In the early days of PayPal, unbelievable events unfolded one after another.

Let's summarize the most interesting 'behind-the-scenes stories' of the startup.

"Beaming" Money with PalmPilots
The service first created by Confinity in 1998 was a way to send and receive $10 using infrared between two PalmPilots. Developers Max Levchin and Peter Thiel called this demo "Beam me a buck" while showcasing it to investors, and the name 'PayPal' was derived from this.

Sleeping with the Enemy: The Merger of X.com and Confinity
On one side was Elon Musk's online bank X.com, and on the other was Confinity, which was experimenting with email payments. The two companies engaged in a fierce war over eBay sellers, leading to a conclusion in the spring of 2000 that "it's better to merge than to both fail." Despite the tense atmosphere where employees worked with their backs turned to each other, the merged company eventually unified under the name 'PayPal' a year later.

X.com CEO Ousted Over Porn Site Misunderstanding
Even after the merger, Musk pushed for the brand to be X.com instead of PayPal. The problem was that many internet users at the time misunderstood 'X.com' as "an adult site," causing them to hesitate to enter their credit card information. While trying to board a flight for a business trip, Musk received a text about a coup from executives saying "customers are fleeing because of the name," and he had to step down as CEO.

Giving Away $10, Losing $1 Million in Cash Daily
With a 'crazy' referral program that gave $10 to everyone who used or invited others, the number of users skyrocketed, but at its peak, daily marketing costs approached $1 million, quickly draining the bank account. Nevertheless, thanks to this strategy, they surpassed 1 million users in just three months, establishing themselves as the payment standard on eBay.

Scams Losing $2,300 Every Hour and the Birth of CAPTCHA
Behind the rapid growth, there were shadows. In early 2000, due to fraud and stolen cards, $2,300 was lost every hour, prompting CTO Levchin and engineer Gaussbeck to hastily create a 'distorted text challenge,' which became the world's first commercial CAPTCHA, the 'Gaussbeck-Levchin test.' It's interesting that PayPal is the origin of those jumbled letters that appear before most logins today!

Voluntary Viral Campaigns by eBay Sellers
At eBay, which was not an official partner, having 'no payment method' was the norm. Small sellers began to insert PayPal buttons into their HTML descriptions, starting a kind of guerrilla campaign, and by 2001, 60% of all transactions on eBay were paid through PayPal. This led to eBay acquiring PayPal for $1.5 billion in 2002 while trying to grow its competing service Billpoint.

The Seeds of the 'PayPal Mafia'
The founding members and about 20 early employees left the company and went on to establish Tesla, LinkedIn, YouTube, Palantir, SpaceX, and Yelp, reshaping the Silicon Valley investment and startup ecosystem. This is why their network is still referred to as the 'PayPal Mafia.' It's a rare case of a single startup nurturing the next generation of giants in Silicon Valley.

An idea that started from a small PDA led to mergers, coups, cash giveaways, battles against fraud, and a $1.5 billion exit - the PayPal founding story feels like a drama.