Chapter 518 Paypal
San Jose.
Confinity corporate headquarters.
Confinity, founded in 1999, was no different from other Silicon Valley startups, with only a simple idea and a small amount of funding.
Stanford graduate Peter Thiel and Max Lefkin of the University of Illinois at Urbana-Champaign saw the growing adoption of PalmPilot and other handheld computers and wanted to offer users the ability to store encrypted information on their PDAs.
But they soon realized the idea had limited commercial value and terminated the plan.
At the same time, they found that there was a gap in effective user-to-user payment. The previous way was to write checks, but the clearing time was long and there was a possibility of bounce.
They founded Confinity, which allowed people to transfer small amounts of money to each other using PDAs, and soon moved to the Internet platform, allowing all Internet users to transfer money to each other.
The two geniuses got together and soon obtained $3 million in start-up capital from Nokia. They then found four like-minded partners. Together, the six of them worked hard towards their dreams and future.
Now they don’t know that the cause they are fighting for will be worth 210 billion US dollars in 20 years.
It was almost noon. Peter Thiel, who had just spent the whole morning typing code, glanced at the hamburger restaurant across from his office and said to Pan Yu beside him, "What do you want to eat for lunch today?"
Pan Yu followed Peter Thiel's gaze and looked at the hamburger shop outside. He smiled and said, "Are you thinking about that super hamburger again? I think it's not a good idea to keep thinking about it. You should just eat it once! Isn't it just $168?"
Peter Thiel said, "It's only $168. Pan, you know what? An ordinary burger there only costs four or five dollars!"
Pan Yu smiled and said, "You want to eat it, don't you? Besides, if you buy this hamburger set, the store will give you a bottle of red wine."
Beat Thiel couldn't help swallowing his saliva, then looked away with difficulty and said ambitiously: "If one day our company's IPO is successful, I must buy the most expensive one to try and see if it is the most delicious."
Pan Yu from Xiaguogui Province, one of the six founders of Confinity, laughed and said, "When the time comes, you should talk to the store and change the name of the burger to IPO burger."
Peter Thiel had a headache and said, "It's difficult. Our company wants to go public, but we don't know when it will go. The stock market has fallen so much that our financing has been hindered. We are lucky to be able to survive."
After hearing what Peter Thiel said, Pan Yu couldn't help but sigh: "Yeah, our competitors are not quiet either, and the pressure from investors is getting greater and greater."
Although he is mainly responsible for technical work , after more than a year of entrepreneurship, Pan Yu is no longer the rookie staying in the ivory tower. Naturally, he is worried about some situations in the capital market.
Although Confinity is currently enjoying a good development momentum, it is not without competitors in the market.
The largest competitor among them is Elon Musk's X.com.
"How about, Peter, let's talk to Musk and merge our two companies."
When Peter Thiel heard this, his already protruding eyes widened even more, as if they were about to fall out of their sockets at any time, and his voice rose eight octaves: "What did you say?"
Pan Yu was startled and thought Peter Thiel was angry, so he quickly laughed and said, "Haha, it's nothing, I was just joking, don't take it seriously."
Peter Thiel stretched out his hands, grabbed Pan Yu's shoulders, and said excitedly: "Your suggestion is great! If successful, it can solve most of our company's problems!"
Pan Yu: “???”
He just mentioned it casually, but he didn't expect Peter Thiel to be so excited.
He was about to speak when a staff member walked into the office and reported: "Boss, a young man with an oriental face came to visit our company."
When Peter Thiel heard that the man was from Asia, he said to Pan Yu, "Go find yours."
Pan Yu had a puzzled expression on his face: "No friend told me that they would come to see me today."
at this time.
Outside the gate of Confinity.
Lu Yiming is talking to Bill Gates on the phone.
"You are really well-informed. I just left the house..."
"Don't worry, I came to California to invest in an interesting Internet company. I don't plan to run away. Besides, I haven't committed any crime. If I really run away, wouldn't that be considered absconding from the crime?"
Bill Gates heaved a sigh of relief when he heard that Lu Yiming was not planning to run away. After all, he had just served as Lu Yiming's guarantor for bail. If Lu Yiming ran away, he would lose face.
"Which company are you interested in? And why are you going to California? Technology stocks are falling so badly now, aren't you afraid of losing a lot of money if you buy it?"
Lu Yiming said calmly, "The tech stocks plummeted because there were too many bubbles. Although most of the companies are garbage, there is still a lot of gold in this huge mountain of garbage. What I'm interested in is a company that specializes in online payment services."
He didn't intend to hide this from Bill Gates.
If you want to make it in the United States, it is very important to have a good relationship with Bill Gates. After all, many things require "locals" like them to handle.
“Online payment?”
Bill Gates was a little surprised and didn't know why Lu Yiming was suddenly interested in this kind of thing.
However, he did not take this matter to heart.
These days, the prospects for online payments are unclear, but there are countless companies working on this.
The financial industry in the United States is very developed, and the various services provided by banking institutions are very complete, so many people do not actually have a strong demand for online payments.
What's more, in the eyes of most investors, banks are the main force in this payment-related business.
How can a group of fake Internet companies with no background or backing compete with banks?
Lu Yiming smiled and said, "Yes, how about it? Are you interested?"
Bill Gates said bluntly: "Not interested, you can play slowly, I have something else to do, so I'm hanging up now."
He called just to confirm that Lu Yiming had not run away directly and would not embarrass him in the Ministry of Justice. Now that it was confirmed that Lu Yiming had not run away, he would naturally let Lu Yiming go.
After finishing the call with Bill Gates, Lu Yiming briefly told Li Yiwen about the content of their conversation.
Li Yiwen said: "I think it makes sense for Bill Gates not to play. Investing in Confinity is too risky and there is really no need for it."
Lu Yiming raised the folder in his hand and said, "Before coming here, I also thought this company was ordinary, but after reading the information in my hand, my mind has completely changed."
When Linus Benedict Torvalds and Lu Yiming mentioned Confinity, Lu Yiming had no impression of it. But after seeing several founders of Confinity, Lu Yiming finally realized that this company was actually the famous PayPal in the future!
With a market value of 210 billion US dollars and nearly 325 million users worldwide, it integrates internationally popular payment methods such as credit cards, debit cards, and electronic checks. It serves more than 200 markets and supports more than 100 currencies.
In cross-border transactions, nearly 70% of online cross-border buyers use PayPal to pay for overseas purchases.
There is no doubt that this is an Internet company with huge potential!
Even though Lu Yiming's identity as a Xia Chinese meant that he could not hold PayPal shares for a long time, it was also a good idea to make a short-term investment. In October 2002, PayPal was acquired by eBay, the world's largest online shopping company, for US$1.5 billion.
Invest a little money now and you can earn it back with interest in the future!
After waiting at the company gate for a while, Lu Yiming and Li Yiwen were invited into the company and soon met Peter Thiel and Pan Yu.
As soon as the two saw Lu Yiming, they recognized him immediately.
After all, he’s on the news every day. He single-handedly brought Silicon Valley to the ground, so it’s impossible not to know him.
"You are, Mr. Lu?"
Peter Thiel was a little panicked. After all, Lu Yiming was now considered to have a "bad reputation". He didn't know why Lu Yiming suddenly came to visit his company.
Lu Yiming nodded slightly and said kindly, "Yes, I am."
Pan Yu smiled and shook hands with Lu Yiming, saying, "I didn't expect Mr. Lu to come to our company as a guest. I'm sorry for the disrespect."
Lu Yiming got straight to the point and said, "I won't waste any more time talking nonsense. Let's get straight to the point. Okay. I'm optimistic about Confinity and I want to invest."
Peter Thiel and Pan Yu looked at each other, but neither of them spoke.
Lu Yiming knew what they were worried about. After all, he was now notorious for shorting the US stock market, especially in Silicon Valley, where he was simply a nightmare to all.
But Lu Yiming is not without advantages - he has money.
Since the two of them didn't speak, Lu Yiming continued, "Internet companies have a clear head effect and the winner takes all, so if Confinity wants to survive in the fierce market competition, it must seize market share as quickly as possible. And this requires continuous spending of money. Coincidentally, you are short of money, but I am rich."
Peter Thiel fell silent after hearing this, obviously thinking about whether to agree to Lu Yiming's investment.
While taking advantage of this moment, Lu Yiming looked curiously at Pan Yu, who was also from Xia Country.
Pan Yu joined Confinity in 1998 and became one of the six founders. Although he still looks like a nerdy college student, he is now a senior software engineer responsible for compiling and implementing Paypal's first generation flagship product.
He also used innovative network technologies and sophisticated computer programming skills to continuously find new ways to revolutionize the drive traffic of the World Wide Web, allowing Confinity users to receive and transfer payments online securely and easily.
What's this?
This is a technical master!
The more Lu Yiming looked at him, the more envious he became. Compared to a marketing genius like Peter Thiel, he was more interested in a technical genius like Pan Yu.
After all, he comes from the future and is the best product manager in the world. He knows what will become popular, but what is lacking is people who can make the products.
Seeing that the two hadn't spoken yet, Lu Yiming asked Pan Yu in Chinese: "I remember you seem to be from Xia country, right? Where is your hometown?"
Pan Yu said: "I am from Guangxi Province. I immigrated to the United States with my family. After graduating from university, I started a business with a few classmates."
Lu Yiming asked: "Are you interested in going back to China to take a look?"
Pan Ning hesitated for a moment and said, "If there is a chance, of course I want to go back."
Lu Yiming said: "In fact, Xiaguo has developed very fast in recent years, especially in the field of computers and the Internet. The country attaches great importance to it. If you go back, you will also have the opportunity to show your talents."
Peter Thiel, who didn't understand Chinese, had no idea that Lu Yiming was poaching his employees right in front of him.
Otherwise, I would be so anxious that I would jump up and down.
You know, Pan Yu is the only senior software engineer in the company and the absolute core of the technical department. If he is poached, it will not be easy to find someone to replace him!
It has to be said that in the field of Internet payment, the United States is once again ahead of the United States.
Before the emergence of PayPal, online payments in the United States were very troublesome. First, users had to have a PAD, or handheld computer.
But PayPal is different. The payment method has become simple and efficient. Users no longer need a handheld computer to complete the operation. They can transfer money to anyone by sending an email. Even if you don’t have an account, as long as you know the other party’s email address, you can transfer money successfully.
Although it still seemed troublesome to Lu Yiming, it was already done very well compared to the previous cumbersome steps.
At present, the PayPal payment system has been online since 1999, but its promotion has not been very smooth, and the growth in the number of users has even shown signs of slowing down.
Because they have many competitors, such as X.com, which is only four blocks away from Confinity. Elon Musk is very good at operations. The two sides are fighting fiercely in the field of Internet payment, and neither can completely defeat the other.
Here, Lu Yiming had just finished talking to Pan Ning when Peter Thiel said, "Sorry, Mr. Lu, I'm afraid we can't accept your investment. After all, your reputation is not very good."
Lu Yiming is now on the blacklist of many Internet companies, such as Amazon and eBay, which were shorted by Saltwater Fund.
Especially eBay. Now PayPal can only survive by relying on eBay. After all, as a payment software, you have to have people using it, right?
eBay is currently the world's largest C2C e-commerce platform with the largest number of potential users, and is the basic base that PayPal must seize.
If eBay accepted Lu Yiming's investment, would it still choose to use PayPal as a payment method?
This is something Peter Thiel has to consider.
Lu Yiming had just read the information and knew that eBay was PayPal's main customer, so he smiled and said, "Are you worried that eBay will dump you after I invest in it?"
Peter Thiel was straightforward and said, "Yes."
Lu Yiming said: "You don't have to worry about this. After all, whether you accept my investment or not, eBay will not tolerate your existence. In fact, eBay has not given up on developing its own payment system."
This is actually natural. Just like Jack Ma created Taobao, he will definitely create Alipay. For an e-commerce company, handing over the transaction system, its lifeblood, to others, is no different from committing suicide.
Peter Thiel's expression became solemn upon hearing this, and he did not refute Lu Yiming's words, because this was the fact and could not be refuted.
Lu Yiming continued, "So what you should think about now is how to defeat eBay's proprietary payment software , and this requires money, a lot of money. As a payment software, PayPal is undoubtedly excellent, but excellence alone is not enough, you also need to gain more users. Of course, the most important point is to continue to maintain the original free strategy to ensure your competitive advantage."
Whether it is spending money on promotional activities to attract more users to register PayPal accounts, or maintaining a free strategy to retain these users, it requires spending money.
But at this critical juncture, the financing environment for Internet companies is poor. How easy is it to continue to defraud money from investors?
"I just said that you need money, and I have money. I am optimistic about your future, but you are not doing well enough now. I have a way to make you better."
Peter Thiel was persuaded by Lu Yiming, and he said, "I may need to discuss this matter with the other co-founders."
Lu Yiming knew that he couldn't get the upper hand in a hurry, so he took out two business cards, gave one to each person, and said calmly, "No problem, it's my duty. You can contact me after you have discussed it."
Lu Yiming was not in a hurry at all. Although PayPal was awesome, if they didn't agree, he could go directly to Elon Musk.
After Lu Yiming left, Peter Thiel, as CEO, quickly convened the other five veterans of the company.
Kenny Howery as CFO, Max Levchin as CTO, Yu Pan and Ross Simmons as senior software engineers, and Luke Nosek as vice president of marketing strategy.
Peter Thiel got straight to the point and said, "Mr. Lu Yiming came to our company today and said he wanted to invest in us. What do you think?"
Ross Simmons said: "I don't think so. A profit-seeking capitalist like him will definitely not understand and agree with our ideas."
Pan Yu said: "He has won the ACM International Collegiate Programming Contest and is a software engineer. I heard that he gets along well with Torvalds. He is not a Chinatown capitalist who doesn't understand Internet technology."
Several people were a little stunned. They really didn't know whether Lu Yiming was a software engineer.
Peter Thiel said: "We only have 10 million US dollars left in our account now, which is only enough to last for two months. The gap is too big."
Pan Yu also said: "eBay has never given up and wants to kick our payment system out. In order to maintain our current market position and share, we need more advertising funds."
"Yeah, actually we don't have a choice."
In the end, after some discussion, everyone had to bow to reality and decided to accept Lu Yiming's financing.
