Buttons as Strategic Moat

“When Confinity had first spotted eBay users’ enthusiasm for its products, designer Ryan Donahue worked with David Sacks to improve the auction payment mechanism. An early incarnation consisted of two steps: First, the user would press the PayPal button; next, they’d enter the dollar value of the transaction and click Pay. It occurred to Donahue to simply fold the second step into the first: if users entered the dollar amount and pressed the button, the next page could pre-populate the total and confirm payment. The change seemed quaint, obvious, even trivial—but it shaved precious seconds from transactions. And in the view of David Sacks, every moment of friction was fat to be cut. Small, time-saving improvements, he believed, led to stickier products—and instant gratification won over impatient users. Those improvements to the payment design produced a corollary insight: What if buttons were the core product? What if these slices of pixels could help PayPal become the web’s default payment system? The team began to brainstorm a “whole suite of embeddable buttons that, if someone was on your website, they could click to pay you,” explained Sacks. Buttons? The idea sounded laughable, but its implications were significant. Strategically, a focus on buttons catapulted the company into a space with few rivals. Sure, copycats could marry money to email. They could lavish bonuses on would-be users. And they could fight for auction territory. But it would be a while before they obsessed over buttons.”

“Even before the merger in late 1999, David Sacks had put pen to paper on an early vision for a button product. Over time, that product spec incorporated countless ideas from team members and captured many of the concepts that propelled PayPal to internet ubiquity. In many ways, the document represents the ur-text of modern PayPal. In deference to Musk’s passion for the “X-” branding, the team initially called the button product X-Click, though later renamed it Web Accept. Its closest precursor was a PayPal feature called Money Request, which allowed users to send a personal request for money by email. That email contained a link to a PayPal page. X-Click would take this function and make it omnipresent, “by allowing PayPal users to paste the Money Request link on their own websites, personal home pages, auction listings, or other URLs... The result is a single-click payment system for the entire web.””