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From the driver's seat of a sleek, 627-horsepower McLaren F1, venture entrepreneur Peter Thiel enquired, "So what can this thing do?".
“Watch this,” Elon Musk replied.
Musk, then 28, sold his first company for $22 million in March 2000. It was one year after that. He'd spent $1 million on the silver sports car, then pumped most of the rest into a huge business plan: X.com, an internet-based megabank that he thought could change the world's money system.
It was a company led by Thiel that stopped him from making his plans. The two were about to talk about a "shotgun marriage" merger that would stop them from fighting. Musk had given Thiel a lift. Jimmy Soni, author of "The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley," told him that he "didn't really know how to drive the car." The book is out now.
Musk fired up the McLaren's gold-plated engine, and it didn't work. The force was too much for him. Spin out: The car hit an embankment, flew through the air and smashed into the side of the road. Glass shattered, tires burst, and the suspension of the car broke.
Because PayPal is a huge company that changed how people buy things online, it could have been wiped out before it even started. The crash could have killed both of the men and also killed PayPal before it even started.
Even though Thiel and Musk were hurt, it turns out that they were not hurt. They cleaned themselves up, put out their thumbs, and hitched a ride to change the history of the internet.
He tells the story of PayPal from when it was a simple bill-dividing app for the PalmPilot, a device that was popular in Silicon Valley before there were smart phones. In "The Founders," Soni tells the story of how PayPal came to be. Max Levchin, a 24-year-old computer programmer, came up with the idea for the app. He and Peter Thiel, who was 32 at the time, had a lot of "ultra-nerd dates," where they spent hours competing with each other on brain teasers and math problems in bookstores.
When the financier and the engineer started Confinity, the geeks fell in love with Levchin's PayPal app, which let PalmPilot users send money to each other if their devices were in the same room. Confinity was a big hit.
When it came out, it was a lot of technology for its time. After that, Levchin added an extra feature to PayPal's website: email-based payment.
Buyers and sellers on eBay quickly jumped on board. After PayPal was launched in November 1999, more than a million people used the service in less than a year.
However, X.com, which is owned by billionaire Elon Musk, was also trying to get eBay users to sign up with big sign-up bonuses that Confinity couldn't match. Musk: "It was a race to see who could run out of money the fastest."
Afterward, in the spring of 2000, the exhausted competitors agreed to merge under the X.com name, which is what they called each other at first. But the merger didn't work out well at all. His ultimate goal of taking over the world's financial markets didn't change. He still saw PayPal as a way to get there.
As the CEO of the new company, Musk insisted that the X.com brand was the most important, even though customers didn't like it, focus groups found. This kept coming up over and over again: “Oh God. I wouldn't trust this.” This was Vivien Go, a PayPal marketing exec. I said, "It's a site for adults." Musk told PayPal to change its name to "X-PayPal."
Then, Musk told PayPal's code to be thrown away and replaced with a new codebase that would work with X.com's architecture. This is how it worked: That was bad news for Levchin, because his PayPal code was full of weird things that had his fingerprints on them. Lines known as "Max code" are what everyone calls them.
When Levchin was in despair, he thought, "This is just killing my will to live."
Musk later said that he didn't fully understand the emotional part.
The angry Levchin staged a coup. When Musk went to Australia for a long-delayed honeymoon, Levchin called on Thiel and other allies on the X.com board of directors to get rid of Musk as CEO.
Musk said in 2019: "Sneaky backstabbing bastards." Soni, who is writing this, thinks it's a joke. Too afraid to stab me in the front.
Musk kept his stake in PayPal and made a lot of money when the company went public in 2002. When his company went public, he made a lot of money. That money helped him start SpaceX.
When Thiel and Musk first met, they had a car accident that led to their success. Thiel even made fun of the accident.
"I had a liftoff with Elon, but not in a rocket."