Jimmy Soni’s book tells the story of how an ensemble of entrepreneurs, including Elon Musk and Peter Thiel, helped the online payment system prevail.
The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley
By Jimmy Soni
474 pages. Simon & Schuster. $30.
Dying is easy; dramatizing the dot-com world is hard. Where is the action in people staring at computer screens, pointing and clicking and typing? Even the costumes, hoodies and such worn by coders, the props of empty pizza boxes and foosball tables and sleeping bags under the desk, lack a certain oomph. At least the finance bros of the ’80s had snappy suspenders, martini dinners, strip clubs and buy-sell pads they could wave around between screams on the trading floor.
The development of online “wallets” might seem particularly bloodless — what, those things you use sometimes to buy stuff on the internet and often forget the password to? — and yet “The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley,” by Jimmy Soni, is an intensely magnetic chronicle in which ambitions and emotions run as red-hot as they did in the Facebook movie written by Aaron Sorkin, “The Social Network.” It helps that PayPal’s origin story, though essentially an ensemble piece, features two of the more complicated antiheroes of our time: Peter Thiel, who has become a significant player in right-wing politics, and Elon Musk, currently the richest person in the world, who makes aggressive forays into the cosmos. Each has previously been the subject of big biographies.
Here, though, interviewed along with scores of PayPal personnel — sometimes known as “the PayPal mafia” for their ruthless insularity — they are just two moneyed young men trying to lasso the moon, and often missing. Or crashing, as they did dramatically when Musk drove them to a meeting with Sequoia Capital in the McLaren F1 sports car he acquired after the sale of an early start-up, Zip2. Thiel compared the excursion somewhat opaquely to being “like this Hitchcock movie,” but it suddenly turned more “Dukes of Hazzard”: The car hit an embankment and sailed through the air “like a discus,” Musk recalls. (He and Thiel walked into the meeting separately but unscathed, despite having forgone seatbelts, not even speaking of the incident.)
Thiel initially thought that “beaming” money between PalmPilots, those chunky and short-lived precursors to smartphones, would be the next big thing; a former Stanford classmate convinced him to focus on email payments instead. Thiel comes off in Soni’s telling as pessimistic, occasionally unscrupulous and fiercely competitive, beating nine out of 10 colleagues in chess even after doing a rare celebratory keg stand. “Show me a good loser, and I’ll show you a loser,” he told an early employee, echoing the rhetoric of Donald J. Trump, whose presidential campaign Thiel would later support.
Musk reads as cuddlier and more magnanimous, with the grander vision: to upend and streamline existing financial systems, like Wells Fargo Bank, whose early website had, symbolically, a slow-loading stagecoach and not much else. He calls those systems, with their big empty buildings, outdated mainframes and code, “this herky-jerky frickin’ monstrosity.” He was comically preoccupied with holding onto the domain X.com for his scheme, even after market research showed that customers found it salacious or even sinister. Eventually, he was ousted as C.E.O. of the proto-PayPal while honeymooning with his first wife.
Personal lives barely appear in “The Founders,” in which bragging about sleep deprivation is the coin of the realm. “There’s definitely something about the nocturnal lifestyle for engineers specifically that really opens up the chakras of creativity or code-writing,” Max Levchin — an émigré from Ukraine and another PayPal founder who became a billionaire — told an interviewer for a PBS show called “NerdTV.” In one breakthrough moment, Levchin, a devoted battler of foreign hackers, plays Wagner’s “The Ride of the Valkyries”; other staff members blasted Salt-N-Pepa’s “Push It” for inspiration. They shot potatoes against the wall to release tension, and “massacred” stuffed mongooses after an unwanted corporate acquisition. (And they say there’s no reason to return to the office!)
Soni, the co-author of previous books about the mathematician Claude Shannon and Julius Caesar’s enemy Cato, is balanced and fluid in this solo outing, making mundane projects like the creation of an online “button,” or the dawn of CAPTCHA, somehow literary, comparing PayPal’s tale, improbably but effectively, to Dickens and the Bloomsbury group. He captures, and cheers, not any one genius but what Brian Eno called “scenius,” the rare sparks that can occur in certain groups, at certain times, and with lasting effects: The company’s alumni have fanned out to found among other entities YouTube, LinkedIn and Yelp.
Soni does intermittently fall under the sway of business jargon. Space is not just something Musk wants to conquer, but a teeth-gritting synonym for business realms (“the payments space”; “the saturated e-calendar space”; “the financial space”). Teams “gel”; executives “pivot” faster than Regan’s head in “The Exorcist.” And if you drink every time the author uses some iteration of the word “iterate,” you’ll be passed out cold by the end of the book.
But Soni also has a knack for the wry or lovely phrase, as when he describes Musk’s car, treasured as a work of art, taking a “distinctly cubist turn” after the crash or names a chapter about a different C.E.O.’s ouster “The Nut House Coup,” after a bar with discarded shells that crackle underfoot.
The agony over what to call this new product, with the help of a naming firm, makes for a particularly ecstatic chapter. What if it had been christened Cachet, like the Sydney Biddle Barrows escort service; or MoMo? PayPal prevailed thanks to its friendly sound (“a pal has their arm around you”) and double plosives; it also has the advantage of sounding like “people.” (Imagine Barbra Streisand singing: “People who need PayPal…”) More recent competitors in the “payment space,” like Venmo and Zelle, are not mentioned in “The Founders,” but a long battle with Billpoint, the now-defunct payment service once used by eBay, is one of the more fascinating subplots, as is watching eBay circle PayPal like a dirigible worried about getting punctured.
And lest you believe the problems of a few future billionaires doesn’t amount to a hill of beans in this crazy world, Soni appends a coda about the power of PayPal’s “mafia” to inspire that left this reader, at least, in sobs. No finance bro has accomplished that.