Foundry is a premium business intelligence publication featuring 551 articles from the best founders and investors. Topics cover leadership, strategy, fundraising, growth, AI, and more.

What topics does Foundry cover?

Foundry covers leadership, investing, AI and technology, product development, founder stories, mindset and career, marketing, hiring, fundraising, strategy, and more. Articles feature insights from founders like Elon Musk, Jeff Bezos, Sam Altman, and Jensen Huang.

Can I submit a story to Foundry?

Yes. You can submit a story at thefoundrybrief.com/submit. Foundry publishes articles featuring insights from founders and investors across all industries.

The PayPal Mafia Did Not Get Lucky. They Got Scrappy.

By Peter Thiel · Investing · 1 min read

220 PayPal employees produced seven unicorns. Google had 100x more people and fewer. Here is why.

Key Points

PayPal innovated on distribution, not just product
They pioneered viral email payments, platform strategy on eBay, and embeds
220 pre-IPO employees produced seven unicorns vs. Google's 20,000 employees producing far fewer

We kind of turned eBay into an involuntary platform for our application.

Product Is Not Enough

Every startup obsesses over product. PayPal obsessed over distribution.

They did not just build a great payment system. They invented new ways to get it into people's hands. That is what made the Mafia.

PayPal did not just build a great product. They invented distribution.

Three Tactics That Changed Tech

First: viral email payments. Send money to someone without an account. They click a link. They sign up. The product spreads itself.

Second: platform hacking. PayPal turned eBay into an involuntary distribution channel. They went where the users already were.

Third: embeds. A PayPal button on any website or auction drove users back. YouTube later used the same trick on MySpace.

Viral payments. Platform hacking. Embeds. Three moves that built an empire.

220 vs. 20,000

PayPal had about 220 pre-IPO people. They produced seven post-PayPal unicorns.

Google had 20,000 employees. Literally 100 times more people. They did not produce seven unicorns from alumni.

The difference is not talent. Google had plenty. The difference is scrappiness.

220 PayPal people. Seven unicorns. 20,000 Googlers. Fewer.

Why Big Companies Kill the Instinct

At Google, distribution is free. Hundreds of millions of users are already there. You never have to think about getting your first user.

At PayPal, you started from zero. How do I get one user? Then ten? Then a thousand? That muscle built founders.

Scrappiness around distribution is the secret ingredient. Big companies never teach it.

Big companies never teach the one skill that matters: getting your first user.