Every (founder) story I’ve ever heard about PayPal goes something like: “there we were, the only people who offered a service that let people send money, and we had the genius to figure out people wanted to do that.” Nobody ever explains *why* they were the only such service.
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Replying to @matthew_d_green
I feel that there was a lot of competition of various levels of had-their-&#%#-together (remember Flooz?), but Paypal substantially out-executed all of them, and was the only one which understood it was a two-sided business and that you had to win both sides.
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Replying to @matthew_d_green @patio11
Because the general view I’ve always gotten is that PayPal sucks and everyone hates it. When Stripe and Venmo and Square came along, people couldn’t wait to move. But that took a DECADE. What’s that about? PayPal was so good??
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Replying to @matthew_d_green
With my user hat on, having fed my family out of a Paypal account for a few years, I think the degree of hatred they hit in e.g. HN threads is not coextensive with the feelings of people using them. There are extremely formidable moats in the business; nobody crossed them.
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Replying to @patio11 @matthew_d_green
Payments is a hard technical problem, but that's not why it's a hard business to be in
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Replying to @matthew_d_green @kevinriggle
A brief sampling: fraud ^ 100, need for operational excellence due to low margins, hundreds of jurisdictions you need to be compliant in across multiple regulatory regimes, extremely toothy partnership considerations, two-sided marketplace and particularly consumer adoption, etc.
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Partnership considerations: you probably don't want to replace the entire financial ecosystem with one go, so you will need someone inside the circle of trust to vouch for you, and now their problems become your problems. You have to make this work for both sides.
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That turns out to be an oversimplification because you won't have just one partner relationship. Figure on ~5 early and ~hundreds at Paypal scale. You'd be surprised how few geeks are fluent in "Japanese banker."
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Replying to @patio11 @kevinriggle
How much does it help the banking industry to make sure there *aren’t* a lot of dynamic SV competitors pushing into their business area?
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Replying to @matthew_d_green @kevinriggle
There is more nuance in the relationship between tech and finance than is often appreciated by e.g. cryptocurrency enthusiasts. Startups in payments/etc are not uniformly *competitors* to banks. They're also potentially-materially-sized customers/channels/etc for incumbents.
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