mobile app featuring your view of what's happening in washington live and on-demand . keep up with today's biggest investment live streams of four proceedings from congress, white house events, the courts, campaigns and more from the world of politics all at your fingertips . you can also is a current episode of washington journal and live scheduling information and c-span radio plus compellingpodcasts . c-span now is available at the apple store and google play . your front row seats to washington anytime, anywhere. >> my name is catherine boyle and i'm a general partner at andreessen horowitz. i'm here to welcome author jimmy soni to discuss his story "the founders: the story of paypal and the entrepreneurs who shaped silicon valley". and it's especially wonderful to be here because i knew jimmy in my early 20s and

this book takes place talking about a group of people who support each other and work really hard together and have been lifelong friends meeting after college, in their early 20s so it's special for me as a former fellow journalist and writer.because we share that time as well in the founders jimmy packs unpacks the history of paypal from a startup to one of the biggest tech companies in the world. hit he tells us of the unsung heroes, extreme competition and huge challenges faced by the company as it fought to implement currency. will be covering a lot and we encourage you to put the question in the chat . we love to source some audience questions at the end. we'llget in your questions at the end but for now welcome jimmy . >> thank you for having me and i honestly like, i couldn't think of anyone better to do this with because we've known teach

other now for well over a decade. it will make it more fun and we can tell american stories as well as reasonable founders. >> was is one of the things that always surprises me when you said you were doing this book is you were an outsider to silicon valley it's coming into a subject matter you have necessarily addressed before. you're noty someone of west coast , what made you want to tell the story of paypal? >> it was circuitous but i admit that. i kind of write that i was probably not the person who should be doing this but i joked with my friends is like , it's this is older book. my last book was about an engineer and mathematician named claude shannon and in the course of doing that book which is called the line to play an approach where he was, where we spent a big chunk of his professional life at bell laboratories and bell labs in the 20th century is today and then was

renowned as this incredible all of innovation. they invest touchtone dialing . they invest satellite technology, the medications networks and the transistor. they win several nobel prizes . it's basically like the place to be innovating in the 20th century in the united states and technology. and bell labs is this incredible, that's not from the line of one person, is rtfrom a group of one people thinking of what are other groups in american history where it's been out for kyle and that rich and i actually looked at othertopics . the roads not taken were a semi conductor where you famously have this bgroup, somebody had written a book. it was a book about txeroxed parts that covered that cluster as well. i think the book was called where the wizards state of

lake as i thought one of the best titles for . there is general management and general magic i was excited about it and did this in thisincredible documentary came out . they're going to own it, it's so good and everyone should see it . paypal i stumbled into history, stumbled into a and i started asking edquestions. i assume because of the personalities involved, elon musk, the founders of youtube, peter thiel. it's like the avengers. i assume somebody had done this. and then when no one had the other thing i noticed is that the stories were just fantastic . the untold stories were so good and i knew there was potential there so i came to it but i most definitely came to it as an outsider. because you're my friend i can make hold you with the most basic questions about what is free money?

what's the terminology but i'll say the virtue of being an outsider i found that the same thing applies in my last book and in this book. you're an outsider was trying to decipher something to an audience understand it, you have to ask basic questions and build it back up in the writing. the ways i was most excited is everyone thinks they know what an ipo is an initial public offering. but if you really go back to basics to understand it and play itback to the reader i know a lot of my readers were going to be in . so what does it mean to take up company public? the basic question is an asset, liability or writers buildings diseases are not familiar with. >> application a lot of the reviews and commentary. it's written by historian, a horse historians are never part of the ecosystems they i i got into . in some ways is one of these books that a lot of books are written by journalists who

are asked to be part of the ecosystem being an outsider lens and treat it more as a moment in history. >> the other thing, the other piece of it is is you can ask questions that someone who has challengingtask of reporting on these people every day . you can ask questions that are not allowed to ask. i don't know, i admire journalists have to cover big firms, their task is a lot harder than mind away. i was always the enjoyable conversation . i'm not holding their profitability statements to account. asking them from the last 20 years ago so i journalists is not to be able to come, then taking back theuniversity of illinois at champaign . he was more than open about it. in some ways my task was much rarer but coming as an outsider i can also read and asked random questions that i think were relativelyengaging hi

. >> you start the book out and this is one of the things i think even after the reading the book and thinking about it i still don't have the answer to . people look at paypal as one of these may a lot, but that sounds coming out of paypal is extraordinary. it touches aspect every aspect, multiple companies, some of the most valuable companies in the world and as you said you werelooking at these pockets of talent . i blanketed on the word that you use about talent growing better and supporting each other . what was it about paypal and what have you learned about talent magnets and how this ecosystem functions to be able to yield all these incredible new companies and new results ? >> the word i'm going, it was brian eno, the music producer . he used the word senius and

he was describing artistic clusters so he was describing the era in which rembrandts were doing their work and it was funny. when he writes about it, i responded in the intro. when he was in art school he learned that these were solitary geniuses, revolutionary but really when you start studying more he realized there are collectors and there were people underwriting the art . there were different venues and people and all cluster. that was supporting this particular get. so senius is interesting because it leads you to think about this story not just apple equal steve jobs, microsoft equals bill gates. with paypal you don't have that. you have a lot of people. at least 200 people in palo alto, several hundred more when the company goes public and you ask about the

brightest lights in modern technology so for me what i was trying to do and it was, one ambition was just tell the story meeting what happened to create paypal? no one had done a look at that and that was the sort of goal. the goal was when doing that you might illuminate. like, here are a few of the things that actually made this group, that made the group what it is later. my story is going to disappoint some people because it stops in late 2002. i write about the things these people are more famous for today but i think there were more threads and things in the water in those early years that were really striking to me. and hopefully arestriking to readers to . >> you have some megawatt personalities in this book, very famous people. peter scenius, elon musk and

yet the story does in some ways revolve around fax. talk about why you chose to start the story there and how you realize the story in many 'arways even though there's man personalities but is oneof the primary protagonists . >> authors are allowed like editorials and that was one of the ones i wanted to throw. that's one of them. if you take a step back, the paypal we know is the merger of, it's created by the merger of two companies. one is called text.com and that's elon's companies. kinfinity traits paypal and it's founded by peter thiel. the reason chapter 1 kicks offwith max is its origins are in cryptography, in mobile encryption and mobile devices . in college max developed a passion for palmpilot and chart wizards and casio, like

we're in a time machine now. it's low-power devices. like, he was trying to basically take these devices and push them to their technical limits. how much could you make a palm pilot do? that is what gives rise to the company that he pitches to peter thiel and he has this idea, where in a mobile encryption library. i'll get money and peter is like you seem smart so i'll invest. that company is called like, that is in 1998. chronologically elon doesn't start till 1999.from the perspective of this accuracy, it's the kickoff, more personally i found that because it was not a super well-known figure there were so many things about his life andpersonality that were so interesting . one of my favorite writers he says the best characters don't know that they are characters.

they are intense and they come alive on the page but they don't know it. they'renot self-conscious about it .max is not a household namefamous . so in a way that is not this persona. like build up around him. so everyone, i would ask a few more people i would discover that he had these this insane interest, this once in a generation mind. in college, if i remember correctly as a way of getting around the requirement to run write a paper, he decides he's going to write a paper on the film and that film is rialice evans mri. he watches seven samurai once and write the paper but it gets into his head. he spends an entire summer to three watching seven samurai over and over again . but as it is in our discussion i believe his number, is watching it 110 times . would be 110 times. this is a 3 and a half hour,

so this is, it's not like billions. so i just found that to him that is perfectly normal. the rest of us, that is like what are you seeing in seven samurai at the rest of us don't see m? i found moment after moment like this, he had a near photographic memory andyou would say something . i felt like he was a character who didn't know he was a character. it's like his life is the stuff of legend. he's 90 miles away from chernobyl when the reactor explodes and hurls tons of radioactive materialinto the sky. he is shipped on a train away from the closest site of the disaster and on the way to the train , a border guard with a geiger counter stands is in his book geiger counter so they think is what is radioactive and at some point there's talk of whether he

should have his footamputated and his mom or his grandma is like takeoff issueand rescan the . they do. the foot comes back clean . turns out it was a rose for in his thing. it shapes his life in positive ways and his family secured funding from a refugee agency . he arrives like i think a sophomore in high school. he learns english by watching different strokes. so i just found these details that were so rich and that were picked over. he is had not wanted or build a big gigantic illuminating public life for himself. he still regards himself as an engineer's engineer. when you have that as a writer , you have somebody who can watch the same movie 100times and also as a photographic memory, you're ou like , i'm taking off with you. >> you mentioned something else when he was in college and one of the things if you're not familiar with the paypal story everyone thinks silicon valleystanford .

course, the university that actually matters here is university of illinois at champaign, . how do these needs, what were they working on e? they're talking about how the university plays into it. >> it's one of the things that i'm more than happy b. as somebody who grew up in illinois i was happy to discover and correct the record in this way. so stanford is a big part of the paypal story. a lot of thecall them the businessheavies come from stanford . real hoffman is a stanford graduate . peter has to degrees at stanford. on and on, you can go down the roster. a lot of the engineering from the company does come from the university of illinois and luke tells me one of my first ctconversations he said he was very skeptical as more that all of this project and he said if you're going to do this, just please don't write university of illinois ofthis

history . so just to give context, in 1995 a company called netscape what goes public. netscape's founder was himself at theuniversity of illinois . the person who founded yours and for an entire generation of engineers, like not just university ofillinois, that is the starting gun for the internet revolution but university of illinois is personal . max and others were there. that was just a few years. we were on the quad now he's on the cover of time magazine . it can do it so can we. there's this direct link. the university of illinois has an amazing history of contributions to computing some of the world's first digital computers are used there. they had a lot of defense

department funding throughout the 20th century so they were able to build big labs, the national center for computing applications is there . and you have a son of really talented engineers who go there. ithe first two engineers he hires come out of the university of illinois . the cofounders of youtube, two of the cofounders of you to come out of the university of illinois and you have all these people inspired by his example and also places on campus where their building things, building early prototypes, building primitive applications. a great example is this amazing technology called caffeine. caffeine was the use of ... they put the office vending machine on the internet and you could pay using i think your mobiledevice . this obviously added time to the transactions because you could just as easily go up and put a few coins in the b slot.

but you have like this excited about putting the soda machine online. although luke notes it was also emphatic that r rin the middle is pop, notsoda. i should correct that . you have this enthusiasm about digitizing everything, creating primitive prototypes and the students are doing this . it's a very for kyle ground at university of illinois, max legend meets luke and scott bannister, to people who become intellectual. he built several failed companies and has a small exit with the last company he built. it's enough money for him to come out west and begin the process of building what becomes paypal. that is part of why i think the university of illinois is an unheralded center for a lot of talent.

it was a perfect place to start the story because it was hugely unexpected everyone expects a story about silicon valley to start on the west coast, not the midwest . >> later in the book we get to the story of elon which is a totally different direct trajectory. one of the things you talk about that i didn't know anything about and we all think of him as his expensive character but he had mentors and his mentor was a man named doctor p or nicholson talk about how he helped him get his start and what you learned there ? >> doctor nicholson was one of the best interviewees that i had throughout this project. and i'll offer a bit of background. when he moves from south africa tocanada to attend the queens university ontario , he's a fresh arrival. he knows no one. what he does is he will read newspaper articles and contact interesting people that he finds in these articles. and just sort of find ways to connect with them.

you read an article about doctor peter nicholson who at the time is an executive at the bank of nova scotia . but doctor nicholson has a background in computing and in operations research and in physics . a scientific bringing. he looked at me and he said d you have a giant brain, just like super smart. i love that preface. so i said okay, let me track them down. and doctor nicholson has probably like the widest set of interests i've ever seen in another human being. even today is atoms are like square dancing and financial stuff and computers and the history of technology for a young 19-year-old, he is peter nicholson is one of his only bosses ever. and what happens is the context in and he and his brother campbell go have lunch with doctor nicholson and he says at one internship

he decides to and he joins the bank as an intern. what happens is he's joined a bank but he's joining like the right part of the bank which is this team run by this gigantic brain and the team is essentially a little unit within the bank that reports directly to theceo and the ceo has an interesting problem. he will talk to doctor nicholson and that team will get to work . doctor nicholson and he e developed a close relationship and friendship and they're still friends to this day. he said to me, even then his first love was space. hewould sit and trade math puzzles and they would talk about space exploration or physics . it would talk about whether he shouldcompany, go to grad school work the company . the quite basic problems that exist for the rest of us did exist for elon at one point and one of the things that happens is that he notices

right away, this kid is very precocious so he gives them or challenges, more demanding assignments and it was revealing to see that even then some of this first principle thinking that elon applies in automotive engineering were evident back then and doctor nicholson, he is a serious person and he said, it's quite clear even back then there's a custody about him you don't see in many people but he was one of one of my favorite interviewees because he also , he was thoughtful enough to see how those early experiences may have shaped and enabled some of elon's later successes and the biggest weight is after a summer of working at the bank elon is skeptical of innovation. >> it's funny to picture him as an investment banking intern but i forgot he had sthat experience.

one of the things people probably don't know is people on two companies that have somewhat different ambitions so talk about the difference between x.com and infinity and how they merge ? >> we can start with elon which is in early 1999 he is fresh off and he's created at acompany, sold it and he's thinking about what comes next . based in part on the banking experience he sees an opportunity in finance. what you want next.com to do is everything under the financial son. ask.com is going to be your mortgage broker, stockbroker, do your checking accounts, do transferring money . if youwant to wire transfer you're going to go to them. take out a line of credit you're going to go to bed . as youput it ask.com was supposed to be the global financial center . this is just context. 1999, dial-up internet, most peopleuse the internet or using it for transactions .

people are you nervous about entering credit cards and even then he says we have this technology now that can help upgrade bankmainframes and mainframes which are generally on old code and cut out all the fees . that's x.com, a revolution on finance. on the other sides side you have kinfinity and at the time in mid-1999 is focused on making a successful product of palmpilot money beating. when the latest iteration of the palm pilot came out in 1999 it had an infrared port in the corner and just to understand i went back and i read palmpilot for dummies so that i could get into these devices and it's funny.even palmpilot for dummies they say if you will the infrared port too far away clyou can't communicate. if you hold them too close they can't communicate. you have uto have this goldilocks distance to get it

done. nobody could come up with a use case for the sports. you can use it as a remote control. kinfinity's answer is you and i would be at lunch and you would need to send me $10 and take a palmpilot out and go through the excruciating process of beaming money and money was going to be a thing so it was just on money beating. in the summer of 1999 product becomes like transmission over email and that is where paypal is poor and that's also where the main paypal was born. >> talk about the name because that's one of the things of how they came up with the name and who liked d it, who didn't . >> there are places when you're writing books where you feel surefooted and there's placeslike you feel totally at sea.i was an outsider to the world of code . for me i read a lot of papers about mobile encryption just to edunderstand it. i read themac academic papers

he was looking at which was a great paper by this researcher . but even if i read those papers i didn't feel on really solid ground or i could be on solid eground with words i wanted to find out wheredid this name come from ? they had shared with me there recognize that kinfinity which is too many syllables too many syllables, he pulled up a website for a company called master mcneil. it was founded by and master and he is the firm they contract with to come upwith the name paypal . he's on one of my favorite characters. because he's a word person but also because he's so thoughtful about naming. he has a whole long process when he contracts with the company to create a product, he goes through numbers hundreds of names, interviews the team members to understand the history of the company and some of her claims to fame the trackpad

onit's on your laptop she named that. shenamed touchstone pictures . so i think one of her fondest memories is naming paypal. what history might have been re work cachet, momo, e-money beam. savio was on the list but i was fortunate. she had kept in her file this slide that advocated for oopaypal and i have that information and included it in the book, there are six or seven reasons why it was the best possible name for this company and their very specific . this is not, a lot of companies will come up with names as what she called a purely creativeprocess. dthrow it againstthe wall and see what sticks . she said a name is a crucial business decision . she had a harvard mba and she had like a background in literature so she had this

nice spot on the then diagram where words in business needs . with paypal it's verbal, it's friendly sounding and then as she put t ouit, your pal is mor 'than your friend. your pal as there are around you. it's a warmer definition and warmer image on your mind. she said the keys create closeness so that leaves you to remember the name for longer. there's pretty deep linguistics research on this. and you have this change later but you have the p and l which creates offenders and the p and y which create defenders. that's like visually very symmetrical. we never could find the origin but at some point they capitalize the middle he miand she went into her files and came back and said the only thing i can find is this note that i have that says tones

paypal. she couldn't ndrecall its origin but that's where it was born. it was the work of nancy master and her team thinking through very diligently are you going to make this process of even beaming money between palm pilots more inviting topeople and certainly more inviting than company . >> very true. i heard peter thiel talk about how the name is so important to him as an investor. if you look at paypal is friendly even though it's a fintech even though it's a fintech business, but uber has a menacing tone so it's interesting to see that story may have carried on through a lot of the investors as many of the people in this book on to thegreat upstanding investors . >> in other settings but also to me you mentioned that you said we always thought paypal was friendlier than x.com and

facebook was more genial than myspace whichfeels a little bit more selfish . sounds menacing relative to lyft. i think of the naming, i like the etymology of how things come to be so for me understanding where the name came from was interesting. i think it's also interesting that in spite of all of the talents in this room at the time , some of the leading technologists of our day, they were so backwards on the to name . at sea had to advocate for paypal. the team did not want to initially. you had people saying no one's going to trust your money. years later, one year later but years later especially to a person they said we were she was right, we were wrong. >> it's nice that he did not getting his ex with space x

so everything comes full circle. >> you the url again, purchased it from paypal corporate some years ago. and it is the end of one of the final scenes in the book is in real wiring that.com erdomain that was restored to its rightfulowner . >> of the things you've gotten so much praise for is the fact that you talked to so many people who work at the company. roit wasn't just talking to the famous names or the people who've gone on to be successful but you talk to many of the employees. you were able to get tropes of emails because the people who work were packrat.talk about some of the lesser-known figures and how they impacted your understanding of the storyand also the story itself . >> it's a good question and i'm glad people have picked up onit . i had a view that the most interesting stuff in companies tends not to happen in the boardroom. it's really in the micro

creation and ideas that happen among employees that are going to get therichest material and reflections that are never told . i also had personally when i started at the beginning of the story, it's easy to get seduced with the idea that the megawatt personalities, the well-known people that drove the company forward but time and again what would happen is those people would play back to me and say you should stop talk to david because he was responsible for helping to create the captcha. you should talk to steinle because she is the designer. i would do cold emails or reach out and i kind of consciously wanted to tie all these threads together because in some cases these people have never been spoken

to about their experience. it was so easy to reach out to people who are accustomed to press for someone who's never been contacted by a writer, they can have their guard up. i tried to win trust. i had to fill out questionnaires, i had to do all sorts of things. takeredeye flights to make schedules work . what happened is i found a series of characters who like max are like novelistic but they don't know that they are. and that's best. no one had actually gone into it. one of the canonical examples for me as a gentleman whose name is sanjay. he is not someone who's a household name. elon fires sanjay early on at x.com and he's a brilliant mind who had worked in financial services for a long time at that point. he had a failed startup and

joined x.com. one of the signature contributions he makes is something that almost all of us listening had used before. if you had to register your bank account with another institution, you'd probably gone through the experience of they have to send you a little bit of change. they'll send you $.03-$.25 and your code is 0325. that was invented by sanjay at paypal and the breason was because he needed to, the company needed to find a way to authenticate itsaccount. if you say you on your bank account how do i know ? if you have your routing numbers anybody who avoids the check can do that. he figures out what if we do what's called random deposits. he sends you to random numbers and you can authenticate and verify you are who you say you are. it was a breakthrough and help the company shift its cost curve dependency and it's something that even today is ubiquitous. i found somebody sent to me

watching sanjay navigate the financial system was like watching a conductor conduct a sympathy 70 which is the most amazing thing to say about what is really the financials, if you don't have the word finance attached to it but i found them to be uncannily thoughtful and have this breakthrough innovation. i was searching for the person who was closest to the action, not the person whose name was in the paper. you never know if these things are going to work but i will say the story is packed with those kind of people. it's not an accident that all these people have gone on to do many amazing things in their post paypal life because person after person made these contributions. it's actually why i write. you can't tell the story of one or two or even three people. >> definitely. going back to the talents question, there's so many

people in this book are just known in the valley as being the bestjudges of character , of talent. they can acquire talent very well. nethey recruit fortheir companies . one of the differentiators of a great ceo is how great they bare at recruiting and one of the things that strikes me is we don't talk about elon as a great recruiter but a lot of the people in this book were recruited by chelon so what was his approach to recruiting talent? was it surprising that he lowas the one recruiting a lot of the great characters? >> i'm glad you mentioned it because it's one of the things written out of the history . he has like a few of the others in the story but i'm putting the spotlight on him. he has an incredible i for engineering talent, product talent and business talent. he recruits any, he recruits sanjay, the one who runs

sequoia a capital. he tries not once but twice to bring him on board. and rejecting both times until the third time when he was having a personal financial crisis and said can i come in turn for you. he has this ti for the best people around. here's the other thing that makes him think a particularly effective recruiter is he's relentless and moves very quickly until he closes in on somebody who's interested or somebody wants . so to go back to the example, he was connected through email. and he says great, i'll come down and see you. and he says no, i'll hget you to come tonight. so he flies. they have 10 minutes of dinner at some hamburgerjoint . he's darts at eight, they don't stop talking until 4:00 inthe morning and at four

elon says can you come in at seven and get your offer letterletter . again and again he would make offers on the spot . he could sense this quality of somebody who was going to be a good fit for his team but just the person to have on the team in general and one of the things i hope the fbook corrects is you see peter max get a lot of credit pfor the people they recruit, i don't think elon has gotten i equal credit but some of the people who made the place tech and make it successful. part of what i noticed wasn't very keen eye for talent. i don't think it's something that's written up because there's so many, whenyou nthink as an element to dry subject . but it's one of the things that came through in thestory is how many people , the other part is he paints an inspiring portrait of what it can be and thatrecruits, that also encourages these people to sign up . >> absolutely. let's talk about fraud, a huge portion of the story,

you develop a number of chapters in the book. whydoes it matter and then how did you approach it in 'the book ? >> so it's one of the many i what i would think of as i wouldn't say untold but ' undercooked stories. that's been in the culture. paypal is not the only naming system on the block in 1999. there are many others. there are early crypto currencies, digital coins, mobile wallets, digital banks . one of the things you have to ask yourself if you're writing this from an outsider, is why did they succeed while others fail often mark one of the big reasons is wpaypal was successfully defeating digital and online fraud. a time when digital and online fraud was just starting and was sort of the wild west . there was an established case law on how you deal with these things to what happens is you have a successful payment platform. millions of people start to use the platform including

bad actors. some of these are just college students are like using paypal to get bonus incentives to get their money. that's like fraud you can manage but more sophisticated fraudsters do,from abroad , from next soviet satellite states, you have packing groups based in the united states and abroad that are using paypal . fraudster who created a website that's paypai and would do users into giving away their financial information . you had fraud of all kinds. in 2000 fraud is burning up the company's balance sheet. they have $1.60 million in the bank and their burning between 11 and $15 million a month.

you have to figure out how to fix this. it isn't one fix. it's multiple fixes. it involves human beings who arefraud fighters, many of you in every interview . like star wars figures, their incredible. it's digital fixes. paypal is where the catch-up is invented. it's also working with law enforcement to educate us attorneys, district attorneys and others about what does online fraud even look like? after 9/11 the government turns to paypal to understand terrorist networks. all of this is the thing that in some ways tohave killed the company in the year 2000 . it is also the thing that is their nasignature breakthrough. like,. it's the reason the companies survive where others fail and kenny miller who was responsible for some of these technologies and organizational ballots, he said fraudsters are kind of lazy as we got better at fraud fighting , they just moved to

our competitors who work as pegood and we would clean them out. they had this weird competitive advantage that came from defeating the fraudsters . >> that's incredible. now one of the things going back to just how much detail is inthis book , as a historian, as someone who often is used to goingback to hunt ries you have to down people who still have emails, who still are willing to open up . i would love to hear about yourprocess . how are you able to get this level of detail and convinced a lot of the characters in the book to share some of these really personal otanecdotes and personal facts that were happening in the company that may or may not make people look back favorably. >> i think there's a few answers to the question. the onething that i benefited from is the story is 20 years old . paypal goes public and this

year is the 20th anniversary of the ipo. when duke two decades have passed and all these people are not involved in the day-to-day creation of the company there more open for more stories and reminiscing. you didn't have to push as hard to get answers to questions. one of the funny things is how many of them made fun of me that i was interested in this topic. they would give me grief for something that happened 20 years ago and in the back of my mind i said no wonder you think like i'm curious about thinking about the past. that was part of it because 20 years have passed. they were happy to chat but i would say just there were two other pieces that were helpful and one was i did have the good fortune of having on the people who shared emails. i don't know why they kept these notes and board minutes and various phone limits and things like that but they said this could be helpful to you and it was.it gave me the ability to see not what

someone remembered through the haze of time but what someone wrote to the company in the moment. so i hope you get the immediacy of salt and pepper being played across the speakers. i hope people can see jokes about napster and the mighty morphing power rangers and the things that are relics from the 1990s it was all what i was seeing when i was writing these notes as documents. the last thing is the future of having phone records is i could try sto contact several hundred people over the course of 5 and a half years so what i would do is i would do a color coding system and try everyone's ulrespectfully but i would try everyone and i kind of made my way through. there were people i interviewed, i was with the company for two weeks. there was somebody who was there for three months. there were other people there for the entirety of the period at the company was from 1998 to 2002. interviewed board members. a lot of this was just shoe leather.

it was the belief that if you send a cold email one will respond and i had enough of those peoplerespond and very eager to talk and share memories . so i think part of it waswork and a lot of it was locked and timing . i also think i was like living as you know all too well because it was all we would talk about, living in the 1990s for fiveand half years where i wouldn't read any news . and then i woke up and doctor dre is doing the super bowl. i was like, this is great. everyone is where i was. w >> is come full circle. >> before we happen to audience q&a i want and i hope you're okay and here because it's such amoving part of the book . i want to make you tell the story but i do want you to tell the story because it's tso impactful . you and the book basically in y a prison and maybe you can tell us a little about how you found this, these people,

this story and how it ends this way. >> it's the most surprising thing to me inlooking back at it even . so i struggled with how to end this book as katie knows. this is the thing that kept me up at night. you could sort of floats into the paypal mafia motif which is the name given to a handful of these people in 2007. it was a fortune magazine cover story all the paypal mafia and famously dressed up in mafia regalia but it's not like that's not being done today. there itwas a weightless stroke . everyone had seen it t. then i started looking abroad and i said where else can i find and abroad is actually a term that meant something different and here's what it meant. when the company hasa success in kenya , its founders writes explicitly about wanting to now after their success build the paypal

mafia of east africa. in canada it was work brain, in europe it was bonzo. there's tons of references to the foot car mafia. that could be interesting, what could emerge in this ecosystem of technology? then i learned a young man named chris wilson who was a friend of mine had studied and thought about the paypal mafia while he was incarcerated for murder one in the constant institution in just maryland. and i knew chris because i had been just as a friend helping him on the book he had written. i had no idea about his interest in the paypal mafia and it went way beyond. i thought i knew a little bit about them but he had actually talked effectively the book i was writing, he talks the story in present in a series of entrepreneurial workshops.

he and his colleague stephen edwards managed to get a copy of that 2007 fortune magazine article. they became captivated by it. captivated by the story of elon and peter and read and what they started doing was any publication they would find articles about this he group and assemble a packet and photocopy the packet and teach entrepreneurial workshops inside this .aximum-security facility this just blew my mind. at first i thought himaybe this is tupac. no, , when i interviewed both of them at great length i recognize all these lessons and learnings and astonishingly both of them managed to earn their freedom. today they both runbusinesses . in fact steve is a software entrepreneur. he's helping cities do logistics for testing and chris wilson, his book debuted on trevor noah and

he's a globetrotting artist and the cells real estate businesses and has a successful, he's a very successful artist and he's doing allkinds of other things . they found inspiration in this. it was a place where their thoughts about it frankly went way beyond where i have thought about it. what they drew from the story in prison was interesting to me so i hoped it would be interesting to readers. >> it's just a remarkable story and it shows we always talk about the impact of the paypal mafia on technology but on normalpeople's lives to is reallypowerful . i want to turn to audience questions . we had one. are any of the founders still involved in any way inthe companies ? >> i can't whether they are of the company but none of the original founders are involved operationally with paypal. 'paypal is a different company now than it was.

in some ways it's achieved the scale its founders had hoped. it's funny, the question leads into another which is the afterlife of thecompany , in 2002 they go public, their acquired by ebay and in 2015 they go public again and now it's many times larger than ebay, the placewhere it first found success but so far as i know , none of them. i can say with some confidence none of them are actively involved at all with the company itself rather i can't that, it didn't come up in conversation . i think in the same way they kind of gave me some grief for beinginterested , paypal is a distant part of their past. he started off in a not great way for an author looking to spend time and get to know him. he says i don't want to be just a person who created paypal 15 years ago. that can't be my legacy. so i think in a way it's like this thing all credit with so

much but they also all are trying to escape in some way. >> of us want to forget who we were. that's soit so impactful. another question, are the foundersfriendly with each other now ? >> it depends on how you definefounders . and how you define friendly. so far as i know, i found everyone is somewhat still in lose touchwith each other. they got a few reunions . we had one little thing, my stdefinition of founders is broader than just maine cofounders on some investment document . if people look at the book cover lc faces and names they've never seen. they might see people they never heard of. thi want to expand the definition of founders to include anybody who's had this intense period of htfounding a company that might not be legally the definition of founders i do, i will

defend that editorial choice. these people went through this very bruising difficult experience together and or blood sweat and tears into the company.hs some credit david sachs as one of the people who defined the product vision, he's not technically a cofounder of people would put him in that group . i found that there were certain friendships that i dithink mature and develop more differently than others. there always bonded, these people are tied hto this experience and they have invested and worked with one another so jeremy solomon yelled together, the two founders of youtube works together and the number of people at a firm our alumni from paypal, there were people who joined elon at tesla and space x. but for the most part what i had heard was largely positive relationships andscertainly

very strong professional times . >> certainly on the investment side there sort of if you tried to now all the investments going from peter thiel to elon and a number of his former colleagues, the s math would just be completely overwritten. if there was any sort of non-friendliness, they're working together on those things. >> i think the rivalry that people might be interested in the most or i think it's been may be made into something it isn't is there some fiction about elon and peter not liking each other and i don't the truth of it and i never asked them about it but the day i interviewed elon his dinner guests that night was peter omthiel. i'm not sure if you have him for dinner if you didn't like him. i think that blows up the

idea that they don't get along. there, investing, he's inside his book 01. youdon't have people over for h dinner if you don't get along with them . one little kernel on this which is these people operating in rare errors intellectually. there's a kind of i think fellow feeling that emerges from having done paypal together but it's a set of interests in science and engineering and math that go deep. >> .. and help you think about the ideas in the book. he's not in anecdote person. we would talk about ideas about technology, about teambuilding, he had a h lengthy meditation about what it's like to hire his friend. what happens when a friend becomes your subordinate?

it was things like that but with multiple chats. he is one of the come basically the employee two, ceo of the company when it goes public. i ii have multiple interactions with him for the book. >> i know m we only have a few minutes left. my last question, what did you first learn about silicon valley? there's misconceptions for outsiders and how the ecosystem works come all these crazy people thinking about the future. what did you learn about how the system worksd and how the ecosystem works and what surprised you most about it? >> it's a great question and i think it's one of, i think in five years i'll have a better answer potentially. i'll offer two the jump jump in mind to me. one is silicon valley is unusually tolerant of people who are on the fringes are misfits

in other parts of society. there is a high degree of openness to people who might not communicate with perfectke english, who might not dress like in a way that would be acceptable like within mckinsey & company job who have ideas about everything from life extension to space travel. that is embraced. that level of unorthodox thinking is embraced in this place. i know there are some ideas about that but i found it very vividly in my discussion with these people when those topics would come up all the time. in a perfectly normal, if you and i were talking about the weather, how would you live to be 150, right? like it was par for the course. i don't know there are other places in american life that embrace that kind of like just truly like heterodox thinking. i found it l really encouraging there i was like good, someone should be stirring the pot.

that's great. the second thing i found interesting was as a writer, and you know this from your time in journalism, when you can find the perfect word for for a h like a pro the closing sentence or something gets together, it's a thrill, a complete thrill. it's not a thrill to a lot of non-writers to understand c because writing is just homework for other people. you and i chose lies, basically do homework for years and years and years. writing code has a lot in common with writing, meaning i found in some of these engineers that same satisfaction when the one thing fits in the essay and it' all works. that rule is real. it's easy to miss it when you press a button on your phone and something works or when you type an address in the google maps and it works exactly like it's supposed to. it's very easyhe to miss like months of labor and satisfaction and joy that actually are

underneath those things. like we had this really distant relationship. our phones are pretty sleek andr apps are pretty sweet. someone had to do all of that. i found it speaking to the engineers that was a real pride of craft and a real joy about when something fit right into place, and the only way i knew to describe it was like writers haveye the same joy. >> i think that makes it -- you're either a mask coder engineer a reader or writer or literary hound. actually there's a lot worse synergy that we happen to think thatda our spy kickoff with a quote for that reason because some of her meditations have literary quality. i found that in the people i interviewed. >> with that thank you so much for joining the conversation. again the new book is "the founders." we would like to thank our

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