Meet the PayPal mafia An inside look at the hyperintelligent, superconnected pack of serial entrepreneurs who left the payment service and are turning Silicon Valley upside down. Fortune's Jeffrey O'Brien reports. By Jeffrey M. O'Brien, Fortune senior editor
Max Levchin (left) and Peter Thiel hatched the idea for PayPal over breakfast. Photos
Profiting from the PayPal connection PayPal founders Max Levchin and Peter Thiel estimate that their ex-PayPal colleagues run $30 billion worth of businesses. Here's a snapshot of what these guys are up to now. View photos Despite his ouster from PayPal, Elon Musk has made up with the mutineers -- and even invests in their ventures. More from Fortune Next-gen female entrepreneurs
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(Fortune Magazine) -- A door opens, and a blond man appears in a white jacket with large buttons. "Good morning," he says. "Peter's in back. Make yourself comfortable in the dining room. I'll be serving breakfast shortly."
Holy cannoli. Peter Thiel has a butler. The 40-year-old entrepreneur runs a $3 billion hedge fund. He's the founder of a new venture capital firm that's the talk of Silicon Valley. He's got an early $500,000 stake in Facebook that's now worth about $1 billion on paper. The man has bankrolled everything from restaurants to movies and is lauded by many as some kind of free-market genius. He drives a half-million-dollar McLaren supercar. And now a butler.
Just back from a morning run, Thiel emerges into the dining room of his home in the shadow of San Francisco's Palace of Fine Arts. Wearing a powder-blue T-shirt wet with sweat, he displays the relaxed self-confidence of Michael Corleone. Perhaps it comes with the butler. "I'm Peter," he says, extending his hand and smiling before thanking me for agreeing to such a late breakfast meeting. It's 7:30 A.M. "It was nice to sleep in."
The doorbell rings, and in walks a scruffy, sleepy-eyed Max Levchin, 32, who has trekked over from his new $5 million-plus home a few blocks away in Pacific Heights. Every garment on Levchin's unwashed body is a freebie - University of Illinois zip jacket, mismatching shorts, bright orange T-shirt with some Hebrew lettering.
The high-stakes fight for your friends Levchin runs one of the hottest companies on the web, a photo-sharing site called Slide that draws 134 million users a month. Making neither eye contact nor conversation, he presses his lips together, nods to indicate that he is, as ever, ready for business, and sits.
It's been nine years since Thiel and Levchin first dined together at Hobee's, near Stanford University. Levchin had an idea for a company, and Thiel wanted to invest. In short order Thiel joined as a co-founder, and together they set out to "create the new world currency."
Their brainchild would change the course of the Internet. They'd bring on several hundred employees to what would become PayPal. They'd sign up more than 20 million users and burn $180 million in funding before breaking even and selling out to eBay (Charts, Fortune 500) for $1.5 billion.
And then things got interesting. The eBay deal, remarkable only because it happened in the bleakness of 2002, wasn't so much an exit as an explosion. Most of PayPal's key employees left eBay, but they stayed in touch. They even have a name for themselves: the PayPal mafia. And the mafiosi have been busy.
During the past five years they've been furiously building things - investment firms, philanthropies, solar-power companies, an electric-car maker, a firm that aims to colonize Mars, and of course a slew of Internet companies. It's amazing how many hot web properties can trace their ancestries to PayPal.
Besides Facebook and Slide, there's Yelp, Digg, and YouTube. Thiel and Levchin, the don and consigliere of the mafia, figure that all told, there are dozens of enterprises worth a total of roughly $30 billion - and that value is growing rapidly, as evidenced by Thiel's good fortune with Facebook.
This group of serial entrepreneurs and investors represents a new generation of wealth and power. In some ways they're classic characters of Silicon Valley, where success and easy access to capital breed ambition and further success. It's the reason people come to the area from all over the world. But even by that standard, PayPal was a petri dish for entrepreneurs. The obvious question is, Why?
Maybe it comes back to the early hires. After their first breakfast, Thiel and Levchin began recruiting everyone they knew at their alma maters. "It basically started by hiring all these people in concentric circles," Thiel remembers. "I hired friends from Stanford, and Max brought in people from the University of Illinois."
They were looking for a specific type of candidate. They wanted competitive, well-read, multilingual individuals who, above all else, had a proficiency in math. Levchin's original idea for PayPal was to beam money between PalmPilots, but Thiel has a way of seeing the bigger picture.
A staunch libertarian, Thiel figured a web-based currency would undermine government tax structures. Getting there, however, would mean taking on established industries - commercial banking, for instance - which would require financial acumen and engineering expertise. Thiel and Levchin also wanted workaholics who were not MBAs, consultants, frat boys, or, God forbid, jocks. "This guy came in, and I asked what he liked to do for fun," Levchin recalls. "He said, 'I really enjoy playing hoops.' I said, 'We can't hire the guy. Everyone I knew in college who liked to play hoops was an idiot.'"
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
In my travels across the country this summer, I had the opportunity to visit a number of communities MUCH SMALLER than Rotterdam that have used state and federal grant monies to build some awesome modern infrastructure -- sewers, municipal buildings, community centers and parks.
The lesson learned is that while Rotterdam has been reluctant to apply for state and federal grants over the years OTHER COMMUNITIES HAVE BEEN GETTING OUR TAX DOLLARS and using it to modernize their infrastructure, stimulate economic development and improve the quality of life for their residents.And while state and federal budgets may be tight - there is NO SIGN that grants are going away completely. The first step for Rotterdam to compete is to have a vision and plan to implement that vision. The Vision 2020 Parks and Recreation Plan is just a part of a larger vision that is needed for our town.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
I don't care what the rest of you think DVR is RIGHT!!!!!!!! Do your homework before you talk out your a** and askingquestions after......These grants are there for the taking....we might as well get em before someone else....look around will you...Rotterdam needs help
Now a dog park? check to see how many dogs were and/or running loose in this Town.
Central park was a great park then came the invasion of undesirables
and it's not the same anymore
People are not worrying about recreation but creation of jobs building their lives after the storms
have the Parks commission have a Thanksgiving dinner for the poor and needy in our Town. they aren't worrying about swings and things GET A GRIP ON WHAT IS PRIORITY
We can't afford it......not to mention over the past 60years or so....during the GE/alco etc high times..I wonder where all that $$$$$$$$$$$$$$$$$$$$$$$$$$$ went.....we stayed in the 50's...WHY? because folks like the Mayor of Hamburg kept things as they were.....the police force was the 'most protected' thanks Dominelli...for what?
to be left with SH!T !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
The country, the states, the cities and towns are close to bankruptcy. THERE IS NO MONEY!! Medicare is on shaky ground as is the future of social security. There are no jobs. Prices are going up. The economy is flat. We don't manufacture a damn thing anymore. There shouldn't even be taxpayer's money in a 'parks account'....not now!!
They spend millions of taxpayer's money on finding out why fish swim upstream or some other stupid useless program.
The only folks that support this kind of foolish spending are folks that must be comfortable enough to not mind the increased prices, doesn't mind the taxes they are paying and is lucky enough to have a job!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
The country, the states, the cities and towns are close to bankruptcy. THERE IS NO MONEY!! Medicare is on shaky ground as is the future of social security. There are no jobs. Prices are going up. The economy is flat. We don't manufacture a damn thing anymore. There shouldn't even be taxpayer's money in a 'parks account'....not now!!
They spend millions of taxpayer's money on finding out why fish swim upstream or some other stupid useless program.
The only folks that support this kind of foolish spending are folks that must be comfortable enough to not mind the increased prices, doesn't mind the taxes they are paying and is lucky enough to have a job!
have the Parks commission have a Thanksgiving dinner for the poor and needy in our Town. they aren't worrying about swings and things GET A GRIP ON WHAT IS PRIORITY
Since you are suggesting the idea for a Thanksgiving dinner for the poor and needy -- why don't YOU put on the dinner instead of sitting on your butt and telling other people what to do.
As for helping the poor and needy, I already support the various local charities that provide assistance to the poor and needy.
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
DVOR you really show your true colors when you have to defend your beliefs...Put the park money grants, or however to good use. You need treatment for the real world and not in "OZ" even the Wizard is tired of your ranting As for my butt, it's none of your business. Offensive remark if I could I would put on a dinner but my finances are not from grants, interest, IRA . Live modestly and happy and have opinions just like you It's time for new blood and put the P and R on the back burner. Town needs to create NOT recreate
Same o' same o statements when no one agrees with you.
DVOR you really show your true colors when you have to defend your beliefs...Put the park money grants, or however to good use. You need treatment for the real world and not in "OZ" even the Wizard is tired of your ranting As for my butt, it's none of your business. Offensive remark if I could I would put on a dinner but my finances are not from grants, interest, IRA . Live modestly and happy and have opinions just like you It's time for new blood and put the P and R on the back burner. Town needs to create NOT recreate
Same o' same o statements when no one agrees with you.
state and federal grants that are designated for park development can ONLY be spent on park development ---- which I would contend is not only a good use but a great use
if you want state and federal grants for something else that you consider a "good use" .. do some research because there are grants for many different things
my personal finances are not from grants either ... but I choose to support improving our parks and recreation system and programs AND still am able to give to other causes
if you believe that putting on a town dinner for the poor and needy is something worth doing ... then lead the cause -- you might be surprised who and how many people would help you with it -- but I have enough on my plate at the moment so I am not going to LEAD that cause (help out is possible .. but not lead)
George Amedore & Christian Klueg for NYS Senate 2016 Pete Vroman for State Assembly 2016[/size][/color]
"For this is what America is all about. It is the uncrossed desert and the unclimbed ridge. It is the star that is not reached and the harvest that is sleeping in the unplowed ground." Lyndon Baines Johnson
Most of you just dont get it.....I give up, you keep repeating the obvious issues we experience in this bad economy and expect nothing can be done until it s fixed....my god, everyone doesn't sit around b**ch and complain and say I can't!!! You can !, look around at the other municipalities...They DO!
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