slide, Yelp, etc.
How is it possible that so many great companies came from PayPal alumni? Did they do anything in particular?
Smart people + next level network for funding = high probability for success
Curious as well
Some of the big winners of the early tech boom went on to invest in other tech companies. Not sure why that is so shocking. Well-heeled investors carrying money-losing companies is sort of the point of having a wealthy founder. The fact that the last 15 years have basically been an era of free money and correlated stupidity in investing in tech companies has only helped that. Besides, the concepts behind PayPay (digital wallet and online payments) are basically the foundation for much of how tech itself is profitable (advertisement being the other obviously). So it makes sense that people steeped in that specific aspect of tech, who also had a ton more money than others and were getting rich on the eve of one of the hugest bull runs for any asset class in human history, would be positioned to do well.
Besides, is that list all that impressive? Tesla doesn't even belong on there, it wasn't founded by someone from PayPay, despite Elon Musk's claims to the contrary - he was an investor and booster, not a founder. SpaceX loses money every year. I've never heard of Slide, what does it do? And are Yelp and LinkedIn super profitable or anything? They're household names, but that doesn't mean they're great businesses...
Calling a group of businesses worth a trillion dollars "not that impressive." Typical Ozymandia 🤡.
Don't forget SpaceX is literally revolutionizing space exploration. The more Ozymandia posts the more they seem the same as the typical Redditor than can't look past their own personal biases about people to see things for how they actually are.
Yes, and Ozymandia LLC just sold 1 one-trillionth of a share for $1 dollar, and is thus worth a trillion dollars as well, and I created it this morning! Clearly I'm a superior businessman to all these PayPal guys!
I'm always amazed at the willingness, even eagerness, of financial markets to be defrauded. I guess that's the broken system of Wall Street incentives in action. I don't give a flying fuck what SpaceX is "worth". I care if it makes money. And it doesn't. It loses money. Lots of it. How many times have we seen this story play out, where some charming quasi-con artist talks the Street into some pipe dream and in return gets a company worth "billions." Why is SpaceX or Tesla any different from WeWork? Why is Tesla worth more than every other carmaker combined? You can't seriously think these are real valuations.
Yelp made something 40mm in 2022. Good for them, that is impressive, I'd like to own a company with that kind of profitability. But that hardly puts them in the rarified air of some brilliant money printing machine.
If you want to equate an impressive business with "people think they might make money in the future" then that's your prerogative. I think most of the valuations handed out over the last decade are borderline fraudulent, and as time goes on the markets seem to agree with me, once they realize that "disruptors" are really just burning investor's cash to gain market share, and have no path to profitability.
EDIT: I I also should point out in all fairness that I'm not grouping all these companies together, but the original ask was why PayPal's employees and founders have gone on to such success as a group, and I just think that if you strip out some of the companies in here which don't belong in the "successful & founded by PayPal folks" group, then suddenly the "PayPal mafia" doesn't seem like such an outlier.
Musk may not have been at Tesla since inception, but he was close enough.
SpaceX is thriving
LinkedIn is an amazing business.
Yelp is so-so, but YouTube is incredible.
Roelof Botha is now managing partner at Sequioa, the greatest VC fund in the game.
Palantir the next Oracle.
You're an idiot.
No, Musk was a Series A investor. The fact that he sued to get himself called "founder" says more about his ego than his actual involvement in founding the company.
It is? Last I saw, it posted an absolutely miniscule profit in Q1 this year. This goes to my initial point - what defines "thriving"? At what point do we all sit down and admit that growth without a path to profitability is worthless? WeWork was "thriving" just a few years ago, too. If you want to say SpaceX or any other firm is doing well, you have to define that, and then defend it. I think profitability, and more specifically return on capital, is a good measure of how well a company is doing. What's yours?
OK, again please define and defend.
So that's 1.
So... didn't create a business, so not germane to the conversation.
That's 2.
So far you've got 2 highly successful companies that PayPal alums have started, and maybe 2 more. Impressive... but hardly seems like the craziest coincidence. People with equity in PayPal made lots of money, it stands to reason some of them would be successful.
A lot was due to being at the right time -- at that point, the internet was still young, and it was a time of hyper-growth -- very unique to that specific moment in history.
I remember that era.
To put in perspective, Amazon was initially (in appearance) the equivalent a bad free website today.
It was interesting, simply because it had not been done before.
When my father's firm was pitched to handle certain early aspects, my father asked me what I thought of "...a bookstore, on that internet..." and I remember thinking, "...wow, I could order books directly? Instead of ordering at a bookstore? Wow."
(That's the reason my two Amazon accounts are from 1996, and 1999, after a few changes to the site. I also owned a small amount of early stock).
At the time, there was nothing like it -- which was the excitement and appeal to Amazon -- and largely the same for PayPal, etc.
I use Amazon as an example, to compare -- because PayPal was a similar startup around that era.
It was new, during a time when everything (including the internet) was still new.
• Amazon was a very simple website, selling books, started by "...a geeky guy with a funny laugh."
• eBay was coded by Pierre, over a three-day holiday weekend.
• PayPal was "a way to pay for things, on that internet..." and people were skeptical, but there wasn't another method to pay for eBay auctions, other than sending a money order via USPS Mail (which many people did back then).
Remember, back then, if people had internet, it was dial-up at 14.4kb, 28.8kb, or 56.6kb, until towards the end of the 1990s.
We think of those companies (PayPal, etc) as they are today; but it's important to consider the era, how they were (very scrappy, and simple ventures), and the fact that it was entirely new at the time -- consider that Google, and the internet barely existed back then.
Many of those big names you know nowadays (1990s - 2000s) were like scrappy startups at the time.
What made them unique was that there was nothing like them -- and the internet was still very young.
The early-era internet, and ideas never done before, were make them unique; and the growth of the internet allowed them to grow and evolve as well.
Just some perspective.
PayPal was huge when it first came out, a lot of noobs/young people probably don't realise how big
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