a general partner pleased to be here todayay to welcome jimmy to

discuss his new book the founders the story of paypal and the entrepreneurs who shaped silicon valley. it's especially wonderful toca e here. talkingrt about a group of peope who support each other and worked really hard together and haveve been lifelong friends meeting in their early 20s. it's very special for me as a fellow journalist and writer to be interviewing him because we shared that time together but jenny unpacked the long difficult journey of paypal for one of the largest in the world inho a household name and tellss of the us unsung heroes and huge challenges faced so we will be covering a lot in the next hour and encourage you to put the question in the chat on youtube. when we get into the questions later in the program.

>> thank you for having me. honestly i couldn't think of anyone better to do this with. we can tell embarrassing stories. >> one of the things when you first said you were doing this s book you are an outsider so it's jumping into a subject matter you're not of someone on the westay coast. what made you want to tell the story? >> i freely admit that but probably not the person that should be doing this. my last book was about an engineer and mathematician and in the course of doing that book

i looked at the place where he spent a big chunk of his life and bell labs in the 20th century was then renowned as an incredible of innovation. they invent touchtone dialing and satellite technology, communications networks and the transistor. it's like the place to be innovative and bell labs is incredible not from the mind of one person but a group of people. i looked at other topics like the road not taken, the semi conductor where you famously have this group somebody had written a book that covered that

kindal as well. i felt one of the best titles. i was excited about it. they are going to bail and that is so good. i just started asking questions and assumed because the personalities involved. i assume somebody had done this and the other thing i noticed was the stories were just fantastic. the untold stories were so good and i knew there was potential there so that's how i came to

it.wi i can admit i called you with the most basic questions about the terminology with the same thing applied in my last book and this book if you're an outsider who is trying to decipherd something to make an audience understand it, you have to ask basic questions and build it back up into writing. everyone thinks they know what an ipo is but if you have to go back and basics to understand it they were never going to take a gcompany public. the basicic question is an asse, not a liability. >> that's certainly the case and the commentary about the book reads like a historical book.

historians are never part of the ecosystem they dive into. in some ways it's one of the books that a lot of books are written by journalists that arec part of the ecosystem and we announce you take that objective and treated with a moment in history. >> the other thing, the other piece of it is you can ask questions that someone that has the challenging task of reporting on these people every day you can ask questions they are not allowed to ask. i admire daily journalists that have to cover. their task is so much harder than mine because i had to the enjoyable conversation, not thei antagonistic conversation. i'm not holding the probably statement to account so for example he was more than open

about it. coming out as an outsider i could ask random questions that i think were relatively engaging. >> after reading the book and thinking about it i still have the answer. people look at paypal it touches every aspect and multiple companiess in the world and as you said you were looking at the pockets of innovation and talent. there is a word for talent growing together, supporting each other. what was it about paypal.

the music producer used the word instead of genius but he was describing artistic clusters like the era and the period in place. he says when he was an art in artschool he learned that the werere solitary geniuses, revolutionaries and realized there are collectors and people underwriting the art and different venues and people in theha whole cluster supporting this particular gift. it leads you to think about the story.

with paypal you don't have that. you have at least 200 people in palo alto, several hundred more when the company goes public and you have some of the brightest and modern technology so. what happened from 1998 to 2002 no one had gone back and did a detailed look at that. inht doing that you might illuminate like here are a few of the things that made the group what it is later. it stops in late 2002. there are some common threads and things in the water in those early years that are striking to me and hopefully striking to the

readers. >> totally. you have some personalities in the book and you start the story. talk to us about why you chose toy start the story and realized though there's many personalities one of the primary protagonists. >> that is one of a the ones. you take a step back it's the merger of two companies. one is elon's company and i another is cofounded by peter. its origins are, and the reason

chapter one picks up is the mobile encryption and mobile devices. in college developed a passion like we are in a time machine now. ..'

>> and so in a way there is not a personal around him. so every time i would ask if you more questions or talk to fewer people someone who has this insane interest and a once in a generation mind. some in college as a way of getting around the requirement to write a paper for class he decided to write a paper on a film that was seven samurai. he watches it once a rice the paper but it gets into his head he spent his entire summer watching seven samurai

over and over and over we think right now he's watched a 110 times this is three and half hour black and white japanese movie. and so i just found that to him is perfectly normal but to the rest of us is what using that the rest of us don't see and i found moment after moment like this he is a near photographic memory i find a piece of paper later that spoke to it like he was a character who didn't know he was a character. his life is stuff of legend and 90 miles away from chernobyl when the reactor explodes and hurls tons of radioactive material into thest sky he is on a train going away from the disaster and on the way to the train a border

guard with that geiger counter scans his foot with sets off so they think his foot is radioactive they talked about amputating his foot they said no no take off the shoe and rescan the foot in they s do in the foot comes back clean it turns out it was a rose the warren in his shoe that sets it off. chernobyl and the aftermath shaped his life in powerful ways they secure funding from a refugee agency to come to the united states and as a sophomore in high school watches english by watching different strokes. details that were so rich and not picked over. it wanted big gigantic public life for himself. you have that as a writer.

if it hasth a photographic memory i'm kicking off with you. >> so one of the things if you're not familiar with the a tape all —- paypal story think this happened at stanford but actually it's university of illinois champagne near vona. >> it's one of the things as somebody who grew up in illinois. so stanford is a big part so to a call them the business have these come from stanford goinggi on and on you can go down the roster but the engineering for the company does cap university of illinois and

those first conversations andgh is very skeptical and said if are going to do this just please don't write university of illinois had of history and then to get context, and 1995 a company called netscape was public the founder was at the university of illinois. and for anni entire generation of engineers that is the starting gun for the internet revolution but university of illinois it is personal docs and others who were there describe it we would see them in the quad now he's on thef cover of time magazine if he can do it so can we there is a very direct link university of illinois has an amazing history of contributions to

computing some of the world's first digital computers and the earliest social l networks.a a lot of defense department funding throughout the 20th century so they could build they glance for supercomputing applications. and really talented engineers to go there. the first two he hires come out of the university of illinois. and then you have all of these people who are inspired

like square dancing and computers in the history of technology but for a young 19 -year-old elon musk he is one of the

only bosses ever so he contactsr. him and they go have lunch with doctor nicholson and he says he goes to nova scotia bank as an intern and he's joining a bank that the right part of the bank which is a team run and then they report directly to the ceo. and then that team gets to work so because it's a small team doctor nicholson and elon musk has a very close relationship and friendship and are still friends to this day. he said to me the first love was based they would t trade talk and space exploration or join a company and those that

exist for the rest of us for this mentor that helps them to think through that and he notices' right away the kid is very precocious so he gives them more challenging assignments and more demanding assignments. and it was revealing to ce then then the thinking that he applies with space logistics that were evident back then. he's a serious person and was quite clear that you just don't see in many people but one of my favorite interviewees because he was thoughtful enough to see how those early experiences may have shaped and enabled his successes and the line is one

—- elon musk a septic on the skeptical of immigration. >> so one of the things is that there were two companies with different ambitions oh tell us how they merged. >> yes. we can start with elon musk in early 1999 he is fresh off creating a company and he sold in thinking about what comes next. based in part on the banking experience what he wants ask her come to do was everything into the financial son mortgage broker your stockbroker and your checking account and transferring money if you want a wire transfer you would go to them if you want a line of credit go to

them. it was supposed to be the global financial center. but just context 1999 like most people using the internet are not using it for transactions but even then elon musk says we have thisin technology now to upgrade the mainframes that are generally written on old code and cut out all the fees. that is a revolution of finance. on the other side onty the paypal ledger you have continuity that at the time mid- 1999 focused on making off of palm pilot money when the latest iteration cannot j 1999 and had an infrared poor in the corner. just to understand i went back and read palmpilot for dummies and if you hold it too far

away you cannot communicate to close the cannot communicate. nobody comes up with the use case. what you do with it? so that you and i would be atpa lunch you send me ten dollars or take out the palmpilot and this excruciating process and this would be a thing. and in the summer of 1999 with transmission over e-mail. that's for the name paypal was born. >> and how they come up with the name so then where you feelt there are places totally at scene i was an outsider in

the world of code so i read a lot of papers about mobile encryption just to understand and the academic papers that was a really great paper i wasn't really on solid ground but where iin could be is with word so where did the name paypal come from that they shared with me they recognize like to on infinity it's not the right name for financial services he goes into his web browser naming.com it pulled up master mcneil it was founded by the firm that comes up withk the name paypal. so she had a whole long process when she contracts of the company to create a

product or service she goes through hundreds of names, interviews the teamm members to understand the history of the company her claim to fame the trackpad on your let pat one —- laptop. westin hotels, and her fondest memory is paypal. but i was fortunate in the slides that advocated for paypal. and they are very specific and then they come up with names of a purely creative process to see what sticks and she

says no this is a crucial business decision with a harvard mba and then a background in literature so it's a venn diagram where words in business meet. it's friendly sounding your pal is more and your friend is a warm relationship it's a warmer definition and image. they create closeness that makes you remember the name there is some linguistics research and then you have this change later but the p-uppercase-letter l-lowercase-letter and the y-lowercase-letter which is a descender that is visuallyha symmetrical we never could find the origin but at some

point they capitalize the middle ostp. and then to say the only thing i can find is this little note that says choose paypal at the p-uppercase-letter. it was the work of master and her team to really thinking through diligently how we make this process between palm pilots more inviting to people? >> and certainly what is interestingf to talk about the p name of startups is so important ass an investor paypal is friendly but something like uber has that wmenacing tone was languages so in some ways is interesting to see that story may have carried on with many off the

investors. >> and in other settings to mention he always thought paypal was friendlier and we thought facebook was more genial than myspace. or the uplifting quality over uber and i like the etymology of how things come to be. this was interesting. also that in spite of all the talent in this room at the time it was so backwards that they had to advocate for paypal the team did not want it initially people in the room said it's a terrible idea nobody will trust your money

but then one year later they said we were wrong. >> and it's nice he didn't get the name back so it all comes full circle. >> and then he purchased it from paypal corporate some years ago and it's the end of one of the final scenes of the book is him reacquiring that it is restored to the rightful owner. >> what you got so much praise for is it wasn't just talking to the famous names. you can get throws the e-mails. so talk to us about the lesser-known figures and other impacted your part of the story and the story itself.

>> i'm glad people have picked up on it. i had a few the most interesting stuff tends not to happen in the boardroom or in this week. and with that micro creation and ideas that you will get the richest material or reflection are stories that are never told and when we started at the beginning of the story, it's easy to get seduced with the idea of the personalities of the reallyse well-known people that drove the company forward but time and again they would come back to me and say you should you talk to this person or to amy because she when the product team were she is the designer. so i hear names and then reach

out. and then consciously want to tie these together because people have never been spoken to it so easy to reach out for those of never been contacted by a writer and then to have their guard up i tried to win trust it takes years i fill out questionnaires and take the redeye flight that part of what happened is i found a series of characters that are novelistic but they don't know that they are. and one of those examples for me is the gentle man names on j. he is not a household name hein

is hired very early on and is a brilliant mind working financial services for a longco time at that point with the failed startup. one of the signature contributions that he makes is osomething almost all of us listening and watching have used before. if you had to register your bank o account with another institution, you probably gone through the experience three cents and 25 cents and you are coded 0325 that was invented by him at paypal because the company needed to find a way to authenticate so how do i really know unless you can access it anybody can avoid a check so what if it's random deposit and then you can

authenticate and verify you are who you say you are it helps the company shift the cost curve and something that even today's ubiquitous and then the most amazing. watching him navigate the financial system like a conductor conduct a symphony. then to be uncommonly thoughtful with this innovation and searching for the person who is closest to the action not the person whose name is in the paper. you never know if these will work and they were packed to the brim with those people is not an accident that they go on to do amazing things in post paypal life because person after person was s

usually consequential which is why i write you cannot tell the story of paypal. >> going back to the talent question there are so manyt people that are just known in the valley as the best judges of talent and they recruit foro their companies one of the differentiators what is appraising in the book is we don't talk about elon musk is a great recruiter so i would love to hear what is the approach to recruiting talent is that the way he was recruiting allied of the it's went out of the history and like a few of the others putting a spotlight on him he

has an incredible eye for engineering talents andit business talent and recruits those who run sequoia capital. and have a personal financial crisis. can i come in turn for you?hi and then for the best people around. and then to move very quickly until he closes somebody who is interested. and then to say i will see you. and he says you have to come tonight so he flies and spends

ten minutes at dinner at a hamburger joint they'll stop talking until 4:00 o'clockk a.m. elon musk says come in att. 7:00 o'clock a.m. and get your offer later on —- i-letter like to make you an offer. ooagain and again he makes offers on the spot and can sense the quality of somebody who will be a good fit for his team and a good person to have on the team in general. and then don't think elon has gotten equal credit. and with his very kenai for talent so that definitely came through so how many people that paints this inspiring

portrait of what that can be. >> so is talk about fraud. and why does that matter and how do you approach that in the book? >> i would not say and told but paypal is not the only payment system onrr the block in 1999 there are many others there are cryptocurrencies and digital queens and digital a banks so one of the things you have to ask yourself when writing this self writing yourself is why one of the bay reasons is it would defeat online fried went was just

starting it wasn't established case law's you have a successful form of paypal and millions start to use it including bad actors those that are using it with the bonus incentives to get there many but more sophisticated fraudsters from abroad and hacking groups and abroad and the fraudster who created a website that created it called payat by because it is a copycat site that looks exactly the same that would have people give away their financial information.

and they are burning through 11 and $13 million a month than they have to figure out how to fix it it's not one fix its multiple sixes with human beings many of whom i interviewed was star wars figures are incredible so all of you who are annoyed by fire hydrants. [laughter] and working with law enforcement to educate us attorneys and district attorneys what does that look like? after 9/11 the government turns to terrorist financing and it ought to have killed the company in the year 2000 and also the signature breakthrough. period the reason the company survived when others failed

and one of those who are responsible for that owtechnology is saying that fraudsters are lazy as we got better they would just moved to the competitors who were not as good so there was a weird competitive from defeating the fraudsters. >> incredible. going back to how much detail is in the book, as a historian of contemporary history for those are willing to open up so how are you able to get this level of detail to get those characters to share the facts in the company that may or may not people is that favorable? >> there's a few answers to

the question the one that i benefited from the story is 20 years old. and i' goes public. and then a little bit more open and reminiscing. and then one of the things is how many make fun of me i'm interested in this topic? and then about the future. that was. part of it. twenty years have passed they were happy to chat but there were two other pieces that were helpful. i did have the good fortune of having a number of people and why they kept the notes and

documents but they did and said this could be helpful and it was. he gave me the ability to say at the moment. and that they people can see. and that word diligently like to contact several hundred people over the course of five and half years. and then i just made my way through. people interviewed and with the company for a couple of weeks are there for three

months and then i interviewed board members. a lot of this was shoe leather in the belief maybe if you send a cold e-mail somebody will respond i had enough of those respond and very eager to talk and share memories. part of that was like and timing and i also think that i was living as you know in the 19 nineties for five and a half years and i tried to stay there. then i woke up and then the 19 nineties are cool again. [laughter] >>he and in some way not to make you tell the story but it is

so impactful because you inay the book with the book basically in a prison and tell us how you found the people in the story and how it and this way. >> itt is the most surprising thing to me looking back. so i struggled with how to end the book as you know what kept me up at night because you could flow into the paypal mafia motif and a "fortune" magazine cover story called the paypal mafia. but something thatt was there and then i started to look abroad and that actually meant

something different so when the company has success in kenya the founders right explicitly about want to build the paypal mafia of east africa.e. so that could be interesting so what could emerge of that ecosystem? but then i learned a young man named chris wilson and study and thought about the paypal mafia while incarcerated for murder one in the institution in maryland. i knew chris as a friend i was helping him and i had no idea about his interest in the

paypal mafia and it went way beyond what i thought. i thought maybe he knew ang little bit but actually the book that i was writing he taught that paypal story in prison and entrepreneurial workshops he and his cellmates managed to get a copy of the fortune article and they became captivated by the stories. and then to find articles about this group and then assemble packets and then to. ♪♪ and print aerial workshops in the maximum-security facility. so interviewed both of them are great links to take all of these lessons and learning from the story and astonishingly both of them managed to earn their freedom today they both run businesses one is a software

entrepreneur. and then helping to do logistics for covid-19 testing and then his book on trevor noah and a globetrotting artist. and then to find inspiration and then what is interesting to me i it is interesting to readers. >> so we always talk about the paypal mafia. >> i cannot speak to

shareholders of the company that none of the original are operationally with paypal it's a very different company now and then to achieve the scale but it's funny because the question is the afterlife of the company in 2000 do they go public hundred 2015 they go public again and today it's many times larger than ebayno were first found success so as far as i know none of them are actively involved with the company itself shareholders i cannot speak to that but in the same way that they give me some grief for being interested and in my first conversation to start off in a not great way i just want to

be the person who created paypal 15 years ago that cannot be my legacy. [laughter] and what they all credit so much but they'll try to escape in some way. >> we all want to forget where we world. so are they with each other now? and in all seriousness and to be have a few reunions. but it is broader than named cofounders on an investment document.

and then this very intense and legally that may not be the definition but as people went through this difficult experience together and that blood sweat and tears into the company. those that refine the product and is not technically a cofounder but i found there were certain friendships that matured and developed differently than others they are always bonded to this experience so the three cofounders of youtube and a number of people or the alumni from paypal joining tesla and

space x depends on which friendships you're talking about but to be largely positive relationships and certainly very strong professional ties. >> so if you try to map all of the investments and then to invest in the former colleagues than the map would be completely overridden. and then the rivalry the most with elon musk and peter not liking each other i don't know the truth of it i never asked but the day i interviewed elon musk that night it was peter.

so i need someone to blow up the idea that they don't get along they are co- invested with each other. and again if you have people over for dinner. and so there is a feeling from doing paypal together but that interestin of technology of science and engineering and math but i saw a lot of positive interaction. >> any may have answered this. >> several times. he was a great interlocutor he is not an anecdote person like

technology or teambuilding the lengthy meditation. and what happens when your friend becomes your subordinate. and with the employee and the ceo of the company and with multiple interactions. >> we only have a few minutes left so w my last question is what did you personally learn about silicon valley there is misconceptions of how the ecosystem works and the crazy people looking about the future but how the system works in the ecosystem works and what surprise you the most? >> it's a great question and in five years i will have a better answer potentially.

but one, silicon valley is unusually tolerant of people who are on the fringes of other parts of society. there is a high degree of openness to people who may not communicate with perfect english who may not dress that word be acceptable and have ideas from everything of light extension to space travel. that level of an orthodox thinking is embraced. i know there are some ideas about that but i found it very vividly in my discussions when those topics would come up all the time but it's perfectly normal talking about how we can live to be 150 it was par for the course i don't know

there's other places in american life that embrace the true the heterodox thinking and then the second thing i found interesting is as a writer in journalism when you can find the perfect word for a paragraph or a closing sentence, it is a thrill fcompletely is not a thrill non- writers understand and you and i chose this but writing code has a lot in common so i found that same satisfaction and then that thrill is real and it's easy to miss it when you press a button on your phone and when

you type in the address and google maps it's very easy to mess with months of labor and satisfaction and joy we have a distant relationship these are not hot rods. somebody has to do that and in speaking to the engineers of something and that writers have the same. >> and that makes sense and with that dichotomy you are a mast person or an engineer or a writer and literary hound there's a lot more synergies. >> i kick off a book for that reason because the earliest

computing as a literary quality. >> thank you for joining the conversation the new book is the founders. o thank you to the audience and if you like to watch more programs please visit commonwealth club.oregon thank you again for joining us today. >> it was a great advantage know what it was like both for a governor but also presidents of that was very helpful to me. >> i am very much a person who

believes that say what you mean and mean what you say and take the consequences.

>> m class of 2017 and the author franchise so before wens start a few housekeeping notes. if you have questions please submit them at the q&a function at the bottom of your screen we will get to that during the second half of the event mostd importantly money is available for purchase so just click by the book and it's a pleasure to introduce my classmate as well as my colleague