The PayPal story is not a story of a product; rather it is the story of a few people known as the PayPal Mafia or Silicon Valley Mafia who became one the most successful entrepreneurs of the world and founded companies like Tesla, YouTube, LinkedIn, etc.
What is PayPal?
PayPal is an internet payment system company which is operating in over 200 countries!
Luke Nosek, Ken Howery, and Max Levchin (alma maters of University of Illinois and Stanford), started working on developing a security system for mobile and handset devices and launched PayPal as a money transfer service in 1999.
PayPal moved towards creating a history when Elon Musk joined hands with the would-be PayPal Mafia!
X.com, an online banking company, founded by Elon Musk, merged with Confinity in the year 2000 as Musk believed in the idea and future of internet payment systems.
Together, they increased the efforts on marketing and promotion activities and launched an offer of free $10 for every new sign up account.
As expected, PayPal changed the whole trade and commerce industry within two years. That was the time when people started seeing the impeccable power of the internet when funds could be transferred easily and securely via e-mail and the internet using the regular debit/credit cards.
People started making lakhs of payments every day, and the clientele of PayPal grew to 10 million personal accounts and over 2.5 million business accounts in 2001. PayPal processed over $3 billion payments in the same year!
Therefore, what PayPal Mafia did was not just a creation of an internet payment system, they laid the foundation of the e-commerce system currently booming the market worldwide.
Well, I hope you got an idea about what is PayPal and who were the people behind the creation of the revolutionary idea.
Trivia: They were called the PayPal Mafia by Fortune and released the image that we have featured in this post. It depicted the PayPal team in Mafia-ambience.
PayPal goes public; Later gets acquired by eBay
Soon after creating a huge clientele and making a secure gateway for payments, folks at PayPal decided to take the company public, and the Initial Public Offering (IPO) of PayPal generated over $60 million.
Well, what happened later was the end of PayPal Mafia working together as a team as eBay acquired PayPal for $1.5 billion in 2002. What followed later was the growth of a company through the footsteps of a corporate giant.
The end of PayPal Mafia & the foundation of other big companies
Unhappy with the corporate culture of eBay, a majority of the original PayPal folks left and started their ventures.
Among the notable,
- Peter Theil became the Professor of Entrepreneurship at Stanford
- Elon Musk founded Tesla and SpaceX
- Reid Hoffman founded LinkedIn, and
- Steve Chen co-founded YouTube!
While the business of PayPal grew enormously through the merger and acquisition strategy of eBay. All the auctions started happening through PayPal, and there were hundreds of millions of active PayPal accounts created!
PayPal is now being used by millions of people across the world everyday! People are making money online through blogging, advertising, etc.
If you are somebody who would need the services of PayPal. We have written a post to help you create your own account on PayPal.