Review: The Founders

By Trevor McKendrick 👋 - Have you read my free newsletter?

This is going to be short. I deeply respect anyone who makes anything new, and I appreciate Jimmy Soni’s massive efforts in bringing this book to light.

I’ll start with this: I appreciate that Jimmy had a generally positive view of tech when writing this story. That alone is a differentiated view today. It would be very easy to use early PayPal stories to say WTF about all the chaos that happens in startups. Compare this to, say, Anna Wiener’s Uncanny Valley and you quickly become grateful for Jimmy’s take on this particularly famous tech company.

Some things I learned or found interesting/funny in the book:

  • Peter Thiel recommended not firing people. He said roughly “firing people is like war, and war is bad, so we should avoid firing people.” This feels like a very Peter Thiel answer but also caught me by surprise. One of the most repeated pieces of startup advice is hire slow fire fast, and usually the reason founders don’t fire people is because of emotional attachment. Of course Peter had a totally different reason for not hiring.
  • Elon looking back on the coup that Peter Thiel, Max Levchin, Reid Hoffman, and other pulled to remove him as CEO while he was on his honeymoon: “It was a well-executed coup. It’s slightly complimentary that they would only do it when I’m not there.”
  • Elon was almost universally regarded as being quite gracious when he was pushed out. He could have fought much more and didn’t.
  • PayPal was the first company to use CAPTCHAs on a commercial project with any real scale.
  • Peter Thiel’s last day as CEO (the 2nd time) was the day the eBay acquisition closed. 
  • The guy who made the x.com & PayPal merger happen was only with the companies for a total of 6 months. 

When you think about what PayPal actually made that was valuable it ends up being pretty narrow: they made the payments platform for a new type of service (online auctions) that the owners were unable to make themselves. 

This would be like today if you people bought products on Amazon not by paying via Amazon, but by clicking through to an entirely different company.

PayPal’s biggest innovation was likely its fraud fighting. They existed pre-KYC (!) so anyone could signup for an account from almost anywhere. A lot of the fraud they dealt with is, I believe, made much more difficult or even impossible because of regulatory restraints.

Final Thoughts

The book’s audience is clearly mainstream and not the tech world. The author often explains basic tech world things like venture capital, boards of directors, etc. There didn’t feel like a ton of information in here that was super new

That said, it does tell the full story of PayPal in a single place, with interviews and input from everyone who was actually there. If you know nothing about the history of PayPal and want a solid look at an early dot com success, this is a great place to start.

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