The Founders — The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley

The book releases tomorrow. It is a thrilling story of the formative years of the $100B company with one of the most impactful groups of people ever assembled in technology. Against a dramatic backdrop of multiple CEO coups and wild product development bingers, Soni captures some of the valuable lessons learned, from company naming, to team size, to competing with FAANG for engineering talent, to the pinnacle of viral marketing (I’ll share a couple excerpts in the comments below).

I like his attitude and admiration of the great accomplishments in others. The book is also refreshingly accurate. The author actually did fact checking (unlike the cynical clickbait business books from mainstream media journalists that you won’t see me reviewing). He also interviewed Musk, Thiel, Levchin, Nosek, Hoffman, Sacks… I know all of these founder protagonists personally, and I was competing for their first round of investment (but lost out by underbidding Nokia by 4x, one of my biggest misses). From my perspective, Soni captures the personalities and the frenetic zeitgeist of the times with aplomb.

Confinity became PayPal. Cosmogia became Planet. Much better names. From four syllables to two, with the pleasing pause of plosives and, from Master-McNeil branding exercise: “If people don’t know how to say something, or if they are fearful of saying it incorrectly, they will do anything to avoid saying it. Embarrassment is a very strong emotion.”

Like Skype, PayPal was founded with a singular focus on the mobile experience. Initially, Skype envisioned wifi-only phones and PayPal envisioned beaming currency with the PalmPilot infrared port. Usage on PCs was not part of the initial pitch. In both cases, the engineers built a test chassis using PCs for faster iteration and development. For PayPal, “the email money demo dramatically simplified the sequence — Levchin could now test transfers with a few mouse clicks. Within weeks, Levchin had become an avid user of the afterthought product, even as he remained committed to the vision of the original. ‘That should have been a clue,’ he said.”

Confinity’s first head of product, David Sacks, said he’d only join the company “if the email product was given primacy. ’The PalmPilot product was a dumb idea,’ Sacks remembered. In the email money transfer battle, Confinity enjoyed a lead thanks, in part, to the insistence of a single team member: David Sacks.”

Levchin on teams: “The number of people in a room correlated positively to friction in basic communication.” “Avoid groupthink. A good rule of thumb is that the diversity of opinion is essential anytime you don’t know anything about something important. But if there is a strong sense of what’s right already, don’t argue about it.”

Elon’s first principles perspective: he would ask in interviews “Why does it cost so money to move bits and bytes within the financial system?” (sounds similar to his later analysis of rocket raw materials costs for SpaceX)

Many near-death experiences and moments of doubt: “Hoffman remembered Thiel’s pitch [to join Confinity]: ‘Look, we’re running like a hot mess internally. We have no business model. We need to package this thing up for a sale.’ Thiel assured him a brief Confinity tour of duty — and an exit that would burnish his technology resume.”

Nosek on the Confinity/X merger of equals: “A merger isn’t two companies joining together. It’s actually closer to hiring fifty people, sight unseen.”

Running on fumes, Thiel pushed hard to get a big funding round done in 2000, just days before the great dotcom crash: “if the team had not closed that one hundred million, there would be no SpaceX, no LinkedIn and no Tesla.”