Reid Hoffman explains how PayPal hired young, fast learners instead of experienced specialists, creating a generation of founders. The 2002 eBay sale and market downturn forced early employees out at the right moment to start companies like LinkedIn, SpaceX, and Tesla.
Questions this video answers
2002.
LinkedIn.
SpaceX and Tesla.
Started a hedge fund (had done a hedge fund before and made a much bigger one).
Founded an incubator, later started/ran Slide, and is associated with Affirm.
Chapters
The thing that was unique about the PayPal crew is typically when people start companies, they go, oh, I need to get people with a lot of experience at doing just this job. Like, you have a lot of experience coding, you have a lot of experience running the data center, you have a lot of experience marketing, you have a lot of experience selling. PayPal opted for very high talent young people with the expectation that the high talent young people would learn the jobs. So as opposed to hiring someone who's like, well, you've had a ton of experience doing this exact job, we said, we're going to hire someone we think is a very fast learner and we're going to trust that they're going to learn the job really fast and we'll hire some experienced people too. But a huge predilection of that. And so part of the reason why the PayPal folks all went off and were a entrepreneurial b. Went off and did stuff is you had a whole bunch of high talent young people that had experience with entrepreneurship experience. Young. The PayPal story was like basically kind of, let's call it four years from beginning to sales. So everyone was like, well, I got to go do something. And so then everyone else started running off and doing all the different things that they were interested in doing. And I went off to found LinkedIn. Peter started a hedge fund. He'd done a hedge fund before, but made a much bigger one. Elon went off to do SpaceX and Tesla. Max founded an incubator, then did slide, and is now doing the incubator with another company, Affirm now. And that's. That's because we were all like, this is a game that we got experienced in that we like. And then the quote, unquote, I don't really like the term PayPal mafia, although it's entertaining because Mafia is not the organization you aspire to. PayPal network. I like PayPal network very good. Yes. But the thing that was also very helpful then is in 2002 was when PayPal was sold eBay. And a lot of great projects and great entrepreneurial companies get started during actually downturns. And we were all very fortunate that we all got free to our next projects during a downturn because it meant the capital we got from PayPal we could use that because when lots and lots of companies are starting, it's very hard to break through the noise. In a downturn, there's few companies and so it's more. You have a longer Runway. If you can get the financing for it, you can be one of the interesting projects. You can aggregate talent for it. And we were all very interested in the consumer Internet. And so that's part of the reason why the PayPal mafia all interested. Although Elon went and did hard science projects. Great. It's an awesome example for that. But that's part of the reason why it was an unusual large number of people who went and founded interesting companies from that.
