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Max Levchin: Peter Thiel Lost His Entire Investment. His Reaction Changed Everything.

By Peter Thiel · Founding Stories · 1 min read

Luke had just lost all the money Peter invested in a startup. Levchin told Peter with trepidation — hey, Luke is a really great guy, maybe work with him again? Peter: 'Of course. I should have thought of that myself. He's brilliant.'

Key Points

Luke Nosek lost all of Peter Thiel's investment in a failed calendar startup called SmartCal
Thiel wasn't angry — 'he's brilliant' — and recruited Luke for what became PayPal
The founding crew of PayPal came from Peter, Levchin, Luke, Kenny, Russ Simmons, and Yu Pan

So you're not pissed at him? No. He's brilliant.

Luke Lost All the Money

Levchin: I was certain that Luke and Peter would not get along, because Luke had just lost all the money Peter invested in a startup. SmartCal — it was a calendar company. It didn't work for much of anything. I remember hanging out in his office and watching how a startup was shutting down. It was really sad.

Luke had just lost all the money Peter invested. SmartCal was shutting down.

So You're Not Pissed at Him?

Levchin: I told Peter with trepidation — hey, Luke is a really great dude, really worth trying to work with again. I understand SmartCal... Peter said: 'Of course. I should have thought of that myself.' So you're not pissed at him? 'No. He's brilliant.'

And so Peter recruited Luke. While I went back to Illinois and recruited the two brightest kids I knew in college.

I should have thought of that myself. He's brilliant. — Thiel's reaction to losing his investment.

The Makings of the PayPal Mafia

Levchin: The first founding crew of PayPal was Peter and me, Luke and Kenny on the business side, and Russ Simmons and Yu Pan. Yu Pan was the first engineer at YouTube. Russ Simmons was co-founder and CTO of Yelp.

The makings of the PayPal Mafia are in that list.

Yu Pan — first engineer at YouTube. Russ Simmons — co-founder of Yelp. All in the first PayPal crew.