Chapter 519 You understand technology
In the conference room of Confinity's headquarters, Lu Yiming saw all the founding team members of Confinity.
"Mr. Lu Yiming, after careful consideration, we have decided to work with you," Peter Thiel said to Lu Yiming.
Lu Yiming smiled and said, "I believe this is the most correct decision you have made. I can help you defeat all your competitors. I have said before that I am optimistic about your future. So, name your price."
Several other shareholders of Confinity who had never met Lu Yiming all showed curiosity about Lu Yiming. This Xia countryman who had been stirring up trouble in the U.S. stock market in recent times was too young and did not fit their perception.
Pan Yu asked, "Mr. Lu, I actually have another question. As you know, we are a payment channel and we want to cooperate with content providers. If we accept your investment, companies like eBay will most likely refuse to cooperate with us and choose other payment solutions. How do you want to solve this problem?"
Accepting Lu Yiming's investment is now the consensus of Confinity. After all, the company can no longer attract investment. If there is no money to burn, it will only be a matter of time before it dies. However, accepting Lu Yiming's investment will bring another problem - what if no one uses PayPal? At that time, the company will have to close down - after all, Lu Yiming has offended too many companies in the US stock market. In the past half month, many companies have lost a lot of money because of Lu Yiming.
Lu Yiming said confidently: "Didn't I just say that? I can make you defeat all your competitors. As long as you are the only option, who else can they find to cooperate with if not you?"
What Lu Yiming said made so much sense that everyone present was speechless and didn't know how to refute it.
Ross Simmons said: "Mr. Lu, words are not enough, why do you think you can help us do all this?"
Lu Yiming asked back: "If I can't do it, why would I spend money to buy shares in your company? Is it just to burn the extra money?"
Ross Simmons: "..."
What you said makes so much sense that I am speechless.
Peter Thiel said, "Mr. Lu, according to our discussion, we are willing to offer 20% of the company's shares for 30 million US dollars. I wonder if you can accept this price?"
Lu Yiming didn't even think about it and said immediately: "No problem."
When everyone heard this, they looked at each other in surprise, and they all had a common idea in their hearts.
Isn't it sold too cheaply?
In fact, this price was already raised after their negotiation. After all, given Confinity's current situation, it's hard to say whether the company's total value can reach 30 million US dollars in a while.
Unexpectedly, Lu Yiming agreed so readily.
This makes them doubt their lives.
What about the agreement that you would pay me back on the spot even if the asking price is sky-high?
You don't play by the rules.
Seeing everyone's expressions, Lu Yiming couldn't help but laugh and asked, "What? Are you reluctant to sell it again?"
Once words are spoken, they cannot be taken back. Although she had some complaints in her heart, she had already said it. It would be a big taboo to go back on her word on the spot. Besides, 30 million was definitely not a loss. If she raised the price and Lu Yiming didn't buy it, she would not be able to get the 30 million, which would be a big loss. After all, everything now depended on Lu Yiming's mood, and she would never dare to offend him.
"Sell it, of course."
"So what are you waiting for? Let's sign the contract now."
One shouted a high price and the other didn't bargain, so the transaction went smoothly.
The reason why Lu Yiming was so straightforward was because he knew very well that this price was definitely a bargain!
Although he didn't know how Confinity survived the crisis in the past, he knew that in his time, PayPal was almost the Alipay of the Western world. This 20% stake was estimated to be worth $200 million in two years.
From the perspective of rate of return alone, a tenfold premium is nothing to Lu Yiming, but the greatest value of Confinity is not the PayPal payment software itself, but the group of geniuses in front of him.
After PayPal was acquired by eBay for $1.5 billion, the core members of Confinity quickly resigned and scattered.
They received very generous rewards, but they did not wave big checks and live out the rest of their lives on a Pacific island. Instead, they devoted themselves more actively to new careers and achieved results that shocked the world.
Elon Musk founded SpaceX and Tesla. SpaceX is a space exploration technology company that has successfully launched a rocket and recovered a first-stage rocket, creating a first in human space history and greatly reducing the cost of human entry into space. Tesla became the most sought-after electric car in the first twenty years of the 21st century, and has gradually expanded into clean energy businesses such as Powerwall energy walls and solar roofs.
Reid Hoffman founded LinkedIn, the world's largest professional social networking site and a social network for business customers.
Steve Chen, Chad Hurley and Wade Karim co-founded YouTube, the world's largest video website with more than 1.5 billion users.
Jeremy Stoppelman and Russell Simmons founded Yelp, the largest review site in the United States.
David Sacks founded Yammer, an enterprise social networking service.
Max Levchin created Slide, which was later acquired by Google for $200 million.
Prema Shakur drives a nonprofit peer-to-peer lending business that lends money to very low-income businesses in developing countries.
Botha joined Sequoia Capital, a top venture capital firm in Silicon Valley , as a partner.
Keith Rabois served as the technical operations officer of Square, a well-known mobile payment company. He was the second-in-command of Square and greatly promoted the development of the company.
Peter Thiel, the boss of the PayPal gang, manages a hedge fund with a total capital of $3 billion and is an investor in hundreds of companies including Facebook, Yelp, Linkedin, SpaceX, Airbnb, Palantir, Zynga, etc. An early investment of $500,000 in Facebook was worth about $1 billion ten years later.
Overall, the members of the PayPal Gang who later left PayPal have achieved astonishing success in various industries and control a large part of the wealth and power in the IT and Internet fields.
For Lu Yiming, the money he earned from selling PayPal to eBay is just a little pocket money at most. If he builds good relationships with these great guys, there will be plenty of opportunities to make money in the future!
If you invest a little in the above-mentioned companies, you can make a lot of money.
After everyone signed various documents, Lu Yiming did not leave immediately, but took the opportunity to discuss .
In order to get closer to them, Lu Yiming did not even put himself in the position of an investor, but talked to them like a friend: "I think the Internet is the general trend of the future, and online payment software is a brand new model different from bank transfers and cash transactions."
As soon as they started talking about the Internet, both sides immediately found a common topic.
Peter Thiel seemed very happy. After all, it was very difficult to find an investor who could agree with PayPal's core concept. So he couldn't help but complain: "Although Nokia gave us the initial investment, it recently refused to continue to provide financial support because we didn't find a profit model. They only think about how to make money."
Lu Yiming sympathized with Peter Thiel's complaints: "I have started my own business, so I know the nature of these investors. Although making money itself is not a bad thing, it is tantamount to killing the goose that lays the golden eggs if you want a company that is still in its growth stage to make a profit as soon as possible."
Ross Simon immediately looked at Lu Yiming with new eyes and praised him, saying, "Mr. Lu, you understand technology."
Lu Yiming glanced at Ross Simmons and then said, "So I won't make any requirements on when PayPal will be profitable. I just hope that you can expand as soon as possible after getting my investment. I need more registered users and active users."
"That's what I thought."
Peter Thiel has never met an investor as easy to talk to as Lu Yiming.
Investors who don’t care about profits are good investors!
Other people in the company also began to feel satisfied with the deal.
Without the pressure of profit, they can focus more on technology.
As for attracting new users, now that the technical problems have been solved, are you still worried about not having new users?
Lu Yiming suddenly said, "The company's name is Confinity, but the payment software is called PayPal. This is too troublesome. I think it would be better to unify the two. How about calling it PayPal? This name is easy to pronounce and remember."
Such a simple request, coupled with Lu Yiming's well-reasoned words, Peter Thiel immediately nodded in agreement, and then continued: "For the subsequent development of PayPal, I plan to use the 'hamburger strategy'."
"Hamburger tactics?"
Lu Yiming was a little confused.
What is this?
Suddenly I touched upon a blind spot in my knowledge.
Lu Yiming thought this was some kind of business model in the United States.
After all, the American people are very playful, so it's not surprising that they come up with all kinds of weird tricks.
Peter Thiel explained: "The so-called hamburger strategy means that we plan to spend the money that can buy a hamburger to attract young users to use our payment software. As long as they introduce more family and friends to register our accounts, they can get this reward."
Lu Yiming finally understood it now. It was nothing more than the old Internet trick of burning money to gain market share. The rewards users received were not much, just enough to buy a chicken leg or a hamburger, but people always like to take advantage of small bargains.
As long as the software itself has good functions, users who are attracted by a hamburger or a chicken leg can stay and continue to create value.
The profits brought by this will definitely exceed the original payment for hamburgers and chicken legs.
This is how you attract new customers on the Internet in the 21st century.
It has to be said that, as expected of PayPal's boss, he was able to keenly realize the core characteristics of this emerging market in the early days of the rise of the Internet industry, and did not hesitate to use this unethical approach. No wonder in the next two years, he was able to defeat eBay's own payment software on eBay's home turf, forcing eBay to spend $1.5 billion to "recruit" PayPal.
Lu Yiming agreed with Peter Thiel's hamburger strategy and also made a suggestion: "We can implement a tiered reward system. For example, if a new user is brought in, we only reward them two dollars. But if the other party can bring in ten users, then we reward them thirty dollars. And so on. The more users they bring in, the greater the reward will be."
This viral marketing trick was learned from a certain Xixi in later generations. In order to attract new users, Xixi's tricks were endless. She managed to carve out a path for herself right under the noses of Alibaba and JD.com, and even surpassed them.
After hearing Lu Yiming's suggestion, Peter Thiel's eyes lit up and he slammed the table and shouted, "Lu! This is a really great idea."
Then, Peter Thiel remembered what he had said to Pan Ning about the merger, and said, "Lu, do you know X.com? Under the leadership of Elon Musk, this company is still very strong. We have discussed the merger of the two companies before. What do you think?"
How could Lu Yiming not have heard of the name of the Iron Man of Silicon Valley?
However, Elon Musk is currently unknown in Silicon Valley and is just an ordinary South African immigrant.
Speaking of Elon Musk, Lu Yiming became interested and said, "This is a good idea, but why should PayPal merge with X.com instead of X.com merging with PayPal? I am more interested in this matter, leave it to me."
Half an hour later, Lu Yiming and Li Yiwen left PayPal and headed for X.com not far away.
At this moment, at X.com, Elon Musk was sitting in his office, looking worried.
Right now, more than a dozen Internet companies collapse every day in Silicon Valley, and people going bankrupt can be seen everywhere. He is very worried that he will become one of them.
At this time, the company's chief financial officer, Eddie Ho, came in and reported to Elon Musk: "There is less than one million dollars in the company's account. We may not be able to survive until next month."
In 1995, Elon Musk had just completed two days of doctoral studies at Stanford University when he decided to start his own business. He dropped out of school, found his brother Cambal Musk, and founded Zip2 with some angel investment from a small group in Silicon Valley.
In 1999, computer manufacturer Compaq acquired Zip2 for $307 million in cash and $34 million in stock options, and 28-year-old Elon Musk made a profit of $22 million from the acquisition.
Two months after his company ZIP2 was acquired, Elon Musk used his $22 million and spent $12 million to establish X.com. After paying taxes, he had less than $4 million in his account.
After a year of hard work, there was only one million dollars left in the account.
X.com is not in a good situation right now. It has a strong competitor, Confinity, in front and criticism from investors behind. At the same time, the overall market environment is very unfavorable to the entire Internet industry.
Not to mention his employees, even Musk himself has little confidence in the future.
Just as he was struggling to figure out how to keep his company alive until June, an employee said, "Sir, there's an Asian guy outside who wants to see you."
When Elon Musk heard that the person was Asian, he was a little surprised. In his opinion, the probability of seeing African Americans here was higher than that of seeing Asians.
"Let him in."
Not long after, Elon Musk met this Asian man, Lu Yiming.
After just one look, he immediately stood up from his seat, walked around the desk, came in front of Lu Yiming, bent down slightly to make himself look almost as tall as Lu Yiming, took the initiative to stretch out his hands and said: "Mr. Lu! Welcome! I often hear all kinds of news about . You are really amazing!"
In the eyes of many people who don't know him, Elon Musk is probably an arrogant technical genius who is ashamed to associate with ordinary people. But in fact, people who know him a little know that he is actually very lively and even funny. His ability to brag is beyond the reach of ordinary people.
Now Lu Yiming knew that this guy was still a bootlicker.
Facing Elon Musk, who is less than 30 years old this year, Lu Yiming said straight to the point: "It's good that you know me. Then I won't waste my words. Do you want to sell your company?"
The smile on Elon Musk's face froze instantly.
Currently, X.com is still in a trough period and has lost a lot of money, which is unacceptable to the "genius" Musk.
In his opinion, Lu Yiming's acquisition of X.com at this time was obviously intended to buy at a low price. Under the current circumstances, X.com would definitely not be sold at a good price.
So, he simply refused: "Not for sale!"
Facing Elon Musk's tough attitude, Lu Yiming kept smiling and said slowly, "Business can be negotiated. Do you want to hear my offer first?"
Elon Musk said grimly: "I don't think so."
Lu Yiming didn't care much about being rejected. After all, compared with the huge value that Elon Musk could bring in the future, the little profit that could be brought by lowering X.com at the moment was really not enough.
So Lu Yiming didn't continue to tease Elon Musk, but talked to him about business: "I just left Confinity. I invested 30 million US dollars in them."
When Elon Musk heard this, he calmed down instantly. He was a smart man and naturally understood what Lu Yiming meant.
X.com and Confinity are competitors. Now the opponent has received a large amount of financing, while X.com is still waiting for the rice to come. Once the war breaks , can X.com withstand the opponent's money-burning offensive?
Seeing that Elon Musk's face was uncertain, Lu Yiming continued: "I am coming here to tell you this, not intending to declare war on you with PayPal."
Elon Musk frowned slightly and muttered in confusion: "PayPal?"
Lu Yiming smiled and said, "That's right, Confinity has officially changed its name. PayPal represents a brand new beginning and a brand new journey. I hope you can lead your team to join us. Only by joining hands can we fight the real enemy."
"The real enemy?"
Lu Yiming said: "Yes, I think that after we unite, our real enemy is eBay."
