Peter Thiel on pivoting and PayPal’s early failure

“When we started PayPal, the initial product was an infrared-beaming device on Palm Pilots for sending money. It was voted one of the 10 worst business ideas in 1999. And 1999 was a year when there were many bad ideas in technology… But the team was good… It’s not like you only get one chance. You get many chances so long as you keep trying. If you get hung up on failure, and if you think you don’t have another chance, that’s when you really don’t.”

One lesser-known fact about the PayPal pivot is that the idea didn’t come from the cofounders, Peter Thiel and Max Levchin.

It came from David Sacks who was fresh out of Stanford Law School and a one year stint at McKinsey. Sacks was the one who finally persuaded a reluctant Levchin that beaming money between Palm Pilots was a bad idea. Instead, he argued, they should focus on sending money via email.

A talented team and getting multiple shots on goal turned out to be the difference between startup failure and a $1.5 billion exit to eBay.

Full video: CBS News “PayPal's early failure“ (May 2012)

More popular advice from Peter Thiel

Peter Thiel on how to identify great talent “You want people who are both really stubborn and really open-minded. That’s a little contradictory. You want people who are sort of really idiosyncratic and really different, but then who can work well together in teams… If you focus too much on one end of it, you tend to get it completely wrong… [I like to look for] these combinations of unusual traits.” (full article).

Peter Thiel on Elon Musk’s success: “Maybe the rest of us are too risk averse” “If one of the two companies had succeeded, you would say, well, maybe he got really lucky. But when two out of two companies that people thought were completely harebrained in the 2000s - when they both succeed, you have to reassess it. Maybe the rest of us are somehow too risk averse or there’s something about risk he knows that we don’t.” (full article).

Peter Thiel: Think of the future on three horizons “What you end up doing when you think of the future as indefinite is you pick a job that will be good on your resume because it will then lead to a different job later on.” (full article).