The PayPal Mafia & the Founders Who Shaped Silicon Valley | Jimmy Soni

Hidden Forces

Demetri Kofinas

Government, Business

4.8 • 1.6K Ratings

🗓️ 21 February 2022

⏱️ 48 minutes

🔗️ Recording | iTunes | RSS

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Summary

In Episode 233 of Hidden Forces, Demetri Kofinas speaks with award-winning author and recurring Hidden Forces guest Jimmy Soni about his newst book on the PayPal Mafia and the founders who shaped Silicon Valley and transformed the Fintech and online payments industry.

The history of the so-called “PayPal Mafia” does not simply constitute the individual histories of star-studded founders like Peter Thiel, Elon Musk, Reed Hoffman, and others. The history of PayPal is in many ways the history of the future. It's about a company that was in so many ways ahead of its time. PayPal was fintech before anyone even knew what that word meant. It was one of the earliest pioneers of what former team member and later LinkedIn founder Reed Hoffman would dub “blitzscalling,” which is what you do when you need to grow really, really fast. And that’s what PayPal's founders did, and they did it while under constant threat of extinction, from not only criminals trying to defraud their customers or competitors trying to take their business, but also from each other. And that's because the story of the PayPal mafia is also the story of an unlikely, but nonetheless successful merger of two very different but equally competitive cultures, that of Elon Musk’s X.com and Peter Thiel’s Confinity.

The objective of this episode is to give you a historical context for many of the business practices that have since become standard operating procedures across both Silicon Valley and Wallstreet. Things like CAPTCHA, blitzscalling, and micro-deposits, just to name a few. All of these innovations came out of a company under siege for almost the entire course of its pre-IPO existence, and it was in many ways this daily battle for survival that was central to shaping not only PayPal’s culture, but its success: the type of success that every entrepreneur and every founder dreams of.

Most of the conversation about fraud, using financial incentives to effectively buy customers and scale quickly, as well as a discussion about the intersection of fintech and cryptocurrency is featured in the second part of our episode available on our premium subscriber feed. Anyone signed up to our Super Nerd tier can also access the full episode, transcript, and intelligence report by going directly to the episode page at HiddenForces.io and clicking on "premium extras." All subscribers gain access to our premium feed, which can be easily added to your favorite podcast application.

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Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

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Episode Recorded on 02/14/2022

Transcript

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0:00.0	What's up everybody? My name is Demetra Cofinus and you're listening to Hidden Forces,
0:06.0	a podcast that inspires investors, entrepreneurs and everyday citizens to challenge consensus narratives
0:14.0	and to learn how to think critically about the systems of power shaping our world.
0:19.0	My guest in this week's episode is Jimmy Sony.
0:22.0	Many of you will remember Jimmy he came on the podcast back and early to mid 2018
0:27.0	to talk about his last book Mind at Play, which was an excellent biography of Claude Shannon
0:32.0	and he is back on the podcast today to talk about his latest book Founders,
0:37.0	which is about the infamous PayPal Mafia and the lasting imprint that it's left on not only Silicon Valley
0:43.0	but the entire FinTech and online payments industry.
0:46.0	It's an amazing book and this was an equally amazing conversation not only because the history of PayPal
0:52.0	and its star-studded founders like Peter Teal, Elon Musk and others is interesting in and of itself.
0:59.0	But also because the company was in so many ways ahead of its time.
1:03.0	It was FinTech before anyone even knew what that word meant and PayPal was one of the earliest pioneers
1:09.0	of what former team member and later LinkedIn founder Reed Hoffman would dub Blitz Scaling,
1:15.0	which is what you do when you need to grow really, really fast.
1:20.0	And that's what PayPal did and they did it while under constant threat of extinction.
1:25.0	From not only criminals trying to defraud their customers or competitors trying to take their business
1:30.0	but also from each other because the story of the PayPal Mafia is also the story of an unlikely
1:37.0	but nonetheless successful merger of two very different but equally competitive cultures
1:43.0	that of Elon's ex.com and Peter Teal's confinity.
1:47.0	My objective in bringing you this conversation today is to give you a historical context
1:52.0	for many of the business practices that have since become standard operating procedure
	...

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