“It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them. —Niccolò Machiavelli, The Prince”
“Those who have learned to walk on the threshold of the unknown worlds, by means of what are commonly termed par excellence the exact sciences, may then, with the fair white wings of imagination, hope to soar further into the unexplored amidst which we live. —Ada Lovelace”
“Its earliest hires included high school dropouts, ace chess players, and puzzle champions—often chosen because of their eccentricities and peculiarities, not in spite of them.”
“The company wasn’t hard to create at all, he said. Rather, “it was a hard company to keep alive.””
““To this day,” remarked a fraud analyst, Jeremy Roybal, “I still bleed PayPal blue.””
“For its supporters, the Review offered a breath of fresh air to Stanford’s stifling political correctness. For its detractors, the Review engaged in disingenuous devil’s advocacy, opting for provocation over substance. The Review became famous on campus for its political heterodoxy. Its inaugural editor-in-chief would later become infamous in Silicon Valley for his.”
“Nosek winkingly referred to these gatherings as “the billionaires’ breakfast club.” “We all believed that the others were going to build big things,” Nosek explained. Over meals, they’d discuss the latest developments in technology, philosophy, education, start-ups, and their predictions for the future. It was here that Nosek learned of Thiel’s interest in start-up investing.”
“Thiel to invest. “In retrospect, just about everything was wrong with it,” Thiel later said of Smart Calendar. The saturated e-calendar space had “like two hundred companies” competing for dominance. Facing headwinds from without and conflict within—Nosek was ousted following a fallout with his cofounder—Smart Calendar shuttered.”
“For Musk, the Scotiabank internship proved “how lame banks are.” Fear of the unknown had cost them billions, and in his later efforts at X.com and PayPal, he’d return to this experience as evidence that the banks could be beaten. “If they’re this bad at innovation, then any company that enters the financial space should not fear that the banks will crush them—because the banks do not innovate,” Musk concluded.”
““A lot of times,” Musk explained, “the question is harder than the answer, and if you can properly phrase the question, then the answer is the easy part.””
““I was trying to think, What would most influence the future? What are the problems we have to solve?””
“While at UPenn, he made a short list of the impactful fields of the near future: the internet, space exploration, and sustainable energy. But how would he—Elon Musk—best position himself to influence the fields that would “influence the future?””
“To Musk, this “nervous system” fused science fiction with hard science—a cocktail of Adams and Feynman—and he spoke of it with unselfconscious amazement. “Previously we could only communicate by osmosis. One person would physically have to go to another person. For a letter, someone has to carry the letter,” he observed. “And now, you could be in the middle of the Amazon jungle, and if you had just one satellite signal to the internet, you’d have access to all the world’s information. That’s unreal.” Unreal—yet being made real all around him. Musk craved the chance to do more. He wanted to be responsible, as he put it, for constructing the internet’s “building blocks.” Zip2 was now behind him. More than a little cash lay before him. It was time for his next venture.”
“Of course, Musk wasn’t alone in thinking that offline banks were too slow to move online. By the late 1990s, the digital finance and banking space swarmed with start-ups. But Musk found those services lacking in one respect or another—he wasn’t keen on launching just another dot-com bank. Musk’s vision for his new financial services firm was—unsurprisingly—ambitious. What if, he wondered, a single entity unified a person’s entire financial life? In some of his earliest investor pitches, he called this idea “the Amazon of financial services”: finance’s one-stop shop, offering not just standard-issue savings and checking accounts, but everything from mortgages to lines of credit, stock trading, loans, and even insurance. Wherever money went, Musk believed his new company should go, too.”
““Very much let’s go, let’s get going and do something, build something, achieve something.””
“At Musk’s home one day, Payne walked into the bedroom. “The room was literally filled with books—biographies or stories about business luminaries and how they succeeded,” Payne said, “In fact, I remember sitting there and at the top of this stack was a book about Richard Branson. It kind of clicked to me that Elon was prepping himself and studying to be a famous entrepreneur. He had some superordinate goal that was driving him.””
““There’s a wave, right?” Ho said. “And you either catch the wave, or you can sit there waiting—and Yahoo goes by.””
““One of the things that Elon was highly adept at, which frankly I underestimated… was on the VC side,” Fricker said. “He would articulate what was wrong with the industry. You know, the big monoliths, the lack of democracy in pricing… everybody would get all fired up.””
“(Well into his SpaceX years, Musk would propose a solution to this problem for a future Mars government, suggesting that all Martian laws include automatic sunset clauses.I)”
“The key, per the team’s attorney, was banking venture capital money—and squaring circles later. “When approached with the conundrum that we have in terms of the desire not to misrepresent ourselves to potential venture capitalists, [Johnson’s reply] was ‘The deer is almost in the box. Don’t spook the deer. Business plans change all the time,’ ” one early X.com employee remembered.”
“Fricker also became flummoxed by Musk’s promise that X.com would handle everything under the financial sun. “The description of what we were doing was… 10x what we were actually doing. And if there was frustration… it was that I wanted to get something built, regulated, and productized,” Fricker said. “The more we described what we were going to build, the more difficult the project became to do that.””
““What was more potent than the mathematical exercise was the story,” Payne would appreciate later, “and Elon was very good at pointing to the future—just as he is today—and saying the objective is over there, and I know it’s over there, and we should all go over there.””
“Musk had learned that start-up success wasn’t just about dreaming up the right ideas as much as discovering and then rapidly discarding the wrong ones. “You start off with an idea, and that idea is mostly wrong. And then you adapt that idea and keep refining it and you listen to criticism,” he’d tell an audience years later. “And then engage in sort of a recursive self-improvement… keep iterating on a loop that says, ‘Am I doing something useful for other people?’ Because that’s what a company is supposed to do.” Too much precision in early plans, he believed, cut that iterative loop prematurely.”
“Musk responded graciously—but rejected Fricker’s premise that he was asleep at the wheel. “Well said, although I think you may misread me a little. My mind is always on X by default, even in my sleep—I am by nature obsessive-compulsive,” Musk wrote back. “What matters to me is winning, and not in a small way.””
““I like to have something to believe in,” she said, “and Elon was always about changing the world or doing something good for humanity.” She also appreciated Musk’s quirks. “When he has a hard problem on his mind—at least back in those days—he would spend a lot of time looking at his computer, like he was reading something or doing something, but I don’t actually think he was reading something. He was just thinking. Or more like just waiting for the answer to come,””
“But Thiel could also see the value in operating experience—time in the CEO chair could fine-tune his investor antennae. So he proposed a compromise: he would serve as Fieldlink’s “ramp-up CEO,” doing the job until the business found its footing. Then, he would depart the position, remaining an advisor and letting someone else steer the business. Levchin agreed.”
“Both Thiel and Levchin told Nosek that they’d iterate until they landed on a concept that struck sparks. More persuasive to Nosek was the team’s alchemy, which now included three members—Levchin, Pan, and Simmons—that he knew from college. “I decided to work on it because of this feeling that, together, we’re going to do something amazing,” Nosek said. “Even if they had been wanting to do something completely different, I would have wanted to work with this group.””
“As a blueprint for the mobile future, Confinity’s February 1999 business plan holds up surprisingly well. The company planned on riding the growth of the handheld computer and electronic finance markets. “Today’s handheld computer market shares certain characteristics with the Internet of 1995 and the home computer market of 1980,” the plan stated. “New applications and lower costs are shifting demand from a core group of technologists toward the general public.” In theory, the expanding number of handheld devices would grow Mobile Wallet usage, and users would install the Mobile Wallet because their friends and family already had one. The business plan anticipated the obvious question: “How will the Confinity network ever come into being if its value to each particular customer depends on the prior existence of the whole network?” The team developed two approaches to addressing this tautology: top-down and bottom-up. From the top down, Confinity would find and target prime business and market candidates. The bottom-up approach would see users inviting members of their own networks. “Confinity,” its founders wrote, “will combine these two approaches, albeit with the major initial emphasis on the second, grassroots model.””
“Later, in his role as an investor and advisor, Thiel emphasized the importance of a team’s “prehistory”—the bonds of work and friendship that exist prior to starting a venture.”
“But Thiel’s view was that trust among teams was hard to build, and that friends-turned-employees came preinstalled with trust. “It was this network hiring sort of effect where we had a great deal of trust that everybody was reasonably bright, and trying to work toward making this successful,””
“Trust produced speed. “We could be at a much faster cycle than a lot of companies where you have to take a month to sort of message things throughout the company before you could say what you were trying to say.””
“Wallace, a mild-mannered personality, also felt a “comfort level” speaking up at Confinity. “If I had been walking into somewhere where I didn’t know anybody, I wouldn’t have been talking that way.””
““They hired really good people, gave them a lot of trust, and so people ran at their own pace, just made sure that they checkpointed to make sure we were in sync occasionally. And then we would just keep on running. So they got the best out of some very, very smart people.””
““This was one of the lessons we had about PR early on,” Nosek remembered. “It was much more important for recruiting and for perception among investors than it is about actual product adoption.””
“In June 1999, Confinity signed Master-McNeil to name its beaming product. Master and her team interviewed Thiel, Levchin, Nosek, and other Confinity employees. Together, the group solidified what the name should suggest: Convenient, easy, simple to set up/use Instant, fast, instantaneous, no waiting, time-saving, quick Portable, handy, always with you Transmit, “beam,” exchange, send/receive, give/get Money, accounts, financial transactions, numbers, moving money around”
“To win recruits over, the team crafted an edgy sales pitch. Years later, Levchin described the approach to a Stanford computer science class: Engineers are very cynical people. They’re trained to be. And they can afford to be, given the large number of companies that are trying to recruit them in Silicon Valley right now. Since engineers think any new idea is dumb, they will tend to think that your new idea is dumb. They get paid a lot at Google doing some pretty cool stuff. Why stop indexing the world to go do your dumb thing? So the way to compete against the giants is not with money. Google will outbid you. They have [an] oil derrick that spits out $30 billion in search revenue every year. To win, you need to tell a story about cogs. At Google, you’re a cog. Whereas with me, you’re an instrumental piece of this great thing that we’ll build together. Articulate the vision. Don’t even try to pay well. Meet people’s cash flow needs. Pay them so they can cover their rent and go out every once in a while. It’s not about cash. It’s about breaking through the wall of cynicism. It’s about making 1% of this new thing way more exciting than a couple hundred grand and a cubicle at Google.”
““Max kept repeating, ‘As hire As. Bs hire Cs. So the first B you hire takes the whole company down.’ ””
“Additionally, Confinity’s leaders mandated that all prospects meet with every single member of the team. Once the lengthy round-robin of interviews was completed, the team discussed the candidate as a group, asking whether they passed the so-called “aura test.””
““Clearly hypercompetitive. Clearly workaholics. Clearly want to change the world. It was like, I found my people.””
“In Confinity’s early days, Levchin observed that the number of people in a room correlated positively to friction in basic communication. “If you’re alone,” he explained, “you just work really hard and hope it’s enough. Since it often isn’t, people form teams. But in a team, an n-squared communications problem emerges. In a five-person team, there are something like twenty-five pairwise relationships to manage and communications to maintain.””
