How paypal was founded


    How paypal was founded

  • 1 Max Levchin was in love with cryptography

    Max Levchin, one of Paypal's founders, was in love with cryptography. He wanted to start a business that had security in its core operations .

  • 2 Max met Peter Thiel and pitched the idea

    Max met Peter Thiel at Stanford where he was giving a lecture. Max realized Peter Thiel was a part of a hedge fund and so agreed to meet later to discuss Max's business ideas .

  • 3 Paypal was started for a different purpose

    Initially Paypal was started as a company that builds security software that can be used on hand held devices. Peter Thiel funded the company and became a partner .

  • 4 Max decided to turn the product into an electronic wallet

    Max was trying to find a way to use the Crypto system he created for the handheld devices. Finally he decided to use it for creating an electronic wallet where people can send money to each other securely .

  • 5 The idea got 4.5 million of funds from different VCs

    After the idea was pitched Paypal got 4.5 million dollars worth of funding .

  • 6 Paypal was mainly for Palm pilot

    Paypal was originally designed for hand held devices, specifically the palm pilot device. The owners decided to create a website to allow people to take advantage of the same features using the website. It was however believed by the founders to be a trivial step .

  • 7 The founders realized that the web users were growing more than the palm users

    The founders discovered that more and more people are using Paypal from the web and that the growth in the numbers of people using the demo website is much better than the growth of people using the software on the palm pilot device .

  • 8 In year 2000 the team discontinued the Palm pilot software

    In year 2000 the Paypal website had more than 1 million users while the palm pilot had 12,000 users. The Paypal team decided to give up on the palm pilot software and to focus on the fast growing web version .

  • 9 The company had troubles with fraudulent orders

    The company started losing month each month as a result of fraudulent orders. After sometime the team managed to find ways to keep the percentage of frauds under control. It's believed that many Paypal competitors went out of business because of the massive fraudulent orders they got .

  • 10 Paypal grew fast virally

    Paypal grew very fast as a result of word of mouth and viral marketing. Users were allowed to send money to those who don't have Paypal accounts. The later group had to sign up and create an account to receive the money. This technique helped Paypal become viral .

  • 11 Paypal was getting around 20,000 new users each company

    Paypal grew fast. The company had 1,000 employees and was getting 20,000 new users each day .

  • 12 The company went public and got acquired by Ebay in 2002

    Shortly after the company went public it was acquired by Ebay for around 1.5 billion dollars .