PayPal cofounders Max Levchin and Peter Thiel used to be intensely competitive with one another. They would race to solve math problems and occasionally race each other by foot. After they sold PayPal, they found themselves in another contest: Who would be first to become a billionaire?
[Disclosure: Thiel is a Pando investor via Founders Fund]
When I first got to know the two in 2006, Levchin had admitted defeat, in that contest at least. He was slogging away to build Slide– which didn’t do too shabbily, at least for a company whose product is no longer in existence. It was at one time valued north of $ 550 million and eventually sold to google for $ 228 million.
Meanwhile, Thiel made one of the earliest bets on Facebook, and very soon all that paper wealth would turn into actual money. He knew it, Levchin knew it, everyone knew it.
Much had been written about the insane financial success of the PayPal mafia, which seems to have had its tentacles in most successful consumer web and social media companies of the last 15 years. But a lot of the PayPal mafia has made their money as investors. Roelof Botha has become one of the top investors at Sequoia Capital, during a resurgence of the firm that has seen bets on Dropbox, Whatsapp, and Airbnb. Thiel, Luke Nosek and Ken Howery built Founders Fund. Keith Rabois is at Khosla Ventures, where he too lends a “co-founder” credit to companies from time to time.
But given all that investment success, the raw net worth of ex-Paypallers only tells one part of the story. It doesn’t tell us how successful they’ve continued to be as entrepreneurs.
It was reported yesterday that Palantir Technologies, an intelligence contractor co-founded by Thiel, is raising $ 500m at a $ 20bn valuation. As Buzzfeed put it, that makes it the third most valuable startup in the US.
When it comes to second (and third) acts as company founders (or co-founders), how do other members of the PayPal mafia stack up?
Peter Shankman is an author, entrepreneur, and speaker, recognized for his expertise in customer service, social media, PR, marketing, and advertising. He founded Help a Reporter Out (HARO), the largest free source repository for journalists in the world, as well as The Geek Factory, a marketing, branding, and PR company based in New York City, with clients worldwide.
Here are just a few highlights from our conversation:
To make customers love you, you first have to love your employees (04:38): “You have to appreciate your employees. You really do. You have to appreciate your employees—who they are, what they do. If you can do that, then it’s much easier to create zombie loyalists out of your customers because your employees are already happy and they want to do great things. They want to help. One of the biggest issues I hear all the time is employees who say they don’t have the empowerment to do anything. They’re not empowered to make the decision. They’re not empowered to help you. If you give your employees trust, and you trust them to do great things, they will share it with the world.”
Don’t hire for skills, hire for people (08:28): “Really, you have to hire for people. Ritz Carlton does this really well—they hire for people. They don’t hire you because you know how to fold a bed sheet. They can teach you how to do that. They hire you because you’re an empathetic person who understands that [the hotel business] IS about the person. And if you give the employee the ability to make mistakes, and tell them they’re not going to get in trouble for trying to please a customer, chances are they’re not going to make those mistakes…. Giving an employee the ability to do that usually reaps tremendous benefits. You have to trust your employees, and that starts by hiring the right people.”
To make way more money, you only have to be a tiny bit better at customer service (11:04): “Just do what you say you’re going to do, and that’s it. and if you really want to have fun, go above and beyond once, but that’s it. My favorite story about Morton’s (when they brought a steak to the airport), they don’t have to do that for everyone. But when you call Morton’s, they ask you if you’re celebrating anything, and if you say yes they put your name on the menu when you show up, or your wife’s name or your kid’s name or whatever. It’s the greatest thing in the world, and people tweet that, people post that. And we’re moving into an era where it’s going to be entirely about that. It’s not going to be about Yelp or TripAdvisor. It’s going to be about what you can do to explain to people ‘hey, I had this great experience,’ and then that shows up as people are looking at where to go eat.”
Kerry O’Shea Gorgone is instructional design manager, enterprise training, at MarketingProfs. She’s also a speaker, writer, attorney, and educator. She hosts and produces the weekly Marketing Smarts podcast. To contact Kerry about being a guest on Marketing Smarts, send her an email, or you can find her on Twitter (@KerryGorgone), Google+, and her personal blog.