The Mafia that Rules the Tech World | Sidebean

0:00Visible puts unlimited 5G data and hotspot in the palm of your hand, powered by Verizon's 5G network, with no contract holding you back. And for a limited time, you can get visible for just $19 a month for 12 months when you use promo code Save6. All the features of Big Wireless Service, for half the cost. Tap the banner to switch today. Terms apply, standard rate applies at month 13, see visible.com for plan features and network management details. Your body isn't a problem defects. It's a system to support, from PMS to pregnancy to menopause. Alley's women's wellness line is built on real science for every stage. No guilt. No stigmas, just science-backed supplements that work with you, not against you. Choose science over shame. Find support at a retailer near you or on alley.com. That's OLLY.com. I see you. Avatar Fire and Ash is now streaming on Disney Plus.

1:02It's the film critics are calling the best Avatar yet. Go, go, go, go! A true epic and completely jaw-dropping. This is the only pure thing in this world. Return to Pandora on Disney Plus. There will be an adventure for the whole fam. And watch the Oscar-winning phenomenon at home. This is sick! Avatar Fire and Ash, now streaming on Disney Plus, rated PG-13. Do you recognize any of these spaces? Imagine you're in this meet-up or party event and you find yourself face-to-face with one of them. Did that happen to me? No. And honestly, it's unlikely to happen to you either. These guys are unreachable. Untouchable these days. A more realistic scenario. Next life. If you're a tech entrepreneur, knowing who these guys are is kind of like common culture. An investor or maybe a fellow founder will maybe name-drop them.

2:06And yeah, you have to know who they are. This is a photo by Fortune Magazine on an article that coined the nickname, the papal mafia. In a certain way, they control Silicon Valley. If you're building a company or rather, if your company reaches massive scale, chances are you are going to come across and have to deal and negotiate and have an investment from one of them. This man is Peter Thiel. According to the article, the dawn. He is the best known investor in the Bay Area. He co-founded Palantir, the first investor on Facebook, enough to run him a scene in the actual social network movie. Thiel is a controversial figure, no doubt, being an open Trump donor and supporter, and he's one of the few outspoken Republicans in this very liberal tech-starter world. That's all I have to say about politics, by the way. This is Max Levchin. He's known as the Concealerie. Honestly, where do they get this stuff? He was relentless in developing technology to prevent fraud, such as the actual capture.

3:09He was involved in the early test versions. We sort of owe him the whole fire hydrant thing. This is John Careem, and if you're watching this video, it's thanks to him. He's one of the co-founders of YouTube. The first video ever on YouTube was crime at the zoo. This is Jeremy Stoplman, one of the co-founders of Yelp, and still the company CEO. Russell Simmons is also in this photo, another Yelp co-founder, and the former CTO. These two guys are look-no-sec and Kenny Howory. And along with Peter Thiel, they're the managing partners at the Founders Fund. A firm that has invested in Figma and Stripe, Compass, ZockDock, Airbnb, Facebook, Spotify, Rianny Bels, among others, by the way. I'm not saying among others just because their investment list goes on and on and on. These are some of the most important tech companies in the world. This guy is Reed Hoffman. He co-founded LinkedIn. I'm going to further that.

4:09He's also invested in Facebook, Flickr, and joined the Microsoft Board in 2017. This guy is Roller of both Partners at Sequoia Capital. These guys are investors in Uber, in Apple, Airbnb, Robinhood, and Vidya DoorDash. And what connects all these men? They were all early people, founders, or employees. And the list doesn't end there, of course. His calendar was already too busy to make it to the photo. But the most well-known member of character of this game is no other than Elon Musk. He built this electric car company. Made a lot of people a lot of money because it stopped through like 700% last year. You might have to thank him in a few years or putting a man on Mars. There's also Yishan Wong, who was the CEO of Reddit from late 2011 to 2014. Then Steve Chen and Chad Hurley, the other YouTube co-founders. I mean, what happened here? What secret sauce made this group the most relevant tech investors and entrepreneurs

5:15in Silicon Valley? There isn't a secret sauce. It's all pretty clear if you type deep into the story of people. And the type of people that the founders like to recruit. Let's look into that. Let's look today into the origins of the paper mapping. Alright, so some quick stats about PayPal today. There are 377 million users, a total of 15.4 billion dollars in payments to the platform. What I would call this is a necessary evil. I've had my fair share of not-so-great-people experiences. For example, if you want to buy stuff on eBay, you sort of after-use PayPal. It's not a slick interface. It's not the best customer support. It's like the Super-Ozster favorite platform. But say what you will about PayPal. Chances are, you have a PayPal account. And MarketReach is even bigger in Europe and in countries like Germany.

6:15It was Peter Thiel, Max Levchin and Luke Nosek that started this company in 1998. And the company was originally called Confinity. It was going to focus on the world of digital payments. That's what they said at the beginning. This is 1998. This is the true beginnings of e-commerce. The few small online businesses that existed had nothing close to a good platform for online transactions. And, well, they founded the company. They experimented with a few solutions. And the one idea that stuck with them was this payment system that is called PayPal. It would allow users to transfer money digitally, which would become the golden ticket, the path to their success. In March 2000, Confinity merged with an online bank called x.com. And they took their name. This bank was founded by none other than Elon Musk, who was brought in as CEO of the whole conglomerate. And Elon Musk's coming was trouble. But hold on a sec. So far, this sounds like the story of this regular start.

7:18It's not so different from any other company forensics stories we've done. Why was PayPal different? What did they do differently? Why was everybody... Visible puts unlimited 5G data in hotspot in the palm of your hand, powered by Verizon's 5G network, with no contract holding you back. And for a limited time, you can get visible for just $19 a month for 12 months when you use promo code Save6. All the features of Big Wireless Service for half the cost. Tap the banner to switch today. Terms apply, standard rate applies at month 13. See visible.com for plan features and network management details. At Oli, we've got wellness down to a science. From PMS to pregnancy to menopause. Our women's wellness line offers science back support for every stage. No judgment, no shame. None of the stigma. Just supplements designed to meet you wherever you're at. Oli, choose science over shame. Find support at a retailer near you or on Oli.com. That's O-L-L-Y.com.

8:19I see. I see. Avatar Fire and Ash is now streaming on Disney Plus. It's the film critics are calling the best Avatar yet. Go, go, go, go! A true epic and completely jaw-dropping. This is the only pure thing in this world. Return to Pandora on Disney Plus. There will be an adventure for the whole fam. And watch the Oscar winning phenomenon at home. This is sick! Avatar Fire and Ash, now streaming on Disney Plus, rated PG 13. It's so successful in the end. It relates to one of the reasons why Elon Musk didn't have an easy landing on people. Company Culture. Now, company culture is this marvelous thing. It's one thing that founders don't necessarily pay too much attention to. As of shooting this video, our team has slightly missed 33 people across two countries. And culture for us is everything. It ranges from choosing whether we micromanager or not to deciding if we have food or beer at the office.

9:23We treasure culture. It comes from the founders and our experience starting the company. But it's reinforced by the managers every day. It defines who we hire. It defines how we work. It defines our schedules. And it defines everybody's responsibilities. It's what makes your company unique in the end. It's what people remember about your company when they leave. It's the opportunity they have to sort of paint the path for the company. The point is, who you hire defines your company. And in case of people, it defined so much more in the future. For example, feel the spiced meetings. Rumors say he often walked into a random meeting that he saw happening in the office. And he forced them to break it if it didn't feel the discussion deserved an in-person meeting. Now, feel had a firm believe in the value of the hiring process. He said that I wanted to build a company where everybody would be really great friends. And no matter what happened with the company, the friendships would survive.

10:27That's what he told Tech Republic. Now, he reiterated that he not only hired his friends, but possible friends as well. Many of those friends who ended up working at PayPal came from his earliest days at Stanford University. Lev Chin, for example, was no different. He hired plenty of classmates from his college days in Chicago. So it pays to make buddies at college, right? And perhaps that's the primary value of higher education. I think it's one of the main reasons why you should go to college. The two co-founders didn't want jocks or NBAs. They didn't want consultants for that matter. And this belief in extensive today, feel found that a fellowship, which is a two-year program for young people who want to build new things. That comes from their website. It says, feel fellows skip or drop out of college to receive a hundred thousand dollar grant and support from the Thiel Foundation's network of founders, investors, and scientists. Essentially, these guys pay you a hundred thousand dollars to drop out of college.

11:31And other people, example, they didn't hire anybody who played basketball. Lev Chin told CNN because everybody I knew in college who liked to play hoops was an idiot. This is a quote by the way. Now, other practices that are famous, they wanted to hire people who live and breathe numbers and who speak multiple languages. I'm gonna speak Italian to my... You let everybody from managers to grunts see all the data including traffic, revenue, burn rate. This is a quote from them, by the way. They wanted to make decisions based on facts and arguments, not on experience, which again is so far so good. But some other practices were more complex. They only wanted to recruit people from the Midwest. One of the objectives was to foster a competitive, hyper-masculine work environment without jocks. They said it was better to compete on the ping pong table instead of the basketball court. Whatever that means. They forced out anybody who disagreed with their values. And if you leave... You have to stay in touch with the inner circle and you should invest in their startups.

12:33This created a complicated culture and paypal. In his interview for the Fortune article, Elon Musk called the culture an intellectual pissing contest. Apparently, some disagreements translated into wrestling matches in the early days of the company. This very much mafia environment was of course not very welcoming towards women. Fortune mentioned a case of a female engineer who wasn't good at ping pong. So they almost passed on hiring her because she lacked competitive fire. I'm quoting them. You can also judge by the number of women in that mafia victory. Many of the ex.com employees that came with Musk after the merger, they left soon. The problem with Elon Musk wasn't only cultural. Elon did want to make some significant changes in the software and the structure of the product. And this made everything harder for him. In the fall of 2000, while Elon Musk was on his way to Australia for apparently the first vacation he had taken in years,

13:36feel orchestrated a coup with the board and they got him fired. And this didn't stop paypal by any means. In 2001, the company had 10.2 million users. By February 2002, four years after the initial idea, just months after renaming itself finally its paypal. The company went public. In this IPO, the company stopped from $13 to a closing value of $20 in the first day of training. Now, paypal is a dot-com survivor, no doubt. And if you haven't watched our video on the dot-com model, go watch it as well. Finally, in July 2002, eBay acquired paypal for $1.5 billion. All of the early employees walked out millionaires. And after the acquisition, many of them quit eBay just because of the compatibility problems with the eBay culture. It leaves it good. It's a picnic in all day. I mean, so what happened? Why is this paypal mafia so successful today? Why paypal? An obvious question here is, do these guys run Silicon Valley like I'm off of you?

14:39No, the truth is they don't. They're extremely relevant investors and entrepreneurs. And if you want to belong in the valley, you sort of have to understand who they are. Visible puts unlimited 5G data in hotspot in the palm of your hand, powered by Verizon's 5G network, with no contract holding you back. And for a limited time, you can get visible for just $19 a month for 12 months when you use promo code Save6. All the features of Big Wireless Service, for half the cost. Tap the banner to switch today. Terms apply, standard rate applies at month 13. See visible dot-com for plan features and network management details. At Oli, we've got wellness down to a science. From PMS to pregnancy to menopause. Our women's wellness line offers science back support for every stage. No judgment, no shame. None of the stigma. Just supplements designed to meet you wherever you're at. Oli, choose science over shame.

15:39Find support at a retailer near you or on Oli.com. That's O-L-L-Y.com. I see you. Avatar Fire and Ash is now streaming on Disney Plus. It's the film critics are calling the best Avatar yet. A true epic and completely jaw-dropping. This is the only pure thing in this world. Return to Pandora on Disney Plus. It will be an adventure for the whole fam. And watch the Oscar-winning phenomenon at home. This is sick! Avatar Fire and Ash, now streaming on Disney Plus, ready to be defeated. This is our you'll be connecting with them in your entrepreneurial journey. By that measure, we are part of the mafia as well. We are a 500 startup's company. 500 startups was founded by Dave McClure. And one of the reasons he's famous is because he's an ex-paper. So he's part of the mafia, I guess. Not famous enough to be included in the photo, but that makes us part of the mafia. And I think that's a bit of the point.

16:39If you are a tech company, you're inevitably going to come across some of these guys. The point of all this is that the magic combination these guys had in their hands. The group's attitude has drawn heavy criticism. It laid the grounds for a white male underfitty domination of Silicon Valley. Yes, it works for this demographic. And some have criticized the lack of opportunity for women. And people of diverse races and different backgrounds. Experts believe it's now hard to change this behavior within the Valley. Thanks mainly to the mafia's strong influence and their track of success. We can't deny that the papal mafia has changed how we see the tech world, how people outside the tech world see it, especially Silicon Valley for better or worse. And while many want to emulate this culture and this philosophy, it's not that easy. Experience with a successful startup from the earliest stage,

17:42experience with acquisitions, highly technical and analytical people, a very competitive mindset and network of other people like them who are well connected in the Valley. And last but not least, money. What better combination of attributes do you want for a successful person in the start of world or in the Bay Area? What is a group of people who have an incredible, truly incredible mix of variables to position themselves, to be successful in the start of world, either to start these companies or to invest in them? That's the power of having a network. We've talked about this many times and also the power of money. Will Schroeder, one of my favorite CEOs out there, has this cool podcast episode on how to sell your company. And how selling your company, even if it's for a small amount, can truly change your life. For someone like me who doesn't come for money and for most founders at that, imagine getting $500,000 when you're 32. You pay out your debt, you pay out your mortgage, and you create a bucket of money that you can use to invest.

18:45You certainly have to keep a day job, but suddenly it's not so crazy to quit that day job and start a new company because you have savings. Not everybody has access to that flexibility and the people who do have the opportunity to start more companies. They have something to fall back on. Suddenly, it's not crazy to be willing to spend a year without a salary because you can. You can start a new idea. And if you're smart and you're connected, that idea has a much better chance of succeeding. The papal mafia got themselves a head start. A head start all of us entrepreneurs dream to have. And I think that that's why they are who they are today. I see. Avatar Fire and Ash is now streaming on Disney Plus. It's the film critics are calling the best Avatar yet. A true epic and completely jaw-dropping. This is the only pure thing in this world. Return to Pandora on Disney Plus.

19:47There will be an adventure for the whole fam. And watch the Oscar-winning phenomenon act. And the movie will be the first to be released. Return to Pandora on Disney Plus. There will be an adventure for the whole fam. And watch the Oscar-winning phenomenon act. This is sick. Avatar Fire and Ash now streaming on Disney Plus. Ready to pee to their teen.