The Birth of Paypal

something is I have no idea. I've heard that's going to be entertaining and funny, and maybe it'll tie into a recent ad they did with Will Ferrell where he runs into a bunch of wind chimes. Don't know for sure, but I do know that if you tune into the game on ESPN, you can actually see whatever this is unfold. And I think the hope is that this is going to be a big talking point, and I'm certainly curious. But in the meantime, I thought it would be cool

to talk about the origins and evolution of PayPal. So this is kind of a high overview, mostly about the formation of PayPal and then a little bit about its evolution because this is a topic that I've actually touched on a few times in tech stuff while talking about other companies, primarily eBay, or when I was talking about the origins of Elon Musk's obsession with the letter X, because that actually plays a big part of it too, But I have never done a full episode dedicated to

the fintech company that set the standard for everybody else, Like PayPal is a pretty remarkable success story, especially when you expand that out to say, okay, let's look at some of the influential figures who are part of PayPal's founding. They largely went on to do lots of other stuff

and become really really wealthy in the process. But in the beginning, before there was PayPal, there were two other entities, so starting first with one called Confinity, although even this company reportedly had an earlier name called field Link, that was co founded by Max Levchin and Peter Tiel in nineteen ninety eight with a few other partners. Although Levchin and tel are typically the only two you read about in most histories, they weren't the only ones, but they

were the ones that were, you know, referenced the most. So. Levchin was born in Ukraine in nineteen seventy five. His family immigrated to the United States in the early nineties. He was interested in computer science, and he earned a degree in the field of computer science at the University of Illinois at Urbana Champaign in nineteen ninety seven, and then like the next year, he would co found this company that would eventually evolve into PayPal, which is quite

a stratospheric rise. I mean, to go from a rush college graduate to co founding a blockbuster of a company in just a year, that's incredible. Of course, we also know lots and lots of stories in Silicon Valley about college dropouts who go on to forge incredibly successful entrepreneurial careers. Just a quick reminder, for every great success story there is, there are countless stories of people who dropped out of college and then regretted it later. So it's by no

means a guarantee. I mean, if you've got a really great idea and you're also lucky, then you know you might have a really good shot anyway. The other co founder Peter Tiel, he's almost a decade older than Lefchen. He was born in nineteen sixty seven, and he was born in what at that time was referred to as West Germany. We just call it Germany now because it unified again. He was just a year old when his

family immigrated to the United States. Teel majored in philosophy at Stanford University, graduated in nineteen eighty nine, and he leaned heavily into libertarianism, and to this day, Teal is known as being a political activist as well as an entrepreneur. Levchen would successfully convince Teal to serve as the CEO for Confinity once it launched. Reportedly, Teal didn't want to do that initially, he just wanted to be an investor,

but Levchen convinced him to serve as CEO. Now, there were four other co founders of Confinity, whom, as I mentioned earlier, they often don't get talked about nearly as much in the various articles and histories of PayPal, But those other four co founders included Upon ken Howery, Luke Nosek, and Russell Simmons, all of whom have earned the descriptor

entrepreneur to say the least. So their goal, at least, as described by Fintech magazine, was to quote democratize financial services and empower people and businesses to join together and exchange value for better experiences end quote. But that doesn't really mean much, right, Like I mean, yeah, it tells you what the end goal is, but it doesn't tell you through which methods are they planning to achieve this goal. So I would argue this gets maybe a tiny bit confusing.

So on a more specific and perhaps less grandiose level, the original aim of Confinity was to develop a payments platform built on top of the palm pilot. And you may not remember what these devices were if you are younger than someone likes say myself. The smartphones made old personal digital assistants or PDAs obsolete, but way back in the day these things were like the go to tech accessory if you were in business. Palm pilots were a

type of PDA. So these are digital devices that could access stuff like email and contacts and calendars and that kind of thing. Often they didn't have any direct Internet connectivity on their own. What you would do is you would sync your device to a computer that did potentially connect to the Internet, and you would do this through various means. It might be through a cable, or it

could be through an infrared sensor. A lot of them had those including the palm pilot, and you would carry this around with you, and while it didn't have all the capabilities of a smartphone, it did boost what you could do just on a regular cell phone. So business leaders would typically have each of these types of devices. So it's no big surprise that gradually PDAs and cell phones would converge into the form factor of smartphone, and then it would take a few more years for smartphones

to become a consumer product beyond just the business elite. Anyway, Levchin and Teal were essentially trying to make a product that would let business leaders exchange money digitally through mobile devices, and the way this would work was through beaming data through infrared signals. So, like I said, they had infrared lights and infrared sensors, sort of like a television remote, but you know, TV remotes typically only just beam stuff

to a receiver connected to your TV. In this case, the palm pilots had both the sending and receiving elements, so it's like a transceiver. So you had to point the devices toward each other, you know, you had to have a line of sight between the two palm pilots in order to make one of these transfers happen. Once you did that, you still had another step to take. Like you didn't just magically have money added into an account.

What you would have to do is you would have to take your Palm pilot, synk it back to your computer, log into the Confinity website, and then you would choose how you wanted your money credited to you, like you could receive a credit like a credit card. Some Essentially you could have a check cut for you, so that means you gonna have to wait for the check to come to the mail, or you could do direct deposit

to your bank account. It all depended on how much you trusted Confinity, I guess because in those early days, I think a lot of people forget this, but in the early days of e commerce, there was a lot of worry and anxiety around how would you handle digital transfers of money in a way that wouldn't put you at risk. Like no one wanted to put their credit card into a website, let alone have their bank account

connected to an online service. So this wasn't a seamless service at this stage right the beaming of information between palm pilots, but it was the beginning of something Teal and Levchin saw that the world was likely going to move more toward a mobile landscape. It would take about a decade for that to actually happen, but it certainly did. You can't deny that the mobile web completely changed the

way the Internet worked for the average person. So the name Confinity itself was a portmanteau of confidence and infinity. The team focused on cryptography because obviously it's necessary to protect any sort of financial transactions between mobile devices. You want to make sure that only the parties that are involved in the transaction are able to access that. You don't want anyone snooping in and being able to, you know, digitally,

steal cash. They also worked on the concept of digital wallets, so a virtual account where you could keep deposits, withdrawals, and transfers in a way that was reliable and secure and didn't necessarily require you to constantly tap into that through like a more established financial institution to get like a check cut or something like that. So this would help reduce the number of steps needed to interface with

money from a user perspective. Confinity developed a money transfer service, and this is the service that ended up getting the name PayPal. So originally PayPal was not the name of a company. It was just this service from Confinity. But as I mentioned earlier, Confinity was just one of two entities that ultimately would evolve into PayPal. There was, as Yoda might say, another sky Walker or you know, just another another company. That another company was the original X

dot com. Well not the original X dot com actually, because X dot com existed before this did. This is complicated. Okay, so today, if you say x dot com, you're referring to the entity that was formerly known as Twitter. Now, at the time of PayPal's founding, X dot com was known as an online financial company. More on that than just a moment. But really, the original x dot com was neither of those things. It was instead the URL

for a company called Pittsburgh Power Computer. I found that thanks to Jimmy Sony, who wrote a piece on Medium about the origins of X dot Com. He's also written extensively about various founders in Silicon Valley in a book called The Founders. Pretty handy there. Anyway, even this story gets more complicated, of course it does. So the owners of Pittsburgh Power Computer were in a jam, so they

had established a website at www dot PPC dot com. However, they lost that URL after a company called Network Solutions bought out the contract for their domain hosting that granted them that address. So they reached out to Network Solutions to find out what other URLs they might be able to secure for themselves, and they found that www dot x dot com was available and they said, oh, we'll

have that one please. Now, this almost didn't happen because while they were able to secure the URL from the DNS point of contact through the network company, their Internet service provider said that looks totally sus and we are not going to let you have it. However, the owners builled out the necessary paperwork to establish this as their URL, and whoever it was that objected to x dot com at their ISP must not have looked at the forum because when it was all sudden and done, they they

were able to secure x dot com after all. Shortly thereafter, the Internet Assigned Numbers Authority scooped up all the remaining one letter URLs that were left. There were twenty three unassigned ones at that time. The ones that had been taken at that point were x, Q, and Z, So if the pair had even dawdled a little bit, they wouldn't have been able to get x dot com at all, because it would have been sort of a manifest destiny

kind of land grab from the Iana. Anyway, the pair of business owners held onto this URL even though they ultimately sold the computer company. So they kept the URL after selling the company, and they kept it for stuff like their personal emails, because like having name at x dot com. That's kind of fun, right, And then we get up to nineteen ninety nine. That's when Elon Musk, who was fresh off of selling his first company, zip Too, popped up with an interest in buying the x dot

com URL. He had not been the first person to approach the pair, but he was the first to have a pick that they actually found to be interesting, and that pitch was to bring investment and banking to the internet writ large. The early services would be similar to what Confinity would provide, like linking banking and transfers to email addresses, but Musk's grand plan was to get into all things financial, with x dot com being kind of a portal to everything you can think of in the

finance world online. The former owners of x dot com accepted some cash and perhaps more importantly, a stake in Musk's company. And Musk groused about that last bit. He actually publicly groused about it in an article, but he agreed to the terms so that he could gain possession of x dot com, and initially X dot COM's focus was on being able to make payments online through email. Interestingly, Musk's HQ for X dot com was in an office building and the company occupying the office next door to

them was you guessed it, Confinity. We'll talk more about that in just a moment, but first let's take a quick break to thank our sponsors. We're back, okay, before the break I had mentioned. Now we have two different fledgling fintech companies occupying office space literally next door to

each other. Now, both companies had large scale plans to become like all encompassing online financial institutions, but they were taking slightly different pathways in order to get to that destination, and in the early days, they were not directly competing. They each offered complementary methods to process payments online, but they didn't directly overlap. They also chatted with each other

a bit. According to the aforementioned Jimmy Sony. Each company, the employees felt like the employees of the other company were taking the wrong path. So essentially they were both saying, like, man, those lunkheads over next door, Gosh, they sure do have it wrong. And they had both groups saying this at

the same time about the other ones. Anyway, we should also set the scene a little bit to remind ourselves of what the world was like, because this is the late nineteen nineties, right We were in an inflationary period of the dot com bubble. Like startups were going banana at this time. They were popping up all over the place. A lot of them were flush with cash, either from angel investors or going public really early on before they had much to show for it, and just getting flooded

with you know, people buying tons of stock. And investors saw the Internet in general and the Web in particular as being the digital equivalent of a gold rush, so investors didn't want to be too late to the party

or else they would miss out. So a lot of startups were getting injected with way too much money for their own good, and this would become undeniable once the bubble did begin to burst in like two thousand and two thousand and one, and at the time in the late nineties, it just seemed like even the sky wasn't the limit. There was no limit. The limit does not exist,

as mean girls would tell you. But it turned out that the mean girls were being extra mean because the limit did exist, and people ran up against it pretty hardcore in two thousand and two thousand and one. But on top of that, in the environment, there was also this looming specter of Y two K. Now, in case you're not familiar with Y two K, maybe you were born after two thousand. You don't even know what the deal is with Y two K. Well, here's the short version.

So early on in the days of computer coding, programmers would often take a shortcut if they had to include digits representing a year in their code. It's like a lot of different software would keep track of the year, and each year the digits would go up by a number, But rather than use four digits, which would take up

more valuable space, they used two digits. I mean, why wouldn't they So Like, if you were a computer programmer in nineteen seventy seven, and you were right, some software you might designate the year just by seven to seven, and then the next year it would go up to

seven eight. That sounds like a trifle, but keep in mind that, you know, computer science was really tied to what we could achieve through semiconductor design and manufacturing, and that in itself was progressing at a very steady rate, a fast rate, but steady, and computers were under tighter limitations than what we have today, so conserving space when you were coding was actually a priority. You couldn't just you know, be extravagant with the amount of code you

were putting into your software. So this became a convention of using two digits to designate the year, help you save a little bit of time and pluss what everybody else was doing. And it stuck around even as the limitations in computing became less of a problems as we got to a point where we could afford to use four digits to designate a year or more if we wanted.

But the convention was already in place, And meanwhile, I'm kept on advancing as time often does, and it meant that those two digit counters were getting closer to nine to nine, and that led people to say, huh, what's going to happen when the calendar turns to January first, two thousand and that was a huge question. Some folks thought nothing really important was going to happen. Others worried

that it could mean global chaos. So in the financial world, for example, there were a lot of very understandable concerns because the worry was that the computer systems that were now responsible for financial operations around the world would suddenly interpret the two digits to mean that it had turned back to nineteen hundred again, and this in turn would affect all these calculations that depended in part on what year it was, So, for example, calculating the amount of

interest an account was accruing, that could totally create an issue like no one knew what would happen either would it credit the wrong amount, would it take money away? Would it just crash the system? If suddenly the appeared to term back in time ninety nine years, what happens then? So people were worried that everything from total financial collapse to everyday appliances going haywire would occur. Thanks to these

space saving measures. Some programmers that introduced decades earlier, but companies like Confinity and x dot Com they started up well after the world had started to worry about what might happen upon the dawn of two thousand. As such, they were able to anticipate and sidestep those issues, largely because they could take measures to make sure their systems would continue to operate as designed after we were done partying.

Because it was nineteen ninety nine, so in a way, they were being looked at as the future of finance because unlike the established financial world, these weren't legacy companies like legacy institutions that were then attempting to digitize and become modern nice. They were in fact of the digital age themselves, and so they weren't burdened by this massive legacy of systems that may or may not be compatible in the new era. So that ended up being like

a big selling point for both Confinity and x dot Com. Meanwhile, Confinity had landed a pretty sweet deal, and it was a deal that forced the company to pivot. But that pivot might have been what ensured its ultimate success, and that was partnering with a little online e commerce platform called eBay. So in the old days of eBay, users could put stuff up for auction and bid for stuff that was for auction. You could also eventually put in an actual buy price and just buy things outright rather

than bidding for them. But once someone won this bidding war, even if they're the only one bidding on something, whatever it may be, well, then it was time for the person who won the auction to pay up. Except there was no digital means to transfer money. So originally on eBay, the deal was if you won an auction, you were expected to write a check to the seller and to send the check to them through the mail like the postal service, like a caveman, essentially, so obviously, this slowed

things down considerably. Sellers had no incentive to send stuff right away because they didn't yet have cash in hand. They weren't guaranteed to have actually received a check yet. Meanwhile, the buyers might worry that they were sending a check off only to never receive that you know, he man, body, pillow, or whatever it was they were buying. Confinity's PayPal service sped things up considerably. eBay would urge customers to sign

up for PayPal accounts to expedite payment. You know, you just connected your email to PayPal and then you could start depositing money into a PayPal account and use that to purchase stuff, and Confinity saw great success because lots of people on eBay preferred this to the old method of cutting a check and sending it through the mail, So PayPal and Confinity started to see a lot more

folks sign up for service. Now, by this time x dot Com and Confinity were more directly competing with one another, and this meant that Confinity was doing pretty darn well. And I'm sure that rubbed musk the wrong way, but neither company was doing as well as it could have been because they were spending a lot of their time and effort in an attempt to out compete the other. And that just meant that they were trying to drink each other's milkshakes, and they could have been directing that

attention toward fostering a stronger business. Gradually, the two Camps came to a realization that by merging the two companies together, they could bolster their services. They could combine where it made sense and incorporate the complementary features that each one offered to make a better product overall for customers, and that this would be a fifty to fifty partnership a true merger. Bill Harris, who had served as CEO of X dot Com leading up to this merger, would continue

on as CEO of the newly merged company. Must would be a sort of co CEO. Peter Thiel, who had been CEO of Confinity, would become the executive vice president of finance, and Levchen would become the company's Chief Technology Officer or CTO. And initially the plan was that the Confinity brand name would ride off into the sunset. They were going to retire Confinity. The new company would instead

be called not PayPal but X dot Com. PayPal would continue to be the name of the payment service, the money transfer service, but it would not be the name of the company, at least not initially. There were actually talks of rebranding the name of the service as ex hyphen PayPal, which seems confusing to me because you're like X PayPal, you mean something that used to be PayPal but isn't PayPal anymore. And in fact, the folks over

at PayPal were not crazy about this idea. They did not agree with Elon Musk that X was the coolest letter in the alphabet and that everything should be named after X. Meanwhile, Musk was very much adamant on that, and things did not go very smoothly for this newly merged company. It turned out that there were a lot of disagreements between the various parties who were coming together

to form this new entity. So Peter Thiel resigned as EVP, and Musk and the Board of Directors had Bill Harris removed as CEO and Musk took his place because Bill Harris was seen as not being focused enough on the technology side of things. From what I understand this is based off of various articles that were written well after all of this happened. Teal actually came back to the company after Bill Harris was removed as CEO, and Teal

would become the chairman of the board of directors. Elon Musk began making some pretty hefty demands of the company, like really really aggressive goals, ones that would have been difficult to achieve both from a business standpoint and a

technological standpoint. This might sound familiar because his style doesn't seem to have changed much over at formerly known as Twitter, where he has both reduced the staff dramatically through layoffs and also placed some really aggressive goals for the people

who were left behind. Well, he was doing that over at X dot com as well, and he was really gung ho on that name, Like he was just absolutely fixated on X, thinking that it was the coolest letter and that this was going to really make people want to use the company's products and services. Other stakeholders were not so sure about that. They were worried that one, no one was going to know what X dot com was all about because the name was not particularly evocative

of what it was doing anyway. And they were also more worried that people might think it was linked to pornography because of the designation of X rated movies. So they were worried like, one, they're not going to know what we do, and two, if they do think they know what we do, they're going to think it's pornography related and that's not the case. So what happens next has become something of internet legend, or really tech legend.

The story goes that while Musk was traveling to Australia to celebrate his honeymoon with his first wife, Peter Teel organized the board of directors to remove Musk from the position of CEO so to hold a coup the way Musk did with Bill Harris and boot Musk from the company. So this was in two thousand. Also on the board of directors at that time was Rydehoff, who would go on to found the company LinkedIn. There are a lot of luminaries in the tech world wrapped up in the

story of PayPal. We'll touch back on that before the end of this episode. So Musk was ousted, however, he retained his stake in the company and that would go on to make him really filthy rich. Now, to be clear, Musk was already rich, It's not like he was coming from humble beginnings, but this would be a really big boost. More on that than just a moment. But Peter Thiel took on the job of CEO, and ultimately the folks remaining at the company needed to figure out what they

were going to call it. Confinity had been retired as a brand, and no one really felt like that was the strongest name X dot com everyone agreed was confusing and potentially self defeating, so they turned to the most successful service that the company had offered, and that was the one used by countless people on eBay. They chose to rename the company PayPal. Okay, we've got some more to talk about with PayPal's origins and a little bit

about evolution, but first let's take another quick break. Okay, we're back. So between two thousand and two thousand and two, PayPal establishes its identity using the PayPal name for the company, and begins to innovate even further in the payment space and establish itself as a successful payments processing platform for eBay, and by two thousand and two, it was ready to hold an initial public offering an IPO, and thus become

a publicly traded company on the stock market. Now, I often say that tech startups really all startups, but tech startups in particular usually have one of two goals. Either go public, which brings in tons of money through the stock market, and thus early investors angel investors can see a big return for supporting the company when it was

a weedy little startup. Or option two, get acquired by a much larger company for hopefully a huge amount of cash that also allows early investors to see a really big return on their initial investment. PayPal actually managed to do both in two thousand and two. It went public in two thousand and two in February and raised more than seventy million dollars in the process. But that was chicken scratch. I mean, part of the reason it was chicken scratch is that this is two thousand and two.

That means the world had already seen the dot com bubble burst at that point. So while the market was in recovery, the craze around tech stocks where it would rocket a stock to the moon, those were a thing of the past. PayPal still did well. It just didn't explode like the dot com companies that went public in the late nineties before everyone came to terms with reality. But then later in October two thousand and two, eBay

made an offer that the shareholders couldn't refuse. So hasn't even been a publicly traded company for a year yet, and eBay says, we want to acquire you. And it ended up being for the princely sum of one point five billion dollars billion. With a B. PayPal would become the official payment provider for eBay. In the process, not just not just an option, it's the official one. The founders would all become millionaires. Musk was the largest shareholder.

He would pocket a quarter of a billion dollars himself. Y'all, I would not mind getting tossed out of a company if it meant that a couple of years later I'd be paid two hundred and fifty million. Smack aarows. That seems like a fate I would welcome. Several of the co founders left the company upon the completion of this acquisition. So Max Levchin, who kind of was the guy who came up with the idea for Confinity in the first place, he left, and he would go on to found a

media sharing service called Slide. Peter Thiel left and he founded a hedge fund called Clarium Capital, and then later on he founded the data analysis firm Palanteer, which all, that's a podcast topic that's just waiting to happen, but I'll leave it for now. The folks who were part of those early days at PayPal would a lot of them would go on to create some really large tech companies, or they would take existing tech companies and then boost

them considerably. Musk did this. Like Musk gets credit for creating a lot of tech companies, but in many cases those were companies that were founded by other people, and then Musk kind of came in and sort of took them over. So like with Musk, you've got Tesla and SpaceX, and these days you have like x, Dot Ai and lots of others. With tel you've got Pal and Tier, which is that big data analytics company. You've got LinkedIn, YouTube, Yelp affirm. All of these came from people who had

previously worked over at PayPal. The group of entrepreneurs who fostered PayPal into a company that eBay acquired for one point five billion became known as the PayPal Mafia. It's a group of business leaders who largely became serial entrepreneurs. They often invest in one another products and projects. Not always, but I mean there's a lot of cross pollination going on between the group, and so they were just seen as this incredibly influential and powerful group of tech business

owners who went on to create success after success. Several of them today are billionaires, So that is a heck of an alumni to belong to. As for PayPal, under the operation of eBay, it actually largely got to operate as an independent entity. It was not micromanaged by eBay for the most part, so there was a lot of innovation in digital payments, and PayPal as a result, continued to grow its influence. It began to find its way

into lots of different types of storefronts, not just eBay. Meanwhile, eBay itself was starting to encounter a few challenges with PayPal flourishing while eBay was not growing as quickly. One investor in particular began to push for the two to part ways more than a decade after they first joined.

So in twenty fourteen, Carl Icon, who is often referred to as an activist investor, which means he invests a lot, like he buys a lot of shares of companies, and that gives him pretty powerful rights as a shareholder to tell companies what they should do, and he gets kind of irritated if they don't do it. Anyway, That's what

he was known for. He called on eBay to spin off PayPal, and he argued that PayPal was doing well, but it would do even better if it were freed from the corporate oversight of eBay, that eBay was essentially

holding PayPal back. Now. eBay's board of directors initially dismissed this suggestion, but then later in twenty fourteen, they kind of came around to the same conclusion, and in twenty fifteen, eBay did in fact spin PayPal off and PayPal once again became a publicly traded company on the stock market. So it had done that in February two thousand and two, and then in twenty fifteen it would come back to

the stock market as its own company. PayPal continued to offer news services, and like I said, lots of storefronts began to use PayPal as at least a payment option for customers, if not the only one. Interestingly, in twenty twenty one, eBay announced it would end support for sellers to use PayPal accounts in order to handle funds. You can still use PayPal to buy stuff on eBay, but the people selling it, they wouldn't collect the funds in

their PayPal accounts. Instead, those funds would have to be directed to their bank accounts. This would mean that eBay would be able to institute a processing fee for each of those transactions, which was I think thirty cents plus a percentage of however much the transaction was. And that really is the reason for this, right eBay decided to get rid of PayPal because PayPal was getting those transaction fees. This way, eBay could get those transaction fees and PayPal

would not have access to that anymore. You can still again purchase through PayPal, like if you go on eBay today and you want to buy something, you can use PayPal to complete your half of the transaction, but on the back end of the seller side, it was a

different story. Over the years, PayPal has formed partnerships with many other financial institutions, which gives it, you know, definitely the era of legitimacy right Like Initially, there was a lot of skepticism about digital money companies, Like there was just a lot of fear that these things would be a flash in the pan and then ultimately you would have investors and customers left holding the bag when it

would fail. But PayPal stuck around and it formed partnerships with companies like credit card companies like Visa and MasterCard, and major banks like Wells Fargo, as well as with big tech companies like Google and Apple. So if you were to use Google Pay or Apple Pay, then PayPal

would be incorporated into those offerings as well. It also acquired numerous other companies in the fintech space over the years and back In twenty twenty one, PayPal introduced the ability to pay for purchases using cryptocurrency, So again, pretty innovative. I mean, I still have issues of cryptocurrency not really acting much like a currency, well, specifically Bitcoin. Other cryptocurrencies are a little more stable. Bitcoin, though, is so volatile that I don't really see it being used as a

currency in a way that makes anyone feel comfortable. Anyway. Also, I've heard some younger folks say they don't like PayPal, they don't trust PayPal. Instead they use Venmo, which, well, I got some bad news for you if that's your point of view, because Venmo has been part of PayPal since twenty thirteen. It didn't start that way. Venmo was a service created by another company in two thousand and eight,

two thousand and nine, somewhere around there. But in twenty thirteen, PayPal bought that company, so Venmo is a subsidiary of PayPal. If you think that Venmo is more trustworthy than PayPal, you just need to know that they're all the calls coming from inside the house. Anyway. PayPal has also been the center of a few different controversies, more than a few. I mean, any company that has been around for a

while certainly has had a few. But if you're a financial company, well, for one thing, you got a big target painted on you, right like, if you are handling digital payments, hackers are going to want to try and find a way to get access to that. You know, it's essentially a digital bank robbery. But apart from the fact that PayPal is constantly having to invest in security because of its attractiveness as a target, there are also other issues. There have been a couple of data breaches.

There was one in twenty seventeen that leaked the personal identifiable information of more than one and a half million customers. That's not great. In twenty fifteen, there was a really nasty case where the US Treasury Department pursued PayPal because they were accused of processing payments that were for illegal activities, including things like black market nuclear weapons, which is a

big old yaoza. So, like a lot of cryptocurrency companies that are under scrutiny for similar situations, PayPal had to deal with that as well. Today the market cap for PayPal is more than seventy billion dollars. That's not too shabby, And as I said, a lot of the people who were involved in PayPal in the early days, they went on to create some of the most influential companies in

the tech sector. Even those who were staying with PayPal, you know, the ones who didn't necessarily become millionaires overnight when eBay purchased PayPal, the ones who were there when eBay spun PayPal back off. A lot of them became millionaires when PayPal became publicly traded. And you know, people who had been compensated in part through stock options. If they executed those options, they could have walked away with

quite a bit of money too. So PayPal has certainly fueled quite a few people's personal wealth as well as a lot of my purchases of vinyl online. PayPal's kind of my way to go for that. So yeah, that's a quick look at the birth and evolution of PayPal. There's a lot more we could talk about. I mean, a lot obviously happened between two thousand and two and today, way too much for just one episode. A lot of that ends up being kind of the growing pains of

a division underneath a larger company. That's something that I have experienced personally as well, having been part of how stuff works, and then that was purchased by Discovery Communications. That was me getting a first hand experience of what it's like to be part of a company that was once really nimble and agile and then incorporated into a much larger corporation. PayPal kind of saw similar things, although

obviously the details were totally different. But yeah, maybe I'll do another episode where I'll specifically talk about what happened at PayPal under the umbrella of eBay, beyond just the highlights that I touched on in this episode. But that's it for today's episode of Tech Stuff, A quick look

at the history of PayPal. Just a quick reminder. Like I said, there's apparently going to be some sort of cool slash funny thing going on during Monday night football on ESPN involving PayPal, and I'm certainly curious as to what that might be. It's not often that I hear buzz and get a chance to pass it on to everybody else, but this is one of those cases where I have heard the buzz, so I wanted to communicate

it to all of y'all. Anyway. In the meantime, I hope everyone out there is doing well and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows. You