Pivot

What the greatest technology investors say about the Pivot

Pivot to Real Market Need

Reid Hoffman angel investor, Co-Founder & Executive Chairman LinkedIn and Partner Greylock & Ben Casnocha entrepreneur

PayPal a leading online payments company was acquired by eBay for $1.5 billion in 2002.  Yet PayPal initially was very different than today.

In 1998 Max Levchin and Peter Thiel “[create[d] a “digital wallet”- an encryption platform [] that [] evolved to software [] [for securely moving digital cash via a Palm Pilot] [one] of several iterations []”. The company grappled with finding a mass-market use case as the public wasn’t used to wirelessly and electronically sending cash.  Meanwhile eBay was growing significantly despite its inability to efficiently handle payments, even though “growing numbers of eBay users [tried] us[ing] PayPal to handle payments”[].  As a result “[] PayPal ditched the Palm Pilot app [] and focused on eBay]. [] It stayed true to [its] initial encryption roots while shifting to capitalize on what appeared to be the real market need.”  PayPal became a huge success, overcoming many challenges, including new management and losses from fraud.   Reid Hoffman & Ben Casnocha, The Start-up of You (book), pg 64-66, 68-70