{"id":59845,"date":"2026-05-06T18:51:10","date_gmt":"2026-05-06T18:51:10","guid":{"rendered":"https:\/\/www.europesays.com\/people\/59845\/"},"modified":"2026-05-06T18:51:10","modified_gmt":"2026-05-06T18:51:10","slug":"the-paypal-mafia-built-a-1-5-billion-fintech-pioneer-the-company-they-left-behind-is-struggling","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/people\/59845\/","title":{"rendered":"The ‘PayPal Mafia’ built a $1.5 billion fintech pioneer. The company they left behind is struggling"},"content":{"rendered":"

Nineteen years ago, in a Fortune cover story <\/a>that christened the group, the so-called \u201cPayPal Mafia\u201d gathered in San Francisco for a photo shoot. There were gold chains, tracksuits, Maker\u2019s Mark, Sinatra singing through the Wurlitzer. Peter Thiel had a butler, Fortune\u2019s Jeffrey O\u2019Brien discovered\u2014\u201choly cannoli\u201d\u2014while Max Levchin wore mismatched freebie shorts.\u00a0<\/p>\n

Elon Musk skipped the photo shoot to collect an innovator-of-the-year award, but Reid Hoffman, David Sacks, Roelof Botha, Jeremy Stoppelman, Jawed Karim, Chad Hurley\u2014they were all there or thereabouts, having recently sold PayPal to eBay<\/a> for $1.5 billion and scattered into dozens of enterprises which Fortune valued at the time to be \u201cworth a total of roughly $30 billion.\u201d<\/p>\n

That $30 billion valuation now, of course, feels quaint. The mafia went on to build or fund Facebook, LinkedIn<\/a>, YouTube<\/a>, Yelp, Tesla<\/a>, SpaceX<\/a>, Palantir, Affirm, and a meaningful slice of the venture capital industry that then bankrolled mostly everything else in Silicon Valley. They produced presidents of companies, elevated a sitting Vice President, and one even became the richest man on Earth.\u00a0<\/p>\n

Meanwhile, the company that made their name keeps faltering towards the point of no return.\u00a0\u00a0<\/p>\n

The company beat expectations<\/a> in their first quarter 2026 earnings; $8.4 billion in revenue against $8.05 billion expected and an earnings-per-share of $1.34 against $1.27. Still, the market shoved the stock down about 10%, to about $45.50 a share. PayPal\u2019s new CEO Enrique Lores<\/a>, in his first earnings call, announced a \u201cstrategic reorganization\u201d that sounded involved: a new, three-unit operating model and the now-mandatory pledge of \u201caggressive adoption of AI.\u201d\u00a0<\/p>\n

But it might be too late for AI to save the stock.\u00a0<\/p>\n

PayPal has suffered as they\u2019ve been losing their share to Apple<\/a> Pay, Google<\/a> Pay and Shop Pay over the years. Growth, they announced in Q4, decelerated from 6% all the way down to 1% year-over-year last quarter. David Marcus, PayPal\u2019s former president, spoke up<\/a> for the first time in 12 years in February to say that the company had \u201clost its mojo.\u201d<\/p>\n

Arguably, the mojo left in 2002, when a deal with eBay closed and Thiel walked out the same day. Soon, the group of workaholic introverts who slept under their desks and dropped out of PhD programs to run the company all followed; Sacks, who left to eventually become the \u201cAI czar\u201d for the White House, Hoffman to start Linkedin, Hurley and Karim for Youtube, and Musk for SpaceX and Tesla (He was dramatically pushed out<\/a> earlier).<\/p>\n

They were product people running a product company, and what replaced them, eventually, was finance people who were best at optimizing, and bet on pure volume. PayPal acquired Braintree <\/a>(whose former CEO, Brian Johnson, is now infamous for his biohacking efforts) in 2013 and built it into a gigantic, unbranded processor behind Uber, Airbnb<\/a>, and a long list of other companies, whose checkout pages don\u2019t reference PayPal at all. So even as total payment volume kept going up with these partnerships, the brand-name recognition declined, as did what made PayPal unique in the first place.<\/p>\n

This is something the former president acknowledged as one of PayPal\u2019s fatal flaws. Marcus wrote on X it was \u201ca fundamental miscalculation\u201d to optimize for payment volume rather than margin and differentiation.<\/p>\n

The numbers speak for themselves. PayPal today is worth about $40 billion. The mafia\u2019s other companies are worth dozens of times that\u2014Tesla and Meta<\/a> alone are each over a trillion; Palantir is around $400 billion, and LinkedIn sold to Microsoft<\/a> for $26 billion a decade ago.\u00a0<\/p>\n

The 2007 Fortune piece that named the mafia quoted then-COO David Sacks describing what made the company work in the first place. Prestige there, he said, was measured \u201cby how few people there were above you who could prevent you from doing what you wanted to do.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Nineteen years ago, in a Fortune cover story that christened the group, the so-called \u201cPayPal Mafia\u201d gathered in…\n","protected":false},"author":2,"featured_media":59846,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[123],"tags":[709,202,2135,1784,10708,228,996,207,1340],"class_list":{"0":"post-59845","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-peter-thiel","8":"tag-david-sacks","9":"tag-elon-musk","10":"tag-linkedin","11":"tag-palantir","12":"tag-paypal-holdings","13":"tag-peter-thiel","14":"tag-silicon-valley","15":"tag-spacex","16":"tag-tesla"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@people\/116529141230187805","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/59845","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/comments?post=59845"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/59845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media\/59846"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media?parent=59845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/categories?post=59845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/tags?post=59845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}