Download The PayPal Wars – The PayPal Wars : When Peter Thiel and Max Levchin launched an online payment website in 1999, they hoped their service could improve the lives of millions around the globe. But when their start-up, PayPal, survived the dot.com crash only to find itself besieged by unimaginable challenges, that dream threatened to become a nightmare. PayPal’s history – as told by former insider Eric Jackson – is an engrossing study of human struggle and perseverance against overwhelming odds.
The entrepreneurs that Thiel and Levchin recruited to overhaul world currency markets first had to face some of the greatest trials ever thrown at a Silicon Valley company before they could make internet history. Business guru Tom Peters, author of In Search of Excellence, called the hardcover edition of The PayPal Wars a real page turner that featured what he called the best description of business strategy unfolding in a world changing at warp speed. The new paperback edition will feature updated material and even more insights on the state of internet commerce.
The PayPal Wars – CONTENTS
CHAPTER ONE: THE NEW RECRUIT
CHAPTER TWO: BREAKTHROUGH
CHAPTER THREE: MEGA-MERGER
CHAPTER FOUR: GROWING PAINS
CHAPTER FIVE: THE PRODUCERS
CHAPTER SIX: REVOLUTION — PAYPAL 2.0
CHAPTER SEVEN: THE MONOPOLIST STRIKES
CHAPTER EIGHT: HIGH STAKES
CHAPTER NINE: EARTH VS. PALO ALTO
CHAPTER TEN: TO THE BRINK
CHAPTER ELEVEN: SELL OUT
The PayPal Wars – FOREWORD
I wrote this book because I believed that PayPal’s story needed to be told, both for the business lessons it conveys and its broader statement about the American economy. That’s why I wanted to share this tale and to document the amazing events that befell our startup during that nearly forgotten twilight between the end of the dot-com boom and the onset of the global war on terror. Given this objective, I hope the reader views this book neither as an exercise in self-promotion nor an attempt to settle old scores, but rather as an honest effort to analyze what makes PayPal’s experience significant. This tale is not an official history and is not meant to represent the views of PayPal or eBay. I am still a shareholder of eBay, Inc., and I wish CEO Meg Whitman and her staff all the best, but I do not speak on their behalf. In writing this narrative I have gone to painstaking efforts to produce an accurate account. The PayPal Wars
I have drawn upon my personal recollections and records, discussions with former colleagues, and extensive research using the media sources and SEC filings listed in the notes section of this book. While I’ve endeavored to produce a thorough and precise account, any errors or omissions are entirely my own responsibility. Stylistically, to compensate for my off-beat use of a non-omniscient firstperson narrator I’ve generally adhered to the traditional Chicago style of prose, employing only a few deviations to make the frequent citation of business metrics easier to read. And regarding those metrics, all of PayPal’s financial and customer data referenced in this narrative come from readily available public sources, including PayPal’s IPO prospectus and eBay’s quarterly reports; given this, I opted to spare the reader from the scores of repetitious notes that would have ensued had I documented each figure individually. The PayPal Wars
(A file containing the complete data set can be downloaded at World Ahead Publishing’s Web site, www.worldaheadpublishing.com.) It should be added that while I’ve been careful to supply background information for the reader whenever appropriate, this narrative’s focus is on the events surrounding PayPal and not eBay, PayPal’s erstwhile competitor and current owner. Lest I be accused of dehumanizing eBay for the purpose of constructing a foil to PayPal, the reader is enthusiastically referred to Adam Cohen’s The Perfect Store: Inside eBay, (New York: Little, Brown, and Company, 2002) for an engaging account of eBay’s creation and rise to greatness. No enterprise as complicated as writing a book—which turned out to be only slightly less demanding than working at a dot-com — can be completed by just one person. The PayPal Wars
Everyone connected with World Ahead Publishing has earned my heartfelt gratitude, especially Daniel J. Bramzon for his enthusiasm and sound counsel and Thorvin Anderson for his tireless support and constant feedback. I’m indebted to Dr. Michael New from taking time away from his research at Harvard to supply thoughtful comments on my first draft, and to Jeff Giesea for never failing to dispense always-welcomed advice. My fellow authors Candice Jackson and Alec Rawls provided me with invaluable feedback as I prepared my manuscript. I also appreciate Ron Kenner’s editing assistance and Sharon Goldlinger’s astute guidance. Brandi Laughey, Jonathan New, Nancy Humphreys, and Steven Phenix have been wonderful to work with. And I’ve never met a more thorough or trustworthy adviser than Hank Terry. I would also like to thank my PayPal compatriots, including Peter Thiel, Max Levchin, David Sacks, and Paul Martin, for providing me with their time and feedback; while the conclusions reached in this book are ultimately my own, I nonetheless appreciate their support and enthusiasm. The PayPal Wars
Friends and family played no small role in this endeavor, and my wife, Beatrice, played a role above and beyond all others; without her steadfast devotion and countless hours laboring alongside me, this project would not have been possible. I also treasure the support of my parents, Ron and Teresa, and the advice of my sister, Kristina. Rod and Sherri Martin provided an invaluable dose of vim and vigor during the early stages of this process, and Pietro and Cristina De Luca’s encouragement proved equally uplifting. And I consider Nick Vander Dussen to be a source of inspiration in deciding to write this tale — thanks for bringing all those books to church every week, Nick.
The PayPal Wars – INTRODUCTION
PayPal’s story is one of war. Not conflict with guns or tanks, but a mighty business struggle waged with ingenuity, determination, and plenty of midnight oil. When PayPal’s online payment service debuted toward the end of the dot-com boom, it set in motion a chain of events that would ultimately pit the company’s talented entrepreneurs, revolutionary technology, and bold vision for global currency change against one of the fiercest series of challenges ever endured by a Silicon Valley startup. At the risk of giving away the ending, PayPal managed to survive the onslaught—but just barely. After several years of erratic ups and downs, the venture reached profitability, registered 40 million users, became the first Internet company to stage an IPO following the 9/11 terrorist attacks, and eventually sold out to a much bigger firm. While this is an impressive track record by most standards, it’s far short of what our group initially hoped to accomplish. I may not have fully appreciated it when I accepted the CEO’s invitation to join what was then a tiny startup, but it stands to reason that the creation of most technology ventures is by necessity a tumultuous process. Joseph Schumpeter, a Harvard economist, dubbed the process of entrepreneurs unleashing new innovations into the marketplace as “creative destruction” because it invariably shakes up the existing economic order. 1 Looking back, this term is certainly appropriate to describe what PayPal set out to do, and it also hints at the turbulence that accompanied our efforts. Vigorous competition provided one source of that tumult. A torrent of competitors, including multinational banks and established Internet players, also saw the profit potential of our startup’s payment system and raced to construct their own versions. This slew of entrants into a brand new market touched off a furious race for dominance, one which ultimately led to a bruising one-on-one confrontation between PayPal and an unlikely rival.
About the Author
Eric Jackson directed the marketing operations for PayPal, the world’s leading on-line service, and was instrumental in turning the company into one of the few profitable dot-coms. He graduated from Stanford University with a degree in economics and serves on the Board of Directors of the Stanford Review, a non-profit dedicated to improving education at his alma mater.
Eric M. Jackson is the CEO and co-founder of CapLinked (https://www.caplinked.com/), a virtual data room and secure file-sharing solution. He is also a co-founder of TransitNet (https://transitnet.io/), a decentralized protocol to provide reporting and compliance for securities on the blockchain. Jackson was part of the early team at PayPal, where he served as the company’s first head of U.S. marketing and designed PayPal’s revenue model. A frequent commentator on technology and policy, Jackson has appeared on Bloomberg CNN, Fox News, and MSNBC, and has been the keynote speaker at events hosted by the Cato Institute and Reason Foundation. His book, The PayPal Wars, won the Writers Notes Book Award and was hailed by Tom Peters as “the best description of business strategy unfolding in a world changing at warp speed.” Eric holds a degree from Stanford University, and lives in Los Angeles with his wife and daughter.