The PayPal story is a war. Although there are no guns and tanks, it is a powerful struggle carried out by an enterprise with originality, determination, and the drive to light up the oil. At the end of the Internet bubble, PayPal launched an online payment service. This move caused a series of chain reactions, pushing outstanding entrepreneurs, revolutionary technology, and the grand vision of changing the global currency system into a series of cruel challenge. This is the most severe challenge a Silicon Valley startup has ever faced.
Almost lost! PayPal managed to survive in the end, but only barely survived. After several years of repetition and turbulence, the company achieved profitability, with 40 million registered users, and became the first Internet company to conduct an IPO after the “9.11” terrorist attack. In the end, it was sold to a large company. In many ways, these are impressive performances, but this is far from the original intention of our group.
When I accepted the invitation of the CEO of PayPal to join this small startup company, I did not fully understand its vision. It stands to reason that the establishment of most technology companies will inevitably go through a turbulent process. Harvard University economist Joseph Schumpeter called the entrepreneur’s act of launching innovations to market as “creative destruction” because it inevitably shakes the existing economic order. 1 Looking back at the history of PayPal, this term is very suitable for describing what PayPal has to do. It also indicates that turbulence will accompany our efforts.
Fierce competition is one of the reasons for the turbulence. A large wave of competitors, including multinational banks and Internet giants at the time, saw the profit potential of our start-up payment system. They also participated in the competition and built their own payment system. The entry of a large number of participants into a new market will inevitably trigger a competition for dominance, which ultimately leads to a head-on confrontation between PayPal and an incredible opponent.
Another source of turbulence is intense internal discussions, including multiple debates on the company’s future strategic direction. If entrepreneurs try to do something unprecedented, they often lack precedent reference, so they can only cross the river by feeling the stones. Fortunately, the founder of PayPal has injected a culture into the company, so that everyone adapts to this reality, and even strives to turn it into a fortune.
In hindsight, the competition and uncertainty of launching a service with great potential like PayPal can be said to be expected. There will be others who want to defeat you and win the final honor, and the best course of action will not be clearly laid out in front of you. However, what people did not expect was that what ultimately put PayPal in danger were factors that had nothing to do with the market. They suddenly appeared just before PayPal stood on the threshold of success.
Scheming Mafia members, capricious regulators, opportunistic lawyers, savvy cyber thieves, volatility in capital markets, and hostile media — the challenges posed by these external factors proved unparalleled in hindsight . The modern business environment is more hostile to entrepreneurs than fierce competitors. Although Schumpeter coined the term “creative destruction” to imply a certain degree of instability, he did not intend to show that entrepreneurs must worry more about non-competitive threats instead of worrying about them. Products to market. However, PayPal’s experience shows that today’s innovators must often consider non-competitive threats.
These daunting threats, as well as the hard work, sweat and tears we have put in to overcome them, make me feel more necessary to tell the story of PayPal for everyone. Although this book describes a group of talented people who have fought alongside me, it is mainly based on warning stories told from first-hand information obtained from high-tech trenches.
Hope you will like it.
