Inside PayPal (2010)
paulgraham.com
paulgraham.com
https://web.archive.org/web/19991012084438/http://paypal.com...
But I think it's probably the "synergy" with eBay that was the biggest surprise. I recall having a neighbor at that time who sold old movie posters. Rather than driving around the country to comic book conventions, he was able to do more in one month in online auctions than the past decades he had been collecting. That was the great awakening. PayPal went from "college kids requesting cash from parents" to trading rare sports memorabilia with instant clearing by March 2000.
>>> If you needed to integrate with an outside vendor, you picked up the phone yourself and called; you didn’t wait for a BD person to become available. You did (the first version of) mockups and wireframes yourself; you didn’t wait for a designer to become available. You wrote (the first draft of) site copy yourself; you didn’t wait for a content writer.
"You must unlearn what you have learned" ;)
I personally try not to collect things, but for those who do, I wonder if this ruined the hobby because of instant gratification.
For people who doesn't collect, may look like that, because they may think that going into eBay could ruin the fun, because everything is easy to get now. It isn't. You need to learn tricks and also, how to win over other collectors who may see the same item that you did.
Now in the age of bitcoin this could have a very different answer. In any case, the FAQ is very interesting.
With higher responsibility also comes the risk of exposing the company to situations that a more practised individual would know to avoid. It'd be interesting to hear about how these companies mitigate risk from their armies of ambitious underlings.
Keep your focus on the first thing which will kill you.
Agreed 100%.
All of my friends who were bragging they were going to retire at 25 millionaires and then three months later were flat broke. They were so disenchanted with the startup scene, they all went to work for big corporations.
As I remember, nobody I knew wanted to work at a startup, let alone start a company in that environment. There was no money - VC or otherwise. You were left to bootstrap it yourself. If it had anything to do with the internet, you were toxic so even getting clients to support you was insanely hard.
The fact they came out of that crazy time and were able to prosper against all of those odds is really impressive.
Every branch of the military will happily tick pretty much all of those "do it now, don't let anything stop you" boxes.
But every branch of the military has in place very deep redlines (sometimes expressed as rules of engagement, sometimes as "honour") - because they know the horrors of crossing those lines, with a "get it done at any cost attitude".)
Most humans have that ability to get things done, they just tend to work for organisations that don't reward it. And so the onus is on management (as ever). Build a culture that rewards innovation - but has some set of values that accepts some lines cannot be crossed.
Yes there is danger in retreating from the edge of chaos - but then we all live in Ming China. That is a better problem than going too far over the eve of chaos.
it's hard, for companies as well as societies.
> Yes there is danger in retreating from the edge of chaos - but then we all live in Ming China. That is a better problem than going too far over the eve of chaos.
Qing China is the one that famously closed itself off from the world.
Like the T-Shirt says, when you are this good, why try harder.
The most advanced civilisation on the planet simply sat back in 1400, and no-one could do anything about it because the place was one fairly unified political system.
(yes, wars rebellions etc, but one China - maybe broken at times but always seeing itself as one, not competing to beat the other part but competing to unify again.
Probably it's fair to say that China always fought itself, and Europe fought each other.
(There is also something about how China unified and grew in waves related to the latest horse invaders. A sort of unified and strong when the invaders attacked, weaker when the threat retreated. Once gunpowder was invented that process was effectively over - you could mow down horse archers happily all day. So again, China had no external threats so it could turn inwards. And take all of this as a massive over-simplification but it's interesting to realise the end of the horse invaders coincided with gunpowder and the turning inwards)
While for Qing we have a ton of proof about this policy.
I'd definitely use Qing as the archetypal example of isolationism. Especially since Qing was the absolute peak of China in terms of territorial expansion, global influence, share of the world economy. Qing China in 1650 - 1700 truly had no rival.
The general point about living on the edge of chaos and it falling in either side still stands - although if you do fall, falling like the Ming / Qing is waaaay better :-)
Forced to use PayPal since 2004 as a small business owner, it was impossible to reach their customer support. They've also left me to fight with insurers when it came to fraudulent transactions.
Glad to hear they built a talented team, but as a customer...
I mostly use PayPal when there's some kind of promotion that gives me an incentive, such as extra credit card rewards, or a cash back offer. I think a lot of people find it convenient to use PayPal for ecommerce because they don't have to get their credit card out, just enter their PayPal password.
One thing PayPal does well is have all the features you 100% depend on, already running well. The UX is kind of terrible, but it's at least all there. As a PayPal purchaser, I can enforce a specific shipping address, or a specific source payment method, change it constantly at will, and the seller mostly can't mess it up (PayPal enforces it on my behalf). I can sign up for a subscription, cancel it, all from PayPal's side, and the seller literally can't control that experience or block me from doing that (PayPal enforces that on my behalf too). I can even dispute a transaction with one click (although I've never needed to, so I don't know what happens after that).
I also have a Visa, MasterCard, Amex, Discover, and Simple, and Venmo. Some of these other credit card merchants or cash services have parts of these pieces half implemented. (There are 'fake/disposable' cc numbers and such that try to replicate the 'cancel anytime' thing. You can definitely call a credit card company to block future transactions from a specific company). But to my knowledge, no one else actually has the whole minimum-featureset-for-purchasing figured out and accessible with just clicks online. PayPal does. And they've had it, consistently, for almost a decade.
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So, as a person who writes eCommerce stuff all the time, I get why folks in the industry is sick of it. (It's duplicate steps, we always have to do "real credit cards" merchant, and also a separate "PayPal" integration)
But as a purchaser, I always prefer the PayPal option, rather than handing over a Credit Card to their Stripe/Square/whatever merchant service -- especially for anything with recurring billing. I get why other folks prefer it as well.
I do look around once in a while, for what the alternatives are, but so far PayPal is the only service that lets me run my business from a passive web page. I don't even have my own URL. Every other service seems to have a tutorial showing me what code to install on my server, but frankly hosting and maintaining a server (at home or in the cloud) seems like it would add a dimension of complexity to my business that I don't want to deal with. I certainly don't want to be responsible for handling and storing my customers' credit card numbers and similar data.
I also think that the customer protections are beneficial, since they give people the confidence to buy from a relatively unknown seller.
On top of that, they have a deal with the USPS that lets me generate a first class shipping label, which isn't even available at the USPS website. What I save on postage more than covers the PayPal fee.
I also sell on eBay: they direct deposit into my bank. I have no idea what happens with international orders.
And if the data says I'm wrong, I trust it. I have no belief that I've already found the best solution.
Somehow, it requires a certain amount of naivety to _actually_ try to solve a hard problem instead of pretending to do something and then write a 100 page bullshit report (or mostly copy an old report) on it.
The experienced oldsters make up the sluice.
The youngsters represent the water.
Nobody worries much about the spillage if there's gold in the pan.
So I'm not quite convinced that PayPal was all that innovative, but they did fill a void here.
a. Until recently, they took about a day to arrive, or over a weekend. Money sent on Friday would be on the target account by Monday. You can build an economy around that, but every online service that gives you instant processing will be in advantage. There is a lot of scenarios where quick processing of a payment is desirable.
b. Transactions abroad were ridiculously expensive and to some degree still are. I remember sending a payment to Lithuania from Czechia by bank transfer. The original quoted sum was about 30 dollars (in then-Lithuanian currency, Litas), and the fees added up to another 20 dollars. This problem was probably less common in Germany, a big market where you will find domestic providers of about anything, but people in smaller countries were getting ripped off at every foreign transaction. SEPA payment system is helping with that, but the fees have only gone down relatively recently, too. At least where I live.
Second to this I’d put good hiring. I have seen companies that try to follow these models without rigorous recruiting or hiring processes. It results in a huge mess because management has these massive expectations but the people they hire just aren’t good enough. As a result, everyone gets demoralized
Tangential, how do you decide whether to collect a new metric? Use data-driven thinking? But how, you don't have data until you invest in building that collector.
2. Eat other food as well OR do not limit ourselves to our own dogfood : This can help greatly in shaping our products better and in providing seamless experience migrating customers from competitors to our product.