[HN Gopher] Inside PayPal (2010)
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Inside PayPal (2010)
Author : prakhargurunani
Score : 171 points
Date : 2021-04-13 07:08 UTC (15 hours ago)
(HTM) web link (paulgraham.com)
(TXT) w3m dump (paulgraham.com)
| ArtWomb wrote:
| PayPal's Technical FAQ from Oct '99 (cobbled in response to a
| Slashdot post haha) demonstrates how ahead of the game they were:
| use of ECC (with tech advice from Stanford's Dan Boneh & Martin
| Hellman), privacy policy that prohibited sale of user data to 3rd
| party advertisers, generating cash via "the float" in a Merrill
| Lynch Money Market Fund, etc.
|
| https://web.archive.org/web/19991012084438/http://paypal.com...
|
| But I think it's probably the "synergy" with eBay that was the
| biggest surprise. I recall having a neighbor at that time who
| sold old movie posters. Rather than driving around the country to
| comic book conventions, he was able to do more in one month in
| online auctions than the past decades he had been collecting.
| That was the great awakening. PayPal went from "college kids
| requesting cash from parents" to trading rare sports memorabilia
| with instant clearing by March 2000.
|
| >>> If you needed to integrate with an outside vendor, you picked
| up the phone yourself and called; you didn't wait for a BD person
| to become available. You did (the first version of) mockups and
| wireframes yourself; you didn't wait for a designer to become
| available. You wrote (the first draft of) site copy yourself; you
| didn't wait for a content writer.
|
| "You must unlearn what you have learned" ;)
| dehrmann wrote:
| > Rather than driving around the country to comic book
| conventions, he was able to do more in one month in online
| auctions than the past decades he had been collecting.
|
| I personally try not to collect things, but for those who do, I
| wonder if this ruined the hobby because of instant
| gratification.
| 101008 wrote:
| I do collect books. No, it didn't ruin the hobby and most
| collectors would agree. eBay allow me to search for books
| without having to travel to different countries, or whatever.
| I can buy books what it wouldn't be possible without eBay.
|
| For people who doesn't collect, may look like that, because
| they may think that going into eBay could ruin the fun,
| because everything is easy to get now. It isn't. You need to
| learn tricks and also, how to win over other collectors who
| may see the same item that you did.
| Retric wrote:
| As a former collector, I can only disagree. The hunt was
| interesting, but looking at a computer and spending money
| just doesn't do it for me. At the same time it made the fun
| parts of the hobby feel pointless which just killed all the
| joy.
| SketchySeaBeast wrote:
| I would assume it replaced it with the anticipation as the
| item makes its way to you?
| [deleted]
| dehrmann wrote:
| The synergy with Ebay was definitely what drove the business.
| What's interesting is they we positioned to _be_ Venmo, but
| dropped the ball and had to buy them. I suspect that failure
| was part of the motivation behind the Paypal /Ebay split, but
| looking at Ebay's current strategy, the synergy was still
| there, so maybe they threw the baby out with the bathwater.
| jhallenworld wrote:
| From the FAQ: "What happens when you break your Palm(tm)
| organizer or 'accidentally' do a hard reset? Do you lose all
| your money?"
|
| Now in the age of bitcoin this could have a very different
| answer. In any case, the FAQ is very interesting.
| ericcholis wrote:
| And now, eBay is moving to accept more payments outside of
| PayPal.
| apples_oranges wrote:
| Sounds like a great place to work. I wonder about the "young
| people with extraordinary ability" however. Surely they would
| have also succeeded with "older people with extraordinary
| ability"? (ok they probably would cost them more..)
| itomato wrote:
| The opportunity is the paydirt.
|
| The experienced oldsters make up the sluice.
|
| The youngsters represent the water.
|
| Nobody worries much about the spillage if there's gold in the
| pan.
| fizwhiz wrote:
| what
| Croftengea wrote:
| I wouldn't want to work at a company with controversial
| business practices and "screw you we do what we want" attitude
| towards their customers, no matter what a great environment is
| inside.
| apples_oranges wrote:
| Depends on what you want of course, but I want to extract
| peak performance from myself that's why it sounds good to me.
| (I do not however like working overtime.)
| redis_mlc wrote:
| > controversial business practices and "screw you we do what
| we want" attitude
|
| Well, here we are. Paypal is a bank in Europe, but not in the
| USA.
| lmm wrote:
| I suspect that only young people can be that ruthlessly data-
| driven. Us older people tend to have experience that we're
| attached to, and a certain psychological resistance to the idea
| that the stuff we've been doing for most of our career was
| actually a waste of time.
| jedberg wrote:
| I would say it depends on the person. I personally assume
| that how I did things in the past is no longer the state of
| the art and I always look towards younger engineers or
| outside resources to figure out the new best way, informing
| my decision based on mistakes of the past.
|
| And if the data says I'm wrong, I trust it. I have no belief
| that I've already found the best solution.
| bitexploder wrote:
| I don't see how you can be a technologist in the long run
| without this attitude. Maybe this is the no true Scotsman
| fallacy, but one of the key aspects of technology is it
| will change right underneath you often. (Except SQL
| injection, apparently, the team keeps finding it at an
| alarming rate in modern apps).
| benja123 wrote:
| It really depends on the person. I am in my late 30s and
| experience has taught me that there is a good chance the way
| I am working today will be obsolete tomorrow. As a manager I
| embrace this and encourage the people in my team to bring new
| ways of thinking and working. The kind of culture this
| creates encourages constant experimentation which ultimately
| leads to better results.
| [deleted]
| vkk8 wrote:
| Older people with extraordinary abilities have, in traditional
| bureaucratic companies, learned that bullshitting and playing
| politics is the easiest way to succeed. When they internalize
| this way of working, there is no going back; it makes them lazy
| and cynical.
|
| Somehow, it requires a certain amount of naivety to _actually_
| try to solve a hard problem instead of pretending to do
| something and then write a 100 page bullshit report (or mostly
| copy an old report) on it.
| rkalla wrote:
| Worked there for 7 years - it's a fantastic place to work. It's
| all about relationships to get things done, but the people are
| generally fantastic and well-meaning.
| dilpreet_singh wrote:
| I believe the #1 reason is just the accumulation of really smart
| people in a place like silicon valley, at the time of infancy of
| internet. That makes things click like nothing else.
| SigmundA wrote:
| It also helps they went to Stanford together.
| dilpreet_singh wrote:
| Sure, and when smart people come together, great ideas are
| shared and rubbed together, which generates other great
| ideas. Plus, they have links to other interesting and smart
| people. So that collectively becomes a force.
| seriousquestion wrote:
| Has PayPal managed to maintain this culture since then?
| Tycho wrote:
| Great entrepreneurs maximize their impact by identifying and
| working with people who have great talent. I wonder, then, how
| many people of average ability will simply never encounter any of
| these legendary founder types, because the founders create this
| bubble around them and don't waste any time trying to co-operate
| with the rest.
| xrd wrote:
| Why is it that PG can't figure out getting the correct SSL
| certificate for his blog?
| bb101 wrote:
| Reads the same as Netflix. Individuals empowered to make
| decisions and execute, at all levels of the organization.
|
| With higher responsibility also comes the risk of exposing the
| company to situations that a more practised individual would know
| to avoid. It'd be interesting to hear about how these companies
| mitigate risk from their armies of ambitious underlings.
| gexla wrote:
| As the article mentioned, few other companies were hiring. The
| mentioned period was 2000-2002, which was during the carnage of
| the dot com crash. The economy was in a bad state. Maybe
| pushing hard to make the case for the start-up to exist in that
| environment was far riskier than any other mistakes they could
| have made along the way. Maybe you could say the same about
| start-ups today.
|
| Keep your focus on the first thing which will kill you.
| at-fates-hands wrote:
| >> Maybe pushing hard to make the case for the start-up to
| exist in that environment was far riskier
|
| Agreed 100%.
|
| All of my friends who were bragging they were going to retire
| at 25 millionaires and then three months later were flat
| broke. They were so disenchanted with the startup scene, they
| all went to work for big corporations.
|
| As I remember, nobody I knew wanted to work at a startup, let
| alone start a company in that environment. There was no money
| - VC or otherwise. You were left to bootstrap it yourself. If
| it had anything to do with the internet, you were toxic so
| even getting clients to support you was insanely hard.
|
| The fact they came out of that crazy time and were able to
| prosper against all of those odds is really impressive.
| lifeisstillgood wrote:
| There is something nagging at me - it is something deep. It is
| that there has to be a set of values, a set of cultural red lines
| that we do not cross.
|
| Every branch of the military will happily tick pretty much all of
| those "do it now, don't let anything stop you" boxes.
|
| But every branch of the military has in place very deep redlines
| (sometimes expressed as rules of engagement, sometimes as
| "honour") - because they know the horrors of crossing those
| lines, with a "get it done at any cost attitude".)
|
| Most humans have that ability to get things done, they just tend
| to work for organisations that don't reward it. And so the onus
| is on management (as ever). Build a culture that rewards
| innovation - but has some set of values that accepts some lines
| cannot be crossed.
|
| Yes there is danger in retreating from the edge of chaos - but
| then we all live in Ming China. That is a better problem than
| going too far over the eve of chaos.
|
| it's hard, for companies as well as societies.
| spockz wrote:
| I agree with your first bit, without boundaries we will get a
| runaway system. But what does the reference to Ming China mean?
|
| > Yes there is danger in retreating from the edge of chaos -
| but then we all live in Ming China. That is a better problem
| than going too far over the eve of chaos.
| oblio wrote:
| I wonder if OP isn't confusing Ming China with Qing China.
| The Ming dynasty had a period of exploration and then it
| stopped, but not because it closed itself off, just because
| it was becoming unstable.
|
| Qing China is the one that famously closed itself off from
| the world.
| lifeisstillgood wrote:
| The Ming dynasty (late 1300 - mid 1600 ish) started well
| but for very unclear and contentious reasons ended ship
| based trade (famously burning records and ships - including
| ones that may or may not - probably not - reached America).
| They did turn inwards - but that was fairly fine - China at
| 1400 was at the technological peak, life was pretty good
| for the average peasant, frankly it was about as good as it
| ever got before industrialisation.
|
| Like the T-Shirt says, when you are this good, why try
| harder.
|
| The most advanced civilisation on the planet simply sat
| back in 1400, and no-one could do anything about it because
| the place was one fairly unified political system.
|
| (yes, wars rebellions etc, but one China - maybe broken at
| times but always seeing itself as one, not competing to
| beat the other part but competing to unify again.
|
| Probably it's fair to say that China always fought itself,
| and Europe fought each other.
|
| (There is also something about how China unified and grew
| in waves related to the latest horse invaders. A sort of
| unified and strong when the invaders attacked, weaker when
| the threat retreated. Once gunpowder was invented that
| process was effectively over - you could mow down horse
| archers happily all day. So again, China had no external
| threats so it could turn inwards. And take all of this as a
| massive over-simplification but it's interesting to realise
| the end of the horse invaders coincided with gunpowder and
| the turning inwards)
| oblio wrote:
| True, but as far as I know we don't have any official
| documents, mandates, about this turn inward.
|
| While for Qing we have a ton of proof about this policy.
|
| I'd definitely use Qing as the archetypal example of
| isolationism. Especially since Qing was the absolute peak
| of China in terms of territorial expansion, global
| influence, share of the world economy. Qing China in 1650
| - 1700 truly had no rival.
| lifeisstillgood wrote:
| Fair enough - to be honest I got all excited about the
| gunpowder timeline. Poor historian I would make.
|
| The general point about living on the edge of chaos and
| it falling in either side still stands - although if you
| do fall, falling like the Ming / Qing is waaaay better
| :-)
| guenthert wrote:
| I found this glorification of PayPal a bit befuddling. I use
| their service myself often, but chiefly because the banking
| system in the USA is so hideously backwards (more so ten years
| ago). In Germany for example, if a private party would want to
| pay some other private or commercial party, they would use a
| bank-to-bank transfer, which completes in less than 24h. This
| system was used even before the WWW. I payed the office of a
| "Mitfahrergemeinschaft" (office of a ride sharing organisation)
| via phone in the early nineties (that's when I learned that
| nobody looks at the signature of the bank-transfer requests sent
| via snail mail unless there is a complaint).
|
| So I'm not quite convinced that PayPal was all that innovative,
| but they did fill a void here.
| kubanczyk wrote:
| > you'd do your homework first and then come to the table with
| "35% of our [insert some key metric here] are caused by the lack
| of X functionality"
|
| Tangential, how do you decide whether to collect a new metric?
| Use data-driven thinking? But how, you don't have data until you
| invest in building that collector.
| sherlock_h wrote:
| Number 1 definitely. Focus is super important.
|
| Second to this I'd put good hiring. I have seen companies that
| try to follow these models without rigorous recruiting or hiring
| processes. It results in a huge mess because management has these
| massive expectations but the people they hire just aren't good
| enough. As a result, everyone gets demoralized
| the_arun wrote:
| 1. Eat our own dogfood : Makes us more empathetic with our
| customers
|
| 2. Eat other food as well OR do not limit ourselves to our own
| dogfood : This can help greatly in shaping our products better
| and in providing seamless experience migrating customers from
| competitors to our product.
| troelsSteegin wrote:
| How did projects get staffed? Was that senior mgrs allocating
| staff to winner proposals? The article mentions "Most great
| innovations at PayPal were driven by one person who then
| conscripted others to support, adopt, implement the new idea.". I
| am wondering how "conscripted" worked. It also mentions "Vigorous
| debate, often via email: Almost every important issue had
| champions and critics. These were normally resolved not by
| official edict but by a vigorous debate that could be very
| intense." It looks like David Sacks was successful at shaping a
| product-driven culture there. Is the implication that innovation
| and project allocation was coming out of "product"?
| zmmmmm wrote:
| Sounds reminiscent of Google - where staff gravitate to the teams
| they want to work on - but "done right", ie: with accountability.
| On the other hand, I wonder if it produces some of the same
| problems - who takes responsibility for long term maintenance
| when everybody's a hero creating bold new things?
| saucymew wrote:
| As much as I respect the founders/alumni that came from PayPal,
| do any of them still use it?
|
| Forced to use PayPal since 2004 as a small business owner, it was
| impossible to reach their customer support. They've also left me
| to fight with insurers when it came to fraudulent transactions.
|
| Glad to hear they built a talented team, but as a customer...
| DavidAdams wrote:
| Speaking as a payments industry insider, it's surprising to me,
| but PayPal payments represent a huge proportion of online
| payments, and they're on an uptick. I'm not sure why.
|
| I mostly use PayPal when there's some kind of promotion that
| gives me an incentive, such as extra credit card rewards, or a
| cash back offer. I think a lot of people find it convenient to
| use PayPal for ecommerce because they don't have to get their
| credit card out, just enter their PayPal password.
| analog31 wrote:
| I'm a PayPal merchant. First of all, I'm sure the choice of a
| payment service depends a lot on the specific nature of your
| business. I run a completely analog business, selling a
| gadget that I make at home, to a relatively small niche of
| enthusiasts, strictly in the US.
|
| I do look around once in a while, for what the alternatives
| are, but so far PayPal is the only service that lets me run
| my business from a passive web page. I don't even have my own
| URL. Every other service seems to have a tutorial showing me
| what code to install on my server, but frankly hosting and
| maintaining a server (at home or in the cloud) seems like it
| would add a dimension of complexity to my business that I
| don't want to deal with. I certainly don't want to be
| responsible for handling and storing my customers' credit
| card numbers and similar data.
|
| I also think that the customer protections are beneficial,
| since they give people the confidence to buy from a
| relatively unknown seller.
|
| On top of that, they have a deal with the USPS that lets me
| generate a first class shipping label, which isn't even
| available at the USPS website. What I save on postage more
| than covers the PayPal fee.
| maxsilver wrote:
| > (PayPal is) on an uptick. I'm not sure why.
|
| One thing PayPal does well is have all the features you 100%
| depend on, already running well. The UX is kind of terrible,
| but it's at least all there. As a PayPal purchaser, I can
| enforce a specific shipping address, or a specific source
| payment method, change it constantly at will, and the seller
| mostly can't mess it up (PayPal enforces it on my behalf). I
| can sign up for a subscription, cancel it, all from PayPal's
| side, and the seller literally _can 't_ control that
| experience or block me from doing that (PayPal enforces that
| on my behalf too). I can even dispute a transaction with one
| click (although I've never needed to, so I don't know what
| happens after that).
|
| I also have a Visa, MasterCard, Amex, Discover, and Simple,
| and Venmo. Some of these other credit card merchants or cash
| services have _parts_ of these pieces _half_ implemented.
| (There are 'fake/disposable' cc numbers and such that try to
| replicate the 'cancel anytime' thing. You can definitely call
| a credit card company to block future transactions from a
| specific company). But to my knowledge, no one else actually
| has the whole minimum-featureset-for-purchasing figured out
| and accessible with just clicks online. PayPal does. And
| they've had it, consistently, for almost a decade.
|
| ---
|
| So, as a person who writes eCommerce stuff all the time, I
| get why folks in the industry is sick of it. (It's duplicate
| steps, we always have to do "real credit cards" merchant, and
| also a separate "PayPal" integration)
|
| But as a purchaser, I _always_ prefer the PayPal option,
| rather than handing over a Credit Card to their Stripe
| /Square/whatever merchant service -- especially for anything
| with recurring billing. I get why other folks prefer it as
| well.
| zmmmmm wrote:
| I'm similar: simultaneously aware of the huge problems with
| PayPal and yet will _always_ choose it for small
| transactions. Why? Probably mostly because of the address
| filling you mention. Having to type in my entire address,
| worry about whether it 'll get screwed up or it will not
| support my country or whatever else is just too much
| trouble for microtransactions (<$10). And then, even while
| I'm aware of the problems with their fraud detection, it
| gives me comfort that they are erring on the side of
| shutting down vendors that look shady - even if that takes
| out a portion of real vendors or creates huge problems for
| them.
| jhallenworld wrote:
| I sell on Tindie- non-US customers have big complaints about
| PayPal (Tindie's only option at the moment): the money currency
| conversion is a rip-off. Many in Europe have moved to
| TransferWise and Tindie seems to be working on it:
|
| https://wise.com/us
|
| I also sell on eBay: they direct deposit into my bank. I have
| no idea what happens with international orders.
| xibalba wrote:
| Musk has been openly and repeatedly critical of how PayPal blew
| it. Tbf, I use PayPal pretty regularly and it works just fine
| for me.
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