HN Books @HNBooksMonth

> Fortunately, Max Levchin had an answer: ”Oh, that’s easy. We can sync payments for email.” Scott Banister (who was the other outside board member) and I looked at each other and said, “That’s a great idea.” Email payments turned out to be the product that made PayPal a success, and about a year later, the company quietly dropped its PalmPilot application.

> Max, Peter Thiel, and the PayPal team didn’t need to run an experiment to realize that the PalmPilot approach wasn’t going to work, and to switch to a different thesis (email payments) in which they had much greater confidence.

Maybe they didn't need to run the experiment, but they certainly did: https://www.paypalobjects.com/html/pr-121799.html

Of course, I have no idea what actually happened here (other than it certainly seems like PayPal spent a lot of time building the palmpilot app, going so far as to doing a classic corny '90s splashy launch with a nerd-celebrity built entirely around the beaming concept.

The tale told in the paypal wars (https://www.amazon.com/PayPal-Wars-Battles-Media-Planet/dp/0...) is essentially that

1) The initial vision of Confinity/PayPal was an alternative currency enabling cross-border/cross-currency low-fee payments (similar to a lot of bitcoin/blockchain rhetoric)

2) The go-to-market strategy was beaming on palm pilots

3) Musk & Co had raised a bunch of money to build a vague "consumer finance" portal called "x.com" (Musks's strange fixation on the letter 'x' goes way back)

4) (not remembering this part for sure as I read the book a long time ago) PayPal/Confinity was running out of money because the beaming product was a flop and no one cared about their alternative currency payments usecase. Musk's company was also a slow-motion trainwreck because there was essentially no product vision and no actual customer pain being solved, but they had more money in the bank so Confinity agreed to sell to them to extend the runway.

5) The email payments thing was built as almost an afterthought to allow graph completion to enable the palmpilot beaming usecase to actually work

6) A random PM noticed that a surprising percentage of their traffic was coming from eBay users.

7) eBay, being the worst-managed incredible first-mover opportunity of the 90s dotcom boom was incapable of building a functioning payments product, despite the massive first party advantages and huge incentives to round out their core offering

8) PayPal was very popular but was burning cash at an insane rate that scaled at least linearly (possibly supralinearly) in engagement. They basically were able to survive due to a fortunate massive fund raising just before the 90s window closed (very similar to stamps.com). They might have been able to get the business to work but instead eBay acquired them so we never found out.

Of course, I read this in a book, and I read the book well over a decade ago, so I'm sure I'm not remembering things right, and I have no idea what particular axe to grind the author had, etc.

But there is evidence online that they at least believed in the beaming thing long enough to build the product and hire Scotty from star trek for a stunt launch. And this might be a minor detail, but if it's true, then Hoffman's point doesn't hold up, and it undermines the whole thesis of the post.

In general, I don't think there's much reason to believe that people who did really hard things are particularly able to explain why they were able to do them. It's great that they were able to do them, and maybe that even predicts that they'll be able to do more of them in the future. I think in Silicon Valley, if you asked a bunch of these guys to flip a coin ten times the guy who got heads ten times in a row would immediately start a Medium account to explain how his unique perspective and grit and determination enabled him to do it.

I mention this because I completely don't understand why these puffy VC content-marketing articles are on the front page of hackernews every day. There is very little evidence that there's any more value in them then say calling the psychic hotline and asking them for startup advice, and they're essentially just ads for VCs and SV thinkfluencers.

⬐ seebetter

I'm pretty sure he just had access to X.com, plus it's a cool domain. Is it really a strange fascination?

I suppose it is if you follow the Dark Journalist's X series on Youtube. Some great mythical modern tales of fantastical (but untrue) possibilities.

⬐ somedudetbh

> I'm pretty sure he just had access to X.com, plus it's a cool domain. Is it really a strange fascination?

I just think it's funny that he went out and bought the x.com domain for a consumer finance startup in the 90s, and then ended up running a company called SpaceX, and then ran an electric car company whose top-of-the-range model is called the "Model X", then he had a baby, and named the baby "X Æ A-12 ", or "X" for short. The dude is crazy for X!

⬐ WalterBright

> x

I knew a fellow once who had no middle name. Since the logins at the time were one's 3 initials, he just used 'x'. Eventually, he legally changed his name so his middle name was "x".

From what I remember from The Paypal Wars (highly recommended):

There was a culture clash when X got bought by Paypal. Elon was in charge of X and became the CEO of the combined company (as Peter Thiel took a leave of abscence) and wanted to switch from Unix to Windows. Max Levchin, the main tech guy at Paypal hated that idea. Elon initially got his way, and Max got marginalized. He then started looking into fraud cases and discovered that fraud, although low as a percentage of revenue, was growing rapidly. Max then persuaded people that the #1 priority should be to fix the fraud issue before it would kill them, and that they didn't have the time to worry about the technology stack. Elon Musk got kicked out, Peter Thiel came back to Paypal as CEO and Max managed to squash the fraud problem. Their competitors either failed to get traction or got crushed by fraud. With Paypal as the last one standing they won and got bought by Ebay.

http://www.amazon.com/The-PayPal-Wars-Battles-Planet/dp/0974...

I started reading "Paypal Wars" (http://www.amazon.com/PayPal-Wars-Battles-Media-Planet/dp/09...) which is quite a fascinating read with lots of insight.

⬐ jirinovotny

Thanks Akash. I've added it to the list.

Unfortunately, the PayPal of today is a far cry from Peter Thiel's original vision. It was supposed to be an extra-governmental currency more akin to something like bitcoin, until Ebay got ahold of it. http://www.amazon.com/exec/obidos/ASIN/0974670103

Also see: The PayPal Wars.

http://www.amazon.com/PayPal-Wars-Battles-Media-Planet/dp/09...

PayPal Wars is also really informative (although not well written) http://www.amazon.com/PayPal-Wars-Battles-Media-Planet/dp/09...

Or, PayPal Wars: http://www.amazon.com/PayPal-Wars-Battles-Media-Planet/dp/09...

It also mentioned the legal hoops they had to jump through...and was a very interesting read.