I was having a conversation the other evening about Peter Thiel’s theory on why the Paypal mafia (all the people that came out of Paypal and started 7 $1 billion+ companies in Silicon Valley) succeeded as much as it did. I couldn’t remember where I read or heard his answer, but basically his point was that Paypal wasn’t so easy as to trick people into thinking building a successful company came without hardship and wasn’t so hard that they failed and wrongly thought it was impossible. After some Googling I landed on this James Altucher podcast with Thiel, which I’m pretty sure I’ve never listened to, but definitely has the answer I was looking for (if you know where else he said/wrote this, please let me know).
Anyway, his answer to why was the Paypal mafia so successful:
Paypal was probably the single company in silicon valley that produced the most entrepreneurs, the most startups … There have been something like 7 companies started by ex-Paypal people worth over $1 billion … I think we had a lot of strong personalities, we found a way for it to work. I think the learning at Paypal was that it was a tough business to build, we had a lot of competition, it was a lot of regulatory challenges, but we sort of figured out ways to overcome them. The lesson of Paypal was that you could build a great company, but it was hard. it was not easy, it was not impossible. I think that when people come out of super successful companies like Google or Microsoft, they’ve often experienced business as too easy and they’re set up to fail. Whereas if you come out of a company that has completely blown and failed, you often learn to set your sights lower and your expectations lower … I think Paypal was this intermediate case where people learned that it was hard but possible to build a great business.