Booktv. Org slash afterwards. My name is catherine boyle, and im a general general partner and andreessen horowitz. Im pleased to be here today to welcome author jimmy sony to discuss his new book the founders the story of paypal and the entrepreneurs who shape Silicon Valley and its especially wonderful to be here because i knew jimmy in my early 20s, and this book really takes place talking about a group of people who supporting each other and worked really hard together and have been lifelong Friends Meeting after College Meeting in their early 20s, so its very special for me as a former fellow journalist and writer to be interviewing him because because we shared that time together as well, but in the founders jimmy unpacks the long and difficult journey of paypal from a barely known startup to one of the Largest Tech Companies in the world and a household name and it he tells us the Unsung Heroes extreme competition. It and huge challenges faced by the company as it fought to implement cashless currency back when few dare to try. So well be covering a lot in the next hour and we encourage you to put the questions in the chat on youtube. Wed love to solicit some audience questions at the end. So well be getting to your questions later in the program. But for now welcome jimmy. Well, thank you gary. Thank you for for having me and i honestly like i couldnt i couldnt think of anyone better to do this with because weve known each other now for well over a decade and you know, itll make it more fun and we can tell embarrassing stories as well as stories about the founders. Oh, no, and whats great is you know . We first said you were to valley. So it was really sort of jumping into a subject matter that you hadnt necessarily addressed before you. You know, youre youre not someone on the west coast. Youre not a tech journalist. What made you want to tell the story of paypal . Yeah, its it was it was the cutest right . So i sort of freely admit that actually in the introduction. I kind of write that id like probably not the person who should be doing this id always sort of joke with my friends. It was like really like walter i should just hands project walter isaacson. Like this is a walter book. Um, my last book was about an engineer and mathematician named Claude Shannon and in the course of doing that book, which is called a mind of play. I looked at the place where he was we spent a big chunk of his professional life, which was bell laboratories and bell labs in the 20th century is is in today and then was renowned as this just incredible hub of innovation. They invent touch tone dialing they invent the laser they invent Satellite TechnologyCommunications Networks and the transistor they win several nobel prizes. Its basically like the place to be innovative in the 20th century in the United States in technology and bell labs is an incredible. Thats not from the mind. One person its from a group of people. So i started thinking like what are other groups in American History where its been that fertile and that kind of rich and and livening and i actually i looked at other topics like i the one the roads not taken were Fairchild Semiconductor where you you famously have this group. Somebody had written the book. There was a book about xerox park that covered that kind of cluster as well. I think the book was called where the wizards stay up late, which was i always thought one of the best titles for a book about this and then then theres general magic and general magic like i got i was excited about it. But then this incredible documentary came out and it was sort of like no asking the answer like theyre gonna they own that its so good and everyone should see it. I paypal was a i stumble they sort of went forward in the history stumbled into it and i just started asking questions. I sort of assumed that because the personalities involved elon musk read hoffman the founders of Youtube Peter thiel max legend david sachs, and this is a like the avengers right . I assumed somebody had done this and then when no one had the other thing that i noticed is i asked even a few questions was that the stories were just fantastic like the Untold Stories were so good. And i knew there was potential there. And so thats thats how i came to it. But i most definitely came to it as an outsider, you know, because youre my friend i can like admit like i had called you with like the most basic questions right about like well, what is it was free money and like what, you know, its like terminology, but but i will say that the virtue of actually being an outsider. I found that the same thing applied in my last book and in this book if youre an outsider whos trying to decipher something in order to make an audience understand it you have to ask really basic questions and then build it back up in the writing so that the best the place i was most excited about that is, you know, everyone thinks they know what an ipo is right like an initial Public Offering listing on a stock exchange, but if you really like go you have to go back to basics to understand it to play it back to a reader. I knew like a lot of my readers were going to be in tech they were never going to take a Company Public. So what does it mean to take a Company Public stuff like that . The basic question asking actually i think is an asset not a liability for a lot of writers who go into spaces. Theyre not familiar with. Yeah. No and thats certainly the case and a lot of the reviews and just commentary about the book. It reads like historical book like its written by a historian. And of course historians are never part of the ecosystems that they dive into and so yeah in some ways, i think thats what its one of these books that you know, a lot of books now are written by journalists who are actively part of the ecosystem and of course being an outsider you can take that objective lens and sort of treat it more as a moment in history. I think the other thing its a really great thought the other the other piece of it is you can ask questions that someone who has the challenging task of reporting on these people every day, you can ask questions that theyre not allowed to ask right like if you were dated i dont i dont know i admire daily journalists who have to cover like tesla and spacex and a firm their task is so much harder than mine in a way right because i was always i was always the enjoyable conversation in the day not the antagonistic conversation that right. Im not holding their profitability statements to account. Im asking about 20 years ago, and so for example, you know a journalist is not gonna be able to come to max. They are taking me back to the university of illinois champaign urbana. Lets talk about college i could and he was more than open about it. So in some ways my task was much easier, but coming at it from an outsider i could else as an outsider. I could also just like kind of riff and you know, ask random questions that i think were relatively engaging totally totally. No, no, you start the book out and this is one of the things that i still think even after reading the book and after thinking about it for a career. I still dont have the answer to you. So i want to get your answer, you know people look at paypal. As one of these just megawatt like the talent coming out of paypal is extraordinary like it touches every aspect of Silicon Valley touches every venture firm, it touches multiple companies some of the most valuable companies in the world. And of course as you said you were looking at these pockets of innovation and pockets of talent and you actually i blanket on the word that you use but theres a word for talent growing together and sort of supporting each other and you know, what was it about paypal and what have you learned about talent magnets and how this you know how this ecosystem function to be able to yield all of these incredible new companies and and kind of new results. Yeah, and the word was word. I didnt coin it. It was brian eno the music producer. He used the word senius like instead of genius. You have genius. Its like scene plus genius, but his word was senius and he was describing actually artistic clusters. So he was describing like that the era and period in place in which like rembrandt and kandinsky and others were were doing their work and hey what he it was funny when he writes about i i riff on it in the intro. He says when he was in art school, he learned that these were like solitary geniuses, you know revolutionaries, but but really when he started studying more he realized like there were our collectors and there were people underwriting the art and there were music, you know, they were like different venues and people and a whole cluster and an ecosystem that was supporting this particular gift. Right . So senius is interesting because it actually like leads you to think about this story not as like, you know, apple equal steve jobs facebook equals Mark Zuckerberg microsoft. Bill gates right with paypal you dont have that you have a lot of people you have at least 200 people in palo alto several hundred more in omaha when the Company Goes Public and you have some of the brightest lights in in modern technology and so for me what i was trying to do, you know, it was sort of what one ambition was. Just tell the story meaning what happened from 1998 to 2002 to create paypal. No one had really gone back and done a detailed look at that and and the hope what that was the sort of goal the hope was in doing that you might illuminate like, oh here are a few of the things that like actually made this this group that the made the group what it is later, right . So my story, you know is gonna disappoint some people because actually stops in late 2002, so i dont i dont really write about all the things. These people are more famous for today, but i do think there were some Common Threads in and things in the water in those early years that were really to me and hopefully youre striking to readers too. Totally. Totally now. You have some megawatt personalities in this book. Very famous people peter thiel elon musk read hoffman and yet you start the story and the story does in some ways revolve around max talk to us about like why you chose to start the story there and how you sort of realize that the story in many ways even that theres many personalities that hes one of the primary protagonists. Yeah, it was um, you know, authors are allowed like editorial curveballs. And that was one of the ones that i wanted to throw theres a few in the book, but thats one of them. So if you take a step back the paypal we know is the is the merger of two is created by the merger of two Companies One is called x. Com and that is elons company. Another is called at first called field link, then its called infinity creates a product called paypal that company is cofounded by peter thiel and max levchen. Its origins are and the reason chapter one kicks off with. Its origins are in cryptography actually in mobile encryption and mobile cryptography and mobile devices in college max. It developed a passion for like palm pilots and sharp wizards and casio pias. Like this is what were in the time machine now, right these low power devices, but he was trying to basically take these devices and and push them to their technical limit. Like how much could you make up on pilot do right. And that is what gives rise to the company that he pitches to peter thiel. Who is then an unknown investor . And he says i have this idea. Were gonna do mobile encryption libraries and people will be able to rent the libraries and ill get money and peters like, okay. Well you seem smart. So ill invest and well make a thing of it that company is called field link that starts in late 1998 chronologically. Elon doesnt start xcom until early 1999. So from the perspective of just accuracy max is sort of the kickoff bleed off hitter more personally. I found that because he was not a super well known figure there were so many things about his life and his personality that were so interesting like one of my one of my favorite writers has like this line. He says the best characters dont know that they are characters right . Like theyre they are intense and they come alive on the page, but if you but they dont know it theyre not selfconscious about it. Right and max is not household name famous and so in a way, theres not this persona like built up around him, right . And so every time i i ask a few more questions or talk to a few more people. I would discover that he had these like insane interests and like a real a kind of onceinageneration mind. Ill generation mind ill give you an example. In college as a way of if i remember correctly as a way of basically getting around a requirement to write a paper for a class. He decides that hes going to write a paper on a film and that film is course. I was seven samurai. He watches seven samurai once and writes the paper, but it kind of like gets into his head. He spends basically an entire summer. Just rewatching seven samurai over and over and over and over again, but as of as of our discussion right now, i believe his number is like hes watching a hundred and ten times one movie 110 times and this is like a three and a half hour black and white japanese movie, right . So were not were not like this isnt like an episodic. Its not like billions, right . And so i i just found that like to him that is perfectly normal to the rest of us. That is like, whoa. What are you seeing in seven samurai the rest of us dont see right and i found moment after moment like this he had a near photographic memory and he would Say Something and then i would find a piece of paper later that spoke to it. I felt like he was he was a character who didnt know he was a character and its like his life is the stuff of legend. You know, he he is 90 miles away from chernobyl when the reactor explodes. It curls tons of Radioactive Material into the sky. He is shipped on a pain away from this from the closest side of the disaster and on the way to the train a border guard with a Geiger Counter scans his foot and his foot sets off the Geiger Counter. So they think his foot is radioactive. And at one point theres some talk of whether you should have his foot amputated and i think this is mom or his grandmas like no no no take off his shoe and rescan the foot. They do the foot comes back clean. It turns out it was a rose thorn in his shoe that had set off the Geiger Counter chernobyl and the aftermath of snow will shape his life in powerful ways his family secures funding for a jewish Refugee Agency to come to the United States. He arrives as like i think a sophomore in high school. He learns english by watching different strokes, you know, and so i just found like these details that were so rich and candidly that werent picked over like he he is not wanted nor built a big, you know, gigantic illuminating public life for himself. I think hes still regards himself and others regard him as like an engineer. Near so when you have that as a writer, youve hit pay dirt you you have somebody who can watch the same movie a hundred times and is also has a photographic memory. Youre like, youre youre my young im kicking off with you. Yeah. Yeah. No and and you mentioned Something Else there too where he was in college and one of the things that i think if youre not familiar with the paypal story everyone thinks oh, well Silicon Valley stanford. This must have all happen at stanford. And of course like the university that actually matters here is university of illinois champaign urbana, and so talk to me about that. Like, how did these cofounders meet there . What were they working on where they where they built like talk to me about how the university plays into it. Yeah, its one of the the things that im more than happy to as somebody grew up in illinois. I was more than happy to discover this and then to correct the record in this way. So stanford is a big part of the paypal story to be fair a lot of the the column the business heavy is come from stanford, you know reid hoffman as a stanford graduate david sax is a stanford graduate peter does two degrees at stanford keith or boy on and on. I mean you go down the roster. Its sort of look at that the engineering a lot of the engineering have for the company does come from the university of illinois, and its always kind of you know, i had luke no sick. Tell me like, im one of my first conversations with luke. He said he was very skeptical as where they all of this project, right . And he said if youre going to do this, just please dont write the university of illinois out of this history as everyone else has and so to kind of give context in 1995 a Company Called netscape goes but i think was 95 netscape goes public netscapes founder was himself at the university of illinois mark and recent the person who founded your firm and for an entire generation of that of engineers, like not just the university of illinois, but in a lot of places that is like the starting gun for the internet revolution, but at the university of illinois, its personal, right . I mean, they max and others who were there described me. They said that that mark was just a few years. We used to see him in the bar or like we would see him on the quad and like now hes on the cover of Time Magazine like if he can do it, so can we and so there was a very direct link the university of illinois has an amazing history of contributions to computing some of the worlds First Digital computers are made there. Some of the worlds early a social networks are born there. They had a lot of Defense Department funding throughout the 20th century, so they were able to like build big labs right the National Center for super competing applications is there its called the ncsa. And you have a ton of really talented en