They call them the PayPal mafia, but in reality, the alumni of the online payment provider that would eventually go on to become PayPal are less mobster and more mogul. Their continued connections after leaving the company have helped them to go onto build hugely successful companies over the years.
At the center of the highly ambitious group of PayPal alumni who have gone on to forge further empires stands Peter Thiel, a leader of astounding vision. This is a man whose initial $500,000 investment in Facebook is now estimated to stand at at least $750 million. The rest of the team includes the likes of Elon Musk, Reid Hoffman, Jeremy Stoppelman, Max Levchin, Roelof Botha, and David Sacks.
An article in the business and policy section of the NY Times explains how a small team of driven men who started out in tech trenches have come to be the backers of some of the most valuable technology companies in Silicon Valley.
The Simple Truth Behind the Paypal Mafia Unicorn Stable
In the tech world, the term ‘unicorn’ refers to a rare breed of start-up company that survives long enough to exceed a valuation of $1 billion. By 2017, PayPal alumni had managed to create 7 such companies, including Tesla, Inc., LinkedIn, Palantir, SpaceX, Yelp Inc., YouTube, and Yammer.
They were also instrumental in providing the initial funding for immensely successful enterprises like Uber, Airbnb, Pinterest, Stripe, and Square.
What makes them so good at identifying and building companies will go the distance? Here are a few opinions that have been shared by the PayPal mafia themselves over the years:
They Leverage Lessons Learned as a Team
According to Max Levchin, PayPal’s co-founder and chief technology officer, the initial days at the company were all about survival against the odds. As a team, they learned a lot from this extreme experience, and it binds them together in a lasting unit.
Today, they still use each other as soundboards when they need advice. When Jeremy Stoppelman was creating Yelp, he would frequently turn to Peter Thiel for advice or Max Levchin for marketing acumen.
They Support Each Other’s Ventures
When PayPal was bought by eBay in 2002, the alumni went their separate ways and used their newly acquired wealth to invest in tech start-ups and fund new ventures. They also continue to invest in each other’s companies and enjoy the vicarious reliving of our old experiences in this way, according to Roelof Botha who was head of business development at PayPal.
They Understand The Network Effect
According to Jeremy Stoppelman, PayPal alumni benefit from the network effect – when your name is associated with success, people seek you out to become involved in new and exciting ventures. Because the members of this group have invested in so many thriving businesses over the years, bright young stars want to bring them into the fold whenever possible.
Building Bridges and Business Success With The Alumni Advantage
In short, the PayPal mafia is an excellent example of how the close ties between a group of corporate alumni can pave the way for shared success down the line. There is a lot to be said for keeping bridges intact when it leads to exciting new horizons like these.