The origin story of PayPal and the early days of the Silicon Valley

“The Founders: The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley” by Jimmy Soni

This is a story about a bunch of misfit geniuses that came together in the early days of the internet between 1998-2002 and founded what would later becomes PayPal.

The book took 5 years in the making, which includes interviews with hundreds of PayPal’s pre-IPO former employees within those 4 years, all the original 10 co-founders and most of their board members and early investors, as well as the agencies and advisors that they consulted with, not to mention the many books, podcasts, articles, and academic papers that the author, Jimmy Soni, found on PayPal.

And it immediately shows in the depth and detailed nature of the story. It demonstrates that PayPal is not only the likes of Peter Thiel, Elon Musk, Max Levchin, and Reid Hoffman, but it’s also the other backbone of the company such as David Jaques, David Johnson, Sandeep Lal, David Sacks, and Jamie Templeton.

There’s no one able-all maverick but it’s the engineers, UX designers, database administrators, network architects, product specialists, fraud fighters, and support personnels. And perhaps quite pivotal in the story, it’s also shaped by names such as Roelof Botcha, the financial wizard that puts every cash flow into perspective and discovered the grave financial error that almost put the company into bankruptcy.

Indeed, PayPal is the collective effort of many individuals – many of whom are immigrants – that join forces together like the soldiers in the Band of Brothers and create something remarkable amidst the utter chaos of the world of start ups in 1990s Silicon Valley, during which the bubble was happening.

As Soni remarks “PayPal’s story is a four-year odyssey of near-failure followed by near-failure.” And in the book you can feel the craziness of that period of time, through the everyday headaches such as the engineering and systems dilemma, and the growing sophistication of fraudsters and international hackers along with the growth of the company.

It was visible during the time when the company’s burn rate left it with only months of funding left. It was also notable during the naming debate between PayPal and, in the post-merger environment, and throughout the many nasty infightings and even board member coup.

But as the book illustrates, those 4 years were also watershed experience that influenced these people’s approach to leadership, strategy, and technology. It was in the company culture, the puzzle-solving spirit, the culture of sleeping on the floor, it’s about implementing a revolutionary idea into a very uncertain environment. It is also in the office pranks, executives wearing oversized sumo suit and wrestled in an oversized ring, which made the story colourful.

The conclusion of the book is one of the best I’ve read, which will make the title of the book (with the focus on the founders) more make sense. While the entirety of the book is about the story of PayPal, the conclusion knits all the stories together into a perspective from what these individual geniuses brought into the collective force of the company.

And how fitting it is as a Silicon Valley folklore that after a relatively brief few years together they all went to their separate ways to make their own marks in the world, with the likes of YouTube, Yelp, LinkedIn, Kiva, Affirm, Palantir Technologies, Slide, SpaceX and Tesla, as well as the numerous companies that they invested in.

Make sure to read on until the epilogue, where Soni tells the story about Chris and Stephen and the PayPal Mafia that became an unlikely inspiration for prison inmates.