• PayPal was a mess we I joined, but we had potential. Peter came back and turned things around. We went public, then sold the company. Not bad for two years.
  • I was a little nervous about that, but on the other hand, PayPal had been in the Wall Street Journal, and it had 4.5 million users, which is a decent number. And if you did a brand survey at the time, it was like the eighth most popular brand on the internet. Like, Google was at the time at number four. This is a long time ago. So no one was obviously going to be successful at all. I mean, the company was literally changing CEOs every six months, which is usually a proxy for a mess. But anyway, when Peter came back, he started fixing things, and we went from very unprofitable to profitable. We filed a public offering (the RS1 to go public) the day after 9/11. We end up trading and going public in February of 2002, which is one of only three technology-oriented companies that went public that year, Netflix being one of the others. And then we sold the company. So in like two years, we went from a complete mess to an IPO acquisition.
• After the dot-com bubble burst, many people thought the consumer internet was dead. But a few of us, like Peter Thiel and Reid Hoffman, believed in the future of the consumer internet. We started investing in startups, and some of them turned out to be successful. We were lucky to be at the front of the wave.
  • After dot com, everyone thought the consumer internet world was dead and done. It's hard to describe how much of a nuclear winter there was in the Bay Area. People thought technology was dead, especially consumer applications and products. There was no future for them.
  • Unfortunately or fortunately, a few of us disagreed. Peter Thiel and Reid Hoffman really believed that there was a future for the consumer internet. So they started investing in these crazy startups. There was really no one else giving entrepreneurs money at the time. Every entrepreneur with a consumer idea would go to Peter and Reid and ask for money.
  • Fortunately for Thiel and Hoffman, it turned out that some of these ideas were actually decent. Some of them were potentially interesting ideas that crashed and burned, like Friendster. But there was another wave, and being at the front of the wave was a really good investment or entrepreneurial decision.
• My experience with business and regulation helped navigating the gray area and keep PayPal from being killed by big companies like Mastercard and Visa. I also had to learn a lot about corporate strategy and development.
  • It was mostly the intersection of business and regulatory problems. I'd been a lawyer and involved in politics, and a lot of payments intersect with all kinds of regulation. You're just kind of trying to steer around it and navigate the gray area, and trying to quarterback that stuff and keep all these evil companies like Mastercard, Visa, and eBay from killing us. And using law and regulations as part of that process was sort of my real skill set at the time. And then it broadened over the last 15 years, but that's what everybody wanted. So I had like 17 lobbyists, like full-time, really busying DC both offensively and defensively. The Patriot Act had just been passed, and at one point the Treasury Department wanted us to collect a Social Security number from every buyer, which is insane. It would have really killed us to stop that. A lot of these kinds of problems, and then learning to do corporate strategy and development, and a whole bunch of other stuff.
• Elon tried to recruit me to come down to LA to help do the regulatory stuff for SpaceX.
  • Elon tried to recruit me to come down to LA to help do the regulatory stuff for SpaceX, which is obviously going to have lots of regulatory complexity. I didn't really want to move to LA (I don't know if he might hear this). But anyone who's interested, I end up getting involved in a while bunch of cool new companies, including LinkedIn.
• LinkedIn didn’t look like a rocket ship and grew actually fairly linearly. A year after launch we had 1.5M users but we were the only professional database that existed for normal people.
  • LinkedIn didn't look like a rocket ship at the time either. It grew actually fairly linearly. I mean, a year and a half after launch, it only had 1.5 million users, which for a social product (a viral product) is very low. But it was always growing, it just wasn't growing exponentially. It had a monopoly characteristic, which is that it was the only professional database that existed for normal people, and that's obviously very valuable. And so it's becoming an incredibly important company, but it wasn't totally obvious either when I invested or when I joined the company that it was going to be like massively valuable.
• You need to find people who are undiscovered yet and be able to do that at scale if you're going to build a company from scratch. Once you get enough momentum and you're one of the top 10 companies in the valley, you can recruit people with established credentials.
  • Everybody running a startup wants to recruit people who are super talented, but you're not going to be able to recruit all the people who have established themselves and have already accomplished things. There are other companies trying to recruit the same people. So the part of the art—and this is the thing Peter actually taught me at PayPal—is how do you find people who are undiscovered yet? And you have to be able to do that at scale if you're going to build a company from scratch. Once you get enough momentum and you're one of the top 10 companies in the valley, you can recruit people with established credentials. But you've got to get there without that.
• When you're in the building, it's a lot easier to look around the building and figure out who's really good at something that people don't always notice, and then recruit them to your team and then make the team look really good.
  • So what I started to do is to recruit individuals from within the company that I knew were stars, and that maybe were underappreciated. Because that's a lot easier task. Like when you're in the building, it's a lot easier to look around the building and figure out who's really good at something that people don't always notice, and then recruit them to your team and then make the team look really good. And so that was the first technique, was like figuring out people I was already working with who were going to be particularly good. Which is also what led to a lot of the good investments, was a lot of these people started companies, and I was like a little talent scout.
• Almost all the best people I've hired went to fairly random universities, with no technical backgrounds, that had never worked in the startup world before. A little bit like drafting athletes, though you're going to be wrong a fair amount of time. It's not zero defects.
  • Then over time, I got better at figuring out what was the common denominator of those people, and trying to project that in interviews. I'll tell you, almost all the best people I've hired went to fairly random universities, with no technical backgrounds, that had never worked in the startup world before, and they're all like 21 to 23. So it's a little bit like drafting athletes, though you're going to be wrong a fair amount of time. Like, you know, first round draft picks, you hope that you're picking a future star, but you're going to be wrong. It's not zero defects. Like anybody tells you, zero defects isn't hiring fast enough.
• The single best blog post on recruiting for a people-first startup is “Relentlessly Resourceful” by Paul Graham.
  • The best blog post is what Paul Graham wrote, called "Relentlessly Resourceful". I think that's the single best blog post on recruiting for a people-first startup. I think there are other characteristics, but if you have that, you can build off of that pretty well.
• Start will all your employees with mundane tasks and for people who thrive increase complexity and sophistication of task over time. This way you can find people who build your company.
  • What you actually want to do is start with all your employees with fairly mundane tasks. Then, for the people who thrive at it, you just increase the complexity and sophistication over time. You do this every day, every week, every month, every quarter, and every year, until they show they can't handle something. This way, you can find people in pretty random places who show this propensity of getting stuff done successfully. Then, you can constantly give them more and more complicated tasks, and those are the people you build your company around.
• Instead of trying to pick a rocketship, I think you should pick your boss. I mean someone you can learn from. Assume the equity value is zero and ask yourself, "Would I learn enough and enjoy this enough that I would do this job even if the net economic benefit to me was zero?"
  • Cheryl famously talked about this advice she got from Eric Schmidt when she was considering joining Google: "If you find a rocketship, don't ask what seat just get on the rocket." I generally think that's the best career advice for people. If you find a high-growth, high-velocity startup, you want to get on board. There are always new problems to solve and you can't hire people fast enough to solve them. This means there are so many opportunities to grow. If you have any ability, you'll be thrown more and more problems until you have a great career trajectory.
  • The hard part is picking the rocketship. If you wait until things are obvious, that's a good choice. For example, it was pretty obvious that Google was going to be a rocketship to anyone who had access to their metrics. But if you go too early, it's a bad idea. The best people who do this right maybe get it right 30% of the time. That's like a Hall of Fame batting average for an investor.
  • Instead of trying to pick a rocketship, I think you should pick your boss. I mean someone you can learn from. Assume the equity value is zero and ask yourself, "Would I learn enough and enjoy this enough that I would do this job even if the net economic benefit to me was zero?" That's the best thing to do.