Learn about PayPal's early history in this summary of The Paypal Wars by Eric Jackson. Download a PDF here. Request PDF on ResearchGate | On Feb 1, , Edward P. Stringham and others published Eric M. Jackson, The PayPal Wars. the PayPal Wars - Ebook download as PDF File .pdf), Text File .txt) or read book online. sdf.
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The company's history is an engrossing story of human struggle and perseverance against overwhelming odds. PayPal went from unknown. new PDF The PayPal Wars: Battles with site, the Media, the Mafia, and the Rest of Planet Earth Full Online, new PDF The PayPal. the paypal wars battles pdf the paypal wars battles with site the media the mafia and the rest of the planet earth. The PayPal Wars is an account of PayPalâ€™s.
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Our interactive player makes it easy to find solutions to The Paypal Wars problems you're working on - just go to the chapter for your book. Hit a particularly tricky question? Bookmark it to easily review again before an exam. The best part? I wondered. The engineers gleefully noted that since they had never actually seen the Chicago School of Law graduate set foot in the ping pong room. Only David Jaques. Clearly the least desirable room in an otherwise open and bright office.
Max was twenty-five. He greeted us in a proper upper-class English accent but barely looked up as Kenny and I lumbered out of his office with the giant table. At thirty-two. The massive plank served as my makeshift workstation until I finished assembling my own particleboard desk over the weekend.
With the help of several engineers. Instead it felt more like a dorm. Could anything but chaos come out of such a setting? I had plenty of time during the afternoon to mull over that question as I sat largely ignored behind my mammoth desk.
Taped to it was a copy of a commentary he had penned for The San Francisco Chronicle extolling the virtues of firms that empower young employees by giving them stock options and letting them do informal things like play ping pong.
Board games. Employees wore shorts and T-shirts to work. Peter was the second oldest person. While a young company with few resources devoted to HR and IT can be forgiven for not planning an orientation session for its new employees.
After all. Glancing around at my new physical surroundings. It will be nearly impossible for corrupt governments to steal wealth from their people through their old means because if they try the people will switch to dollars or Pounds or Yen. Everyone wants to invest in this company!
Already some of them were lined up in both of the perpendicular aisles leading up to the space. I have no doubt that this company has the chance to become the Microsoft of payments. Peter stood in a small corner and chatted with David Jaques as he waited for people to arrive. When a sufficient number of his employees had sauntered in.
Most of the ordinary people there never have an opportunity to open an offshore account or to get their hands on more than a few bills of a stable currency like U.
You can run out of it. Paper money is an ancient technology and an inconvenient means of payment. In the twenty-first century. I gleefully sprung up and shot through the lobby toward the corner of the building where my twenty-six colleagues were beginning to congregate.
Our user growth continues to ramp up nicely. Everyone in the world needs money—to get paid. It wears out. My musings were mercifully cut short when the receptionist—my first visitor in over an hour— stuck her head into the ping pong room and announced that Peter had called a company meeting. PayPal will give citizens worldwide more direct control over their currencies than they ever had before. The need PayPal answers is monumental. In the future. Peter cleared his throat to quiet the din and began the impromptu assembly.
It can get lost or stolen. Many of the bouts of contagion that plagued currency markets in the late nineties were caused by governments trying to manipulate both exchange and interest rates. Many of the engineers carried around copies of Cryptonomicon by Neal Stephenson. This in turn caused local prices to skyrocket which decreased the value of money held in savings.
These sell-offs forced many countries to devalue their currencies by lowering their official exchange rate against the dollar.
I knew Peter was a deep thinker who held a strong sense of vision for the world. The recent currency crises in Asia. In between the dings of the World Domination Index emitting from their computers. Every successful company needs some form of a big-picture vision to guide its decision-making processes.
Both cases certainly applied to Confinity. There is a cynical interpretation to the speech. For my part. While I may have been lured out of the old economy by a longing for a more rewarding workplace and the promise of wealth. As a colleague in programming put it. This belief that Confinity was developing something far more important than the standard ecommerce site that peddled groceries or pet food encountered little internal dissent.
Even though he never used the exact words. My colleagues genuinely thought that PayPal could change the world. Why would he? His talk about changing the very workings of international commerce made an IPO sound small by comparison. Management teams also need to motivate their employees by making them feel that their company is somehow special.
I stood there with a reaction bordering on awestruck. Along with Kenny Howery and Jennifer Chwang. Within a few days our agency inked a deal with Doohan to endorse PayPal.
He needed them to help him pull off a technological revolution. Peter wanted to recruit good people—and fast. If Priceline could venture to the final frontier.
As the use of the Internet spread. Caught up in this push. The direct mail campaign that Kenny had tossed to me during my first day on the job turned out to be more than just busywork.
The TV ads used by so many other dotcoms. If PayPal could find a way to empower these people to move and transfer money with the click of a mouse. With this focus. Soon I found myself surfing direct marketing sites and calling smoozy salesmen to ask about their clickthrough rates and opt-in lists. Whenever this scenario played out. Luke tasked our team with introducing a combination of advertising banner and direct mail campaigns to acquire new customers. The Star Trek celebrity spokesman route had also served another dot-com well.
Early the following week I officially received a title—marketing manager—and a department. As the days went by the details regarding my own ambiguous role with Confinity eventually became clearer. In meetings with his team. Forth-coming venture capital infusion or not. But with an imminent infusion of cash from the upcoming venture round. Luke echoed this strategy. Scotty would not be following Captain Kirk back onto the TV screen—at least not initially.
I may not have appreciated this potential when I hastily fled Andersen to join what at first seemed like a disorganized and chaotic startup. Sand Hill is to venture capital what Wall Street is to the stock market. Peter gestured toward a man standing in the back. In just the week that I had been with the company another six employees had joined.
When he arrived at David Sacks. Reid sported a wide frame and a smile to match. After thanking the employees for their hard work. Starting next week. His curly hair and glasses gave him a friendly. After mingling over cocktails for a half-hour.
For anyone not familiar with the reference. Instead of calling on each person to introduce himself as he had done at the company meeting. Peter realized camaraderie and teamwork were necessary ingredients. While this development surprised many of the people in the room.
I certainly understood why Peter envisioned Reid in this operational role. The afternoon began with drinks and appetizers served by a blazing fireplace in a large lounge. Looking around. I realized I still had not met all of my colleagues. A few minutes passed before Peter picked up a microphone and headed to the front of the room. Reid is going to come on fulltime as president. But before work on the user acquisition campaign shifted into high gear.
Employees caravanned over from the office to the party. This might be hard to guess just by looking at the road itself.
Typically two or three stories with wooden facades and nondescript signs. A broad. And the press release Sacks and I drafted described the event with dot-com flair: I would use our online direct mail campaign to distribute these notices from Scotty. This glaring problem became evident when he arrived at our office and Jennifer tried explaining our service to him. Or so it seemed at the time. That is. The media would surely eat this up—it seemed nothing could go wrong.
The news would hit the media. While he gregariously handed out autographed Scotty magnets to the staff. In the days following the holiday party a steady stream of potential investors trotted in and out of our offices. The entire event came together in about a week.
Doohan knew little about the Internet. James Doohan was spry and full of life—for his age. In the days following the holiday party we scrambled to finalize the Scotty promotion.
We were an up-and-coming dotcom with a celebrity spokesman. Yet even the Japanese businessman whom an engineer accidentally struck in the head with a remote-controlled dirigible went away undeterred.
Confinity employees outnumbered the media four-to-one. The following day our extravagant room at the Saint Francis was sparsely populated. Doohan and Peter ultimately went through. Our PR agency began calling media outlets to drum up interest. Though alert and happy in his new role as corporate pitch-man. My crestfallen colleagues and I gradually trickled out of the mahogany-lined hotel lobby into the chilly San Francisco air. Encouraging words and upscale surroundings did little to hide the truth—our Scotty event flopped.
It was only one minor setback. For a startup full of young people who believed they were on the verge of changing the world. While PayPal had the potential to overhaul the global financial system. The week after our botched press conference.
It was an intuitive way to facilitate payments for club dues or dinner bills with large groups. I slumped at my desk. As I rummaged through the refrigerator looking for half-and-half for my late morning caffeine jolt.
Coffee in hand I shot out of the kitchen. The considerable hours I suddenly found myself spending at work. The presence of a competitor capable of putting together such a slick Web site sent shock waves through our office. A money request feature enabled its users to send an electronic invoice to a third party. There was nothing we could do to prevent dotBank from entering our market. Watching several hundred new customers sign up each day.
I could tell something significant had happened. Outrage quickly turned to urgency as Peter ordered product manager Jamie. The Web site and Palm versions of our person-to-person payment services were both easy to navigate and useful. In some respects dotBank did more than just copy PayPal.
Displaying another familial trait. The e-mail would tell the recipient the requested amount. A second feature for group payments allowed a user to send a money request to several people at once and track who made a payment. Although the two companies had no reason to communicate formally. Its goal was to become the ultimate one-stop financial portal where users could take care of all their cash and investment needs. To the contrary. The programmers tackled the assignment with an intensity and focus that I could not have imagined during my traumatic first day on the job.
Yet here it was. Though the name might suggest otherwise. But even as our programming team raced to build an answer to dotBank. When Confinity relocated six months later. Templeton to get the engineers working on a response. The whiff of chaos that shaped my initial impressions of Confinity remained undetected this time.
Sometime over the previous month. Elon Musk founded X. A challenge had been placed in front of them. This caused them to band together and pour their energy into finding a response to this competitive threat.
With banking functionality that allowed account holders to write checks. No longer. Unlike the minions of Andersen. We kept the user acquisition plan that Luke had laid out earlier in the month but expedited its timeframe. My own small piece of the puzzle. The more people who had phones. Our CEO maintained that creating a successful payments service could only happen if we achieved something called a network effect. After interviewing a score of opt-in subscription services.
Utilitarian and a far cry from any best practice. But as telephones began to proliferate over the following century. Peter Thiel often claimed that growth was the most critical objective for a business like Confinity. Hence a large. But if PayPal can be used to pay millions of people. Robert Metcalfe.
He claimed that the value of a network equals the square of its users. Telephones are a good example of a network.
The first pair of phones used by Alexander Graham Bell and Thomas Watson offered little value beyond demonstrating a new technology. PayPal had a race on its hands. An interactive. Now telephones are so ubiquitous that many of us carry a mobile one at all times. If only a handful of people in the world accept money through PayPal. The marketing team also received the call from Peter to play a role in responding to the launch of our competitors.
I knew management would closely scrutinize the. The more people participating in it. Peter acted as if the future of PayPal hung in the balance during those stressful days in mid-December. This meant that downloaders typically had to mail checks or money orders to their seller in the amount of their winning bid. Our young company lacked any significant market research capabilities. The impromptu meeting disbanded and I left knowing that I had my work cut out for me.
The time the payments spent in the mail. It was a clumsy process for an Internet service. Over the following days I scoured the demographics of every reputable Web-based direct mail service that I could locate. Employees expressed awe as the World Domination Index ratcheted up by more than 1. I was well aware that they were fast becoming a pop culture phenomenon.
Online auction shoppers immediately came to mind. I needed additional groups to target. Acting on this hunch. I had never even bid on an online auction. And from the looks of things. A cursory glance instantly dispelled my misconception that auctions were only for kitschy collectibles like Beanie Babies and Furbies—the site had books.
I booked dates for as many early adopter mailing lists as possible. Unlike shoppers on major e-commerce sites like site. But like all observers of the Internet. This simple. When he finally opened his mouth again. When the data from the campaign came back later in the week the results were encouraging. Yet even though my hunch that auction users had a need for an instant payment service like PayPal seemed right. A lot of focus.
Filled with hundreds of online discussions between community members. Being less tech-savvy than Palm users and college kids. Sacks came across as intense. Yet unlike so many intellectuals who seem to care more about ideas than people. With short. In search of information to help me decide if this gamble was worth taking. I decided to add auction users to the campaign and apologize later if my hunch turned out wrong. Everyone in the company knew of his tendency to descend on a colleague out of nowhere and initiate an in-depth conversation.
Luke possessed a genuine love of technology and seemed equally comfortable talking with engineers as with strategists. Luke took an active interest in those around him. If I made the call to invest a significant amount of funds to pursue this demographic. I was merely trying to carry out my duties to the best of my ability with the hope of generating the account growth that Peter sought. Auction users registered with roughly the same frequency as technophiles.
PayPal seemed to be firing on all cylinders. Like everyone else. Though an avid movie buff. His focus.
I had been told by one member on the executive team that auction traders would not make good PayPal users. As the clock struck and people from around the world celebrated the Millennium.
And I did so having no idea what the consequences of my minor act of rebellion would be. If Peter wanted us to pursue rapid growth. This was a major reason Max sought out his former schoolmate when he started Confinity—he felt Luke could serve as a go-between for the business and technical sides of the company. Reading the posts prompted me to conclude that these users were more sophisticated than the popular perception gave them credit for. Studying it together. With some simple HTML a seller can design unique backgrounds and images for his listing.
Sacks followed a link in the message that took him to an site auction. However much these two young vice presidents clashed in approach and temperament.
Item descriptions can be long and detailed. As well as saving time. As he scoured the Web site. These sellers had seized onto PayPal as a convenient way to get paid for their auctions and they were happy to steer their downloaders toward it. Sacks found that site sellers were incorporating PayPal into their auction descriptions in different ways.
Is PayPal safe? How do I get my money out? How many referral bonuses have you earned? What happens to my money if PayPal shuts down?
A couple of weeks after I had gambled marketing dollars by sending a promotion to auction users. At his request. And if anyone looking at their listing read their commentary about PayPal and decided to sign up.
Given their contrasting styles and mannerisms. Now it was time for us to help it grow. Luke gesticulated with his free hand as he jabbed dozens of blue dots at random intervals around the board. He called over to Luke.
Even if our executive team had initially wanted to avoid this demographic. Most included clickable hyperlinks to our home-page. As it turned out. Shortly after I began my marketing campaign. But if we failed and another service outpaced us. But the problem is all these little groups are scattered across the Net.
Jamie Templeton. Although stopping short of defining how many users constituted critical mass. As he spoke. For marketing. People from all over the Web come here to use this site. If we could increase our number of accounts to reach critical mass before our competitors. Luke went on: This better be worthwhile. Days off had become few and far between since I joined Confinity.
The four year old service boasted 10 million registered users by the end of Sensing that he was about to go off on a tangent. But Luke did have a point. Potential users would not waste time signing up for multiple accounts with different payment services if PayPal were ubiquitous.
That way everyone who looks at their listings can learn about PayPal. The thirteenth most trafficked Web site in late If we could use site to propel our service past dotBank and X.
He announced the service by posting on several newsgroups.
Kenny Howery. It was after successfully selling his own broken laser pointer through the service that Omidyar first realized that AuctionWeb looked like a viable business.
A name change. The marketing team shifted all of its customer acquisition efforts to auction users. Omidyar tried to foster a sense of community with its users. Confinity wasted no time mobilizing. As the service grew. Commerce should exist alongside community. He soon started charging sellers a percent fee on their sales and his fledgling company immediately became profitable.
Omidyar wanted to build a site where the little guy had a chance to download and sell wares on a level playing field. Reflecting their decreased importance. While our Scotty event had bombed in part due to our inability to offer a succinct description of what PayPal should be used for. Unfortunately the euphoria from our customer acquisition success proved short-lived. As a countdown to the event. PayPal reached a significant milestone. Besides giving them a more efficient way to prompt their winning bidders to use our service.
The feature caught on and the impact was immediately evident. After maxing out every reputable direct mailer. AutoLink needed the PayPal customer to submit his site username and password to be activated. Just as we began to roll out our auction strategy and quantify our position in our new market.
Named AutoLink because it automatically linked to existing site auctions and added a PayPal logo to the bottom. Our competitor soon launched its own version of an HTML logo for auction sellers.
During the eight weeks since the day Luke introduced me to the World Domination Index while interviewing me for a job I already had.
In late January we registered our Each day she used a red marker to fill in another portion of the thermometer and the company watched as we drew closer to the Jennifer Chwang placed ads in a variety of collectible magazines.
In an online world where all it takes is several. Engineering finished the auction logo insertion tool in a matter of days. Jamie and the engineers set out working on an auction logo insertion tool.
As sellers used their listings to train downloaders to look for PayPal. When PayPal finally reached the mark. For now. If a transaction somehow went wrong or involved fraud on the part of one of the parties. An engineer who disapproved of well-connected players obtaining advantages unavailable to the little guy. site shut down the Billpoint Web site soon after completing the acquisition to work on development.
And yet there was a reason to suspect that this level playing field might not always exist for PayPal. By contrast dotBank. Omidyar thought that site should be a level playing field that allowed all manner of downloaders and sellers to compete.
More than eight months had since passed without word as to when or if Billpoint-powered credit card payments would become. As Confinity and X.
Entering into auction payments of course meant this was also true for Confinity. But site. In May site announced the acquisition of a credit card processing firm called Billpoint. Facilitating credit card payments. And we were determined to stay a step ahead.
Instead of downloading all their items. I bet that really pads their profit margins! While very different people. The toolbar flashes ads. I had hit it off with Luke over the past two months and had grown to respect his intellect. Sacks and the rest of the management team stressed the need to focus on live opponents like X. I asked. His creativity and ability to generate far-flung ideas exceeded my own.
How do we download something from every seller on site? People have these entire Web farms with employees sitting at computers all day. Since recovering from the initial shock of coming to such an unstructured environment. So what we need to do is go out and start downloading stuff on site and insist on using PayPal to pay for it.
But while everyone took advantage of this intellectual freedom at one time or another. In fact, we deserved it! CNET, The Red Herring, and other media outlets had every right to sink their teeth into a company with such a dangerous burn rate While this vision never came to pass, the encompassing nature of his vision seized the imagination of those who toiled to make PayPal succeed.
Theil also had the financial acumen to realize that unless he closed his venture round quickly in the spring of , the continuing slide of NASDAQ would scare away the investors he had so carefully brought to the table. Had he waited even a few more days, his investors would have fled to safety, and PayPal would have run out of cash. Some of the most delicious passages of Jackson's account are those which describe the culture of PayPal's ultimate downloader, site: "site employees seemed trained to make phone calls to everyone who might have even the remotest interest in the matter and invite them to the yet-to-be-scheduled meeting.
After at least two dozen invitations had been extended, a meeting time and location would be scheduled about a week in advance.