On the latest episode of Great Books Distilled, we explore Jimmy Soni’s bestselling book, The Founders. The Founders tells the founding story of PayPal and the personalities who shaped it, including Elon Musk, Peter Thiel, Max Levchin, and Reid Hoofman. To write the book, Jimmy Soni conducted hundreds of interviews and had unprecedented access to thousands of pages of internal material. In this interview, we explore the most interesting aspects of this incredible story and what we can learn from it, and we go behind the scenes to explore the five-year story of writing the book.

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Daniel Scrivner (00:00:00):

Jimmy Soni, thank you so much for joining me. I am so excited to get into one of the many books you've written called The Founders, which is all about the origin story of PayPal. Thanks for coming on today.

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Jimmy Soni (00:00:09):

Thank you for having me.

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Daniel Scrivner (00:00:11):

I don't normally do this, but I have to start this interview by just saying, The Founders is not a short book. It takes commitment, I think, to be able to read it, but it is an incredible book. It's fascinating, it's surprising, it's fun to read. And so you've just created something that is so much fun, I was so excited to have you on. And just to be perfectly clear, there's no way we're going to encapsulate everything that's in this book in the interview that we're about to do.

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(00:00:38):

So I'm going to try to do is spend time talking about some of the big ideas in the book itself, some of the characters, some of the tactics, I think, that people might be really interested in, and then a little bit about your writing process. And where I wanted to start is kind of just this... Because I was trying to wrap my head around what is this book really. I think one way to describe, it's a 414-page book that covers the four-year adventure of PayPal, and it's really focused on that. Talk a little bit about, I guess, just the way that you frame up and think about the story. And I would also be curious if you could talk a little bit about the origin story of the book. How did you get this idea in the first place?

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Jimmy Soni (00:01:17):

I appreciate the praise. Despite its length, people have described it as readable and it's enjoyable to get through and they laugh at different moments. And I try to build all of that into the whole thing. It's a great question to kick things off with. I'll do the origin story of the book first and then how I think about it.

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(00:01:39):

So when I was writing my last book, which was about Dr. Claude Shannon, who was an information theorist. He created the field of information theory. He was a big time mathematician, one of the great geniuses of the 20th century. He worked at a place called Bell Labs. And Bell Labs, it's like the '90s Chicago Bulls of technology. It's the place they invent the transistor, they win a bunch of Nobel Prizes. And it's kind of the place you go to work if you are in a certain field in the 20th century.

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(00:02:11):

And what I started to think about just in my head was what are other clusters of talent? Not where you have one person who goes off and does some amazing thing. Where are places where you have this incredible concentration of talent? And you think about Xerox PARC, Fairchild Semiconductor. And my kind of mind moved forward, well, of course, like PayPal. There's this sort of famous PayPal Mafia. It includes Peter Thiel and Reid Hoffman and Elon Musk and David Sacks and Max Levchin.

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(00:02:40):

And I just sort of went and thought to myself, "Well, surely somebody's done something on this. They're too famous not to have." And there was actually a surprisingly limited amount of writing about it. I mean, there was Peter's own book, there were Reid's own books, there was a biography of Elon, and a few other things. But I got the sense that something got missed. Somebody didn't cross an item off the to-do list.

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(00:03:11):

Walter Isaacson actually is a friend of mine. And I would tell Walter, I was like, "Walter, this is your book. Why didn't you do this?" So I knew somebody who knew Peter Thiel, and I kind of went into it. I mean, I did a lot of research and I had a sense in my head of what the book could be, but I went into it fully thinking that there was a 90% chance that Peter would say that he didn't want a book like this, that he wouldn't help, that he wouldn't cooperate. And I was ready for that.

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(00:03:37):

I thought if the worst thing had happened is that I went in, made a sincere pitch, asked for time with him. And if he said no, what did I lose? I didn't lose anything. And so that's exactly what I did. And to my great surprise, and I was genuinely surprised, he was very into it. And almost from our first meeting, I would say, 10 minutes in, I remember saying what I thought the book would be. And he said something like, "Boy, there are so many good stories." And you could just see him. He looked down, he shook his head, and he's like, "Boy, there are just so many."

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(00:04:12):

He actually said, "There's so many crazy stories." And I remember being like, "Okay, there might be a there, there." And that's not enough. You have to go from him to other people. He introduced me to friends of his who were part of the group, and I sat down with them and I learned more. And what I started to realize over time is that because some of these people became very successful in Silicon Valley, all of the coverage about them became focused on what they do day-to-day, not what they did in 1998 and 1999 through 2002 during the days of dial-up internet. And by the way, that's totally understandable.

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(00:04:52):

If you are a journalist, let's say, at Forbes or at the Financial Times, and you get time with Max Levchin, you cannot tell your boss, "I'm going to go ask him about PayPal." They'd say, "No, you need to ask him about the public company that he runs today. It's called Affirm. That's what he's doing." I had a different kind of background. I was a historian. And so when I went in, I was like, "Oh, this is a work of history that somebody should write while they still have access to the people who lived it." And that seemed compelling enough. And I went off and approached it that way.

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(00:05:24):

So what's interesting is that my PayPal story is really, with a little bit of room on either side, pretty explicit like 1998 to 2002, from the company's inception to its sale to eBay in late '02. I do a little bit on the afterlife, but that was the dimension. And what I saw within it, this is the way I described it to Peter actually. I'll share to you how I described it with him. I said, "I think this is Lord of the Rings just set in Palo Alto in 1998."

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(00:05:57):

I was like, "You have all these different people, all of them are a little weird and they're kind of different. And they all come together and you're trying to do this big thing." And I said, "That's an adventure. That's what this is, this is an adventure." And I said, "I want to write it substantively. I'm not going to run away from ideas like viral growth, product market fit, fundraising, choosing a board, choosing a CEO, but I'm also going to make people recognize that this was a grand adventure for all of you because it feels that way in what I've seen." So that was my approach.

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Daniel Scrivner (00:06:29):

Now I understand what he was so excited. It's probably the Lord of the Rings reference really helped. I don't know what character he imagined himself as, Lord of the Rings.

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Jimmy Soni (00:06:38):

Actually, do you want a funny story that there's no... We can talk about it now. I tried to include a quote from Lord of the Rings in the epigraph. So I have this Machiavelli quote that I was going to do, and then I tried to include a quote from Lord of the Rings, and I got shut down by the Tolkien Estate's lawyers who refused to let me use. It was a quote, it was like a paragraph. And I'm still, like, "Guys, come on. Have a little bit of literary generosity. It's a quote, you know?"

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Daniel Scrivner (00:07:07):

I know. What was the basis of that? Just copyright and you don't get to have it. I mean, who would they give access to a Lord of the Rings quote to?

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Jimmy Soni (00:07:15):

It's a good question. I don't know. And I don't think there would've been any repercussions if I did it. But my European publisher, my UK publisher was like, "You shouldn't run that risk." And I kept thinking to myself, "If I was in charge of this decision, we would totally run the risk."

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Daniel Scrivner (00:07:29):

What could have been? There could have been a Lord of the Rings quote inside this book somewhere, but it wasn't meant to be. Yeah. I mean, just to kind of comment on it, what you described is what is fascinating about this book is everyone will recognize these characters and everyone has some sense and, I'm sure, very polarizing thoughts about who they are today and how they're showing up and what they're working on and all of those things. Because these people have all gone and done similar, but also very different things.

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(00:07:52):

But for me, one of the things I'm going to ask in a little bit is it was just so fun to be able to read it and hear about a young Max Levchin or a young Peter Thiel or a young Keith Rabois, or any of these people, and then think about what they're doing today. And there's so many parallels, they're still the same people. There's Elon Musk, his character in the book and his propensity for risk and just everything. I'm like, "Oh my gosh." You see that on display today in Twitter and in everything that's going on. Yeah, it's just fascinating.

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Jimmy Soni (00:08:22):

Let me make one comment on your comment, which is it was interesting to me. It was sort of one of the takeaways I learned in doing the book is because I was so far removed from these events, I mean we were like 20 years past the events when I was asking people about them. The conversations were a little less guarded than they would be if we were talking about, let's say, Twitter or Palantir or SpaceX. And then the other thing that happened is that actually I had this thing happen to me, which is I realize that they actually get asked the same questions over and over and over and over again.

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(00:08:57):

So life for somebody in that world can feel like Groundhog Day, right? And you hear the same phrases all the time, you have the same conversations all the time. And then I would show up. And oftentimes my first question was... Because this PayPal was, in many cases, the first job for a lot of people right after college. I would ask them, "Take me back to college. What are you thinking about? What's in your mind at that time that leads you to this company?" And it's just nobody in their day. It's asking that because there's no value for many people in asking them that. In fact, in some cases you might think if you're working on something important, that's a really weird question to ask somebody like Max Levchin. If you're a coworker, right? It's not a natural question to ask somebody, especially if he runs a company.

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(00:09:49):

And so what ended up happening is that I was often asking them to reflect on moments that were generally, especially with the passage of time, pretty positive. And it was a hinge moment in their life. They had to really think about, like, "Oh yeah. Now I think that I about it, I remember hearing about this random company through a friend." And a lot of the book as you read, it's the story even of how people get into a startup. I mean, the world of technological entrepreneurship today is structured, it's organized. There's a SaaS service for everything, right?

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(00:10:23):

But back then, I mean it was random chaos. It's still a bit of the wild west. And so I wanted to capture that and sort of show like some of this was just very random. And it was just, if you knew somebody who knew somebody who made an introduction. The canonical example of this, by the way, is Roelof Botha. Elon tries to recruit Roelof to work at x.com, which becomes PayPal, several times. And Roelof turns him down. And it isn't until he faces a personal financial crisis that he ends up saying, like, "Hey, can I get a job with you and I'll just work while I'm doing school?"

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(00:10:55):

And today, Roelof runs Sequoia Capital. He's one of the major domos in Silicon Valley. But I wanted to also for readers to appreciate, we look at these people a certain way today. But let's sort of not forget where they started. They weren't birthed in 2022 and 2023. They had a process by which they moved in their careers, and I selfishly wanted to understand that. And then I also thought that it was important. I was like, "This is important for people who are just building a startup and they're not sure if it's going to work, and they sort of don't know who to hire and they don't know how these things come together." This kind of shows you that, again, that you can build this thing and not necessarily have a totally coherent internal logic to it.

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Daniel Scrivner (00:11:42):

No, I think it's very well said. It feels a little bit like with some of these people, you need to take some of that varnish off and remember that they were once very new in their career and they had no clue what they were doing. I mean, so much of this book is just the forever tale of startups, which is people winging it, slowly trying to iteratively figure it out, and constantly shooting themselves in the foot and stumbling over stuff. That is literally what it's like, but that's not how it's typically portrayed. And so I think what's also wonderful about this account is it's very detailed and it's got everything in it. So if you're interested in what the good, bad, and the ugly of building a startup looks like, it's a great account.

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Jimmy Soni (00:12:21):

And I would say, I had what other... I lucked. Not lucked. Along the way of doing the interviews, the reason there's a kind of immediacy to the book and the reason I have a lot of details I have is because someone shared a bunch of gigabytes of email with me. And so I went through hundreds of thousands of pages of emails over several years. And I respected privacy, people's personal privacy. But there were emails that were broadcast widely.

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(00:12:48):

So Peter Thiel's note to the team after September 11th, explaining and trying to put the terrorist attacks in context. Elon's resignation note to the company when he leaves. Peter's follow up note announcing Elon's departure. Actually, that's reversed. Peter sent his note first, Elon sent his note later. It's actually important. And there's all these moments that were broadcast, like several hundred people. I used a lot of that material to give the book the scope and the kind of shape and definition that it had, because I didn't want people to think that I was just depending on interviews that are hazy from 20 years ago.

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(00:13:19):

So I had a ton of material that's never been... Well, not never been seen before, but it hasn't been seen for 20 years. And so for example, when I get into some of the technological and architectural issues around the differences between Linux and Microsoft, kind of the systems and databases, I have notes from engineers back and forth about the difficulties, the weaknesses, the struggles, the upside. And so I'm able to not just make up my assessments, I footnote insight everything, while also not trying to get away from readability.

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(00:13:53):

This book will not be a bore to read. You will learn in the book that Elon Musk, Peter Thiel, and Reid Hoffman all ran for student government. I published their student government platforms in the book. And Peter and Reid win their student government races and, tragically, Elon loses. Though if he had succeeded in student government, who knows what would've happened? And so you'll have the moments of levity as well. But I just wanted to say that because I think it's also important that these books not just be random memory string together.

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Daniel Scrivner (00:14:24):

Yes. Well, and that's what as a whole separate kind of rabbit hole I want to get into a little bit later in this interview is talking about your process. Because to start with literally a blank page was something that happened two decades ago and go through the process of doing, to be honest, an insane amount of research. And then not just the research itself, but then the process of making that coherent and making that an exciting, interesting story. I just find fascinating.

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(00:14:51):

I want to ask you a very different question, which is when you go into a project like this one, what does success look like for you? Is the goal to make it so that it's really rich and vivid? Is the goal to immerse people in it? What in your mind are you aiming for and what are you really trying to work to get to?

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Jimmy Soni (00:15:08):

There were a couple of goals in my mind, called them philosophical goals, sort of like North Star Goals. One North Star Goal was the following. Very early on in the project, it's funny, Ken Howery actually sort of asked me a version of the same question. He said, "How will you know..." This is super early in the book, I'm year two out of six. And he was really kind with his time. He just gave me endless amounts of time, which was really very nice of him because he doesn't have a lot of it.

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(00:15:36):

He said, "How will you know if it works? How will you know if this project is successful?" And I said, "Well, my standard is if you read the book and you learn new things about your colleagues and friends, I've done it right. And you live this story and you learn new things, that means I hit it, like I knocked it out of the park." That was one important standard for me was, can I teach the people who live the story things they did not know? And I've had several of them, and I won't name names, reach out to me in the aftermath of the book's publication and say exactly that. They've said, "You know, I lived this for four years of my life and I didn't know a lot of what's in here and you document it all so I believe you." So that was one standard.

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(00:16:26):

The other standard was this, I did not want this to only be a book that was enjoyed by people who already work in technology. And I also didn't want to water things down so much on the technology development side, that it was calorie-free, that it was cookies. In other words, there was nothing there. It was air. And that's a hard balance to get right. You needed to be technical enough and media enough to appeal to somebody who works at Andreessen Horowitz.

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(00:16:58):

You also need the person who just doesn't have a life in technology to enjoy the adventure piece of it or the human interest stories or that sort of stuff. And I was always trying to think about have I hit that right spot? And in a weird way, the best standard is if some people think it's a little too technical and if some people who are technical think it's not technical enough, maybe you've hit the right sweet spot. But what I can get from the reader response is across most of the chapters, I'm at least somewhere in the right zone.

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(00:17:30):

Because a lot of books about technology end up being too dense for their own good, and they make technology seem inpenetrable. Or they have the opposite problem, which is they're not well researched and they don't put the time in to actually understand how startups come to be. And then you get just narratives that are completely made up. And there's a spot in the middle and I thought you could get to it. So those are North Star Goals.

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(00:17:55):

I would say, when you debut a book, I guess you'd never really know what's going to happen. I think that, for me, one of the other internal metrics of success is did the book strike a chord beyond America? The book has actually taken off abroad, which has been really cool to see. I found out a week or so ago, there's a copy of the book in a library in Kathmandu. And I was like, "That's amazing. How crazy is that?" And so, for me, that's little things like that, but principally it was those two goals. I wanted it to be so good and that the people who lived it learn new things.

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(00:18:32):

And by the way, these are like serious readers and these people will read a lot of books. So it's a high bar. And then the other is, could I get it to a place where it was more than people in Palo Alto, San Francisco? It was a book that could appeal to people in many different places.

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Daniel Scrivner (00:18:52):

Both extremely challenging. I mean, I love those kind of markers in your kind of quest to do this book. I want to talk for a second about the characters that are in the book. You gave an overview, and maybe this speaks not so positively. But to me, because I've kind of lived in Silicon Valley and done a lot of stuff there, but it was fascinat... I didn't know Reid Hoffman and David Sacks featured as much in the PayPal story as they did. And so it was even surprising to me as someone that I feel like maybe knew the story generally, I learned a lot.

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(00:19:21):

I want to ask about the characters in the book, was there a particular character? And what I mean by that is just the kind of core team or the people that were a part of building PayPal that surprised you the most, either there's the biggest delta between what you thought of them and who they were. And then if there's a character that you relate to the most.

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Jimmy Soni (00:19:39):

In terms of surprised me the most... With each of these, I could give you three or four different people. I would say that the one that surprised me the most was Max Levchin. And I kind of kicked the book off with him and he's a central character throughout. And I use the word surprise because there's a practical reason why, which is I think many people associate PayPal with Peter, but I'm not sure they know Max's story as well.

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(00:20:14):

And I was surprised by the sheer improbability of his story. Growing up in Ukraine right after Chernobyl, a Jewish refugee relief agency pays for him and his family to come to the United States. He's not allowed to tell his closest friends that they're going to leave. They leave, they come here with nothing. He enrolls in school, he finds his way to University of Illinois in Urbana-Champaign, like technological epicenter. Just the sheer improbability of it, it was just odd. I mean, it was unbelievable.

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(00:20:50):

And I hope that the book makes him better known. Because the truth is, within Silicon Valley, I think he has a sterling reputation. I think people think very, very highly of him. And I'm not there, so I don't know. But most people I talk to say, "Yeah, he's very well regarded." But I think more people should know who he is. His fellow engineers called him engineer's engineer. And I think he represents this generation of computer scientists in a very particular way that is divorced of a lot of the, call it like the noise or the kind of... He is somebody who loves solving problems and loves to build businesses.

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(00:21:29):

These are his great passions, problem solving and building businesses. And you see it again and again. It's almost boyish. It's almost like a childlike enthusiasm about building businesses. To me, that's a reason I kick the book off with him is because I think that character type is more prevalent in Silicon Valley than media coverage would have you believe. And there's a variety of reasons for that. I don't know all the answers honestly. But I think that that idea, the spirit of building, the spirit of creating things, the spirit of that's what I do and I would be solving problems in my spare time anyway, that was a character that surprise me most.

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(00:22:05):

In terms of relating to a character, that's a much trickier one because I almost feel egotistical or arrogant even suggesting it. I mean, there's some of these people have seen so much success and it's hard to envision myself with any of them. I would say that... Boy, if I had to answer the one that I relate to the most, I'll go this way with your question. So I was kind of crazy about this book, meaning I drove my publisher crazy with the number of changes. I custom-designed the cover because I wanted a specific kind of cover.

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(00:22:49):

I built a secret code into the book. The end notes are like 75 pages long. I have chess board art that separates each section, and each chess board situation actually corresponds in a metaphorical way to the part that comes after. I went through multiple rounds of fact-checking, two legal reads. I was crazy. I obsessed over every single word in that book. I've gone over many more times than should be allowed. And in some cases, this drove my publisher, understandably, a little batty.

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(00:23:23):

And I remember thinking I was sort of channeling my inner David Sacks, because David's whole thing throughout the book is he is the person on the team who is always pushing the product to be better, wants to cut individual buttons, individual fields down to the level of the pixel. There is nobody that was as obsessive as David Sacks. And I don't think it was conscious, but I remember thinking, "Well, that's actually what is required. You want someone who is that level of scrutiny and detail and got to fix this." And it's like, "No, no, no, we're not..." And I was a little bit that way about my book.

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(00:24:01):

Now, to be clear, I don't put his intellect and capacity for product development. I'm nowhere there. But I do think that I appreciated, particularly going as nuts as I did with the book, I appreciated that somebody needs to worry about every dotted I and cross T. Whether that is a product, meaning for the entrepreneurs who are listening, who on your team is that person? Who's the person that's actually physically pained when something goes wrong or when something's out of place? It hurts them. I think every team should have somebody like that. And for your book, you're really a team of one. So for my book it was me. But I would say it's maybe a good answer to the question.

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Daniel Scrivner (00:24:44):

No, it's a great answer. I would say the character that I was most surprised by and most impressed by was David Sacks as well too. I mean, everything from he comes into the interview basically saying everything about this idea that you're pursuing is totally wrong, is amazing. And literally the whole team says no. And Peter basically says, "No, we need to hire him." And just an incredible number of really good calls, everything from reducing the size of the team to being immensely focused on removing friction. It's just really, really impressive.

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Jimmy Soni (00:25:14):

On that I'll just make one comment, which is, you might have asked in some way, part of what happened is the effect of the book on me. The thing you said about David Sacks and friction has stayed with me. And I will tell you, I'm not in this world. I don't build consumer technology products, but I notice friction in consumer technology products that I use so much more now, having gone through the quotes and the thoughts of David.

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(00:25:39):

And by the way, his product team played this back to me, they said, "This is how we were trained to do product work. It was like noticing every single moment where you could lose a user." And I'm just thinking of it now. When I'm on a website and it has too many forms now, I will sometimes smile or laugh to myself, like, "Oh, boy. If David were here like hack and slash, and tell them to get rid of this page. And this is crazy."

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(00:26:03):

But I think that's discipline. That is actually a discipline. It's a way of thinking about design and about how consumers relate to products. And I do a whole long riff in the book about exactly that, about how friction can be a death sentence in these kinds of companies.

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Daniel Scrivner (00:26:18):

No, I think it's a fantastic point. And it leads right into where I wanted to spend a bit of time next, which, as bizarre as it might sound, I think there's a lot of incredible lessons and tactics that are woven through the book. And it's not necessarily presented as, "Here is a lesson." But clearly going through it, there's a lot you can take away. I think one of those things that kind of relates to David's presence and him pushing the team is this idea that just there's productive discomfort.

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(00:26:45):

There's so many instances in the book where you just see a lot of debating, a lot of fighting, and not shying away from that, really leaning into it. And sometimes it's destructive. I think largely it's constructive. But just this idea that high performance teams, because I think this is surprising for a lot of people that maybe haven't had a kind of startup experience is you may just think that everything's snapping into place. It's kind of this goldilocks tail.

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(00:27:09):

And what you actually find if you dig in a little bit more is know it's an incredibly uncomfortable process. The team's really trying to figure out how this works. And there's a lot of debate and there's a lot of just discomfort with that. One of I think the lines in the book is PayPal disharmony created discovery, which I think is such an amazing way of just condensing down this idea. Talk a little bit about productive discomfort, your thoughts on why that was valuable, and how that was valuable at PayPal.

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Jimmy Soni (00:27:35):

Yeah, it's one of the key things. I'm so glad you brought it up because it's one of the sort of key insights from the book, which is there were shouting matches galore during the creation of this company. There were snippy emails galore that I read. There were epic, epic threads where people were disagreeing and debating everything, whether it was some policy decision or some product decision. And I would argue that it is part and parcel of what made the company successful.

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(00:28:04):

There's a few people who played this back to me or played it back in other interviews. One of the people is Max Levchin who said, "If you have people talking about ideas face to face and combating about ideas face to face, that's good. You'd want that. If they're sniping at each other behind their backs, that's really bad." And part of what happened at PayPal is that there were epic disagreements that mostly happened face to face.

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(00:28:31):

Now it's not to say that there wasn't a little bit of politics and the same sort of stuff that happens in every other company, but I had multiple people say to me... There was just a interview, this wasn't included in the book. But this interview that I did with Chai Ted Fong. Ted was briefly on the product team. And he said, "When I would go to meet with David Sacks, I would go in so prepared. Because I knew that if there were any weaknesses in my arguments, he would find them and he would call them out. He would ask me why I hadn't found them in the first place."

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(00:29:03):

So it was not a place for the faint of heart, it was not a place where you could get away with. And I found that level of discomfort, that level of unease actually led to some really remarkable things happening within the company. And there's this line at the end, I won't get it exactly right, but Max talks about how very bright people, who are sort of A-players, they are comfortable disagreeing with ideas and they're able to separate the person from the idea. Meaning, you could sort of shout at somebody all day long and still be friendly with them by the end of the day. Why? Because you're working towards the improvement of the product, not like each other's egos or how you feel.

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(00:29:44):

There's sort of no kumbaya stuff here. It's very much, like, "What are we going to do to make the product better?" And I would say sort of David Sacks is a canonical example of that, but he's not the only one. But he is the person in the room saying like... Well, his thing, and then somebody told me this, they said he cared so much about the end user experience and it was like that was what we needed to worry about. What are we doing?

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(00:30:08):

And look, here's what I'll say, full disclosure, I think that's a very hard balance to get right. Because you could also just have a culture with a bunch of jerks who are just yelling at each other and it's not about the product, right? So I'm not saying that I have some special unlock or key for figuring out how exactly do you create the culture. What I mean to say is if you don't have product disagreements happening that are somewhat vocal and impassioned where people can really try to drill toward the truth or toward the right answer, you might have something broken in your culture. That people aren't actually willing... Like, they don't feel the freedom to express with some intensity why they think they are right.

‍

(00:30:48):

The second part of that that's important is this happened an irrespective hierarchy. One of the interesting things that I didn't... I know about startups not having worked in one, but I kind of heard they're flat organizations. But I really saw it when I saw emails from junior level employees calling out executives on threads or heard about it secondhand, where actually that was encouraged to PayPal. You were sort of encouraged to be thoughtfully insubordinate, right?

‍

(00:31:14):

There's this great moment in the book. Here's a small example of it, it has nothing to do with the product. The C-suite needs to cut costs. So one of the cost centers they unfortunately decide to cut is free vending machine snacks. So they're like, "All right, guys, can't do free vending machine snacks anymore. You got to have to pay for these now because we're got to get ready for our IPO." So the team is really pissed off. And there's a person on the team, George Ishii, and a group of other people we're like, "Well, if we're going to pay for them, we want better snacks."

‍

(00:31:42):

So they design a vending machine drawer and you can swipe your PayPal badge in front of a scanner that they put up in front of the door. And then it unlocks the drawer or something, and you can take the snack you want and it automatically debits your card or your PayPal account. And it was an elaborate active insubordination against their executives, but it was celebrated throughout the office. And I think a certain amount of that is going to be necessary for any startup to succeed. Because what is a startup, ultimately?

‍

(00:32:11):

It's an organization that's likely trying to take on some incumbent at something. They've looked at some situation and they've said, "Everybody has failed here. There's a market need or there's a problem with the set of products and services on offer. We've got to take that on." Well, chutzpah is at the heart of that. And if you can't have that internally, how are you ever going to have that externally?

‍

(00:32:33):

That was one of the lessons for me was PayPal was also taking on visa. It was taking on eBay, it was taking on MasterCard. It was challenging government regulators. If they couldn't have honest conversations internally, how are they ever going to succeed externally? You can't take these things too far. But I saw that play out very powerfully that you had to have people with the steel in their spine to say, "No, we're going to go this way and it's going to work." And that was the most fun conversation, but they were important.

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Daniel Scrivner (00:33:04):

No, I mean you made so many great points there. And the only thing I would add is I think generally from what I've seen, high performance cultures have a degree of... I don't know if you'd call it combativeness. But it's very, I would say, academic, where everyone, it's about the work is more important than you. It's more important than any individual. And that's where you're really engaging. And I think just if it was a dial, like comfortable organizations without productive discomfort, I think aren't just as effective.

‍

(00:33:29):

I wanted to cover a couple of other things. I want to talk about hiring and speed. But where I want to start, I think one of the things I thought was just fascinating in the book is Elon Musk shares a couple of his insights around how to build a great product. And it was really this idea that you have to go through this process of recursive self-improvement. And I'm just going to read a couple of quotes and then we can go from there because I think they're just too good.

‍

(00:33:50):

But I think part of it was Elon's idea that startup success wasn't so much about dreaming up the right idea as much as discovering, and then rapidly discarding the wrong ones. I think it's just a really interesting framing. And this quote in the book from Elon, "You start off with an idea, that idea is mostly wrong. And then you adapt that idea and you keep refining it. Then you listen to criticism and you engage in a sort of recursive self-improvement. You keep iterating on a loop that says, 'Am I doing something useful for other people?' And just this idea that too much precision early on can cut that iterative loop prematurely."

‍

(00:34:20):

And obviously one of the things that makes me think about is exactly what's happening right now with Twitter, where, by and large, people are looking at that process. I would say Elon is engaging in recursive self-improvement, but it's for the world to see. And it's this painful thing where you're like, "Oh my God, you're trying this? You're trying this?" So I thought that was an interesting idea. I don't know, anything to add to that? What did you take away from this idea of just don't focus overly or plan too much on the initial idea, and just iterate hell on that idea and try to get it better and better and better?

‍

Jimmy Soni (00:34:50):

Yeah, there's sort of two things I'll say about that. I was smiling throughout when you read that quote. And I should give the backstory a bit on that quote, but let's talk about the idea first and then I'll do the backstory. That idea, I think, it's certainly a truism in startup culture. But it may have gone sort of so overly used that it's become trope, but that doesn't mean it's not important. If you look at the words he says, you start out with an idea and that idea is mostly wrong. So you have some insight, but you're mostly wrong.

‍

(00:35:20):

So imagine building something from scratch, and I'm sure from the people listening have had this experience that the product you put on the first PowerPoint, it looks night and day different from the thing that you sold to some bigger company or that had some success or that first hit product market fit. And in Elon's case, at x.com, he sees x.com as the sort of greatest financial institution ever built. It's going to combine banks, mortgages, credit lines, everything, insurance, anything financial.

‍

(00:35:51):

And what PayPal becomes is a scaled person to person payment system with exceptional fraud fighting capabilities. Again, there was a big delta between where he started, which was the ideas were probably right. It was probably a little premature. There were a bunch of other things that happened. But I thought of that quote as one of the most important sort of insights, which is a startup is, by definition, a process of self-improvement. And you are beginning from a place where you are wrong and you are trying to get to write, as opposed to thinking, "We've got to figure it out. All we got to do is this and this. And that's how the cake is going to be baked mean."

‍

(00:36:29):

And I'm not in this world. But my sense is that, and I know this only from book land, it's really hard to sit in something you know is wrong in the same way that it's hard to look at a draft that really sucks and you have to get it to be better. And you're just looking at it and you're like, "Is this ever going to work? Why didn't I just go to medical school like my mom wanted." All that stuff comes up. And so I really like that quote.

‍

(00:36:54):

I will say that the reason I was sort of smiling and kind of reminiscing when you were reading it, there was this video from years and years and years ago where Elon had been invited to do Chinese television. And when I got to this YouTube video, most of the beginning is in Chinese, most of the end is in Chinese, and in the middle is Elon's English responses to these questions. And I think this thing had, I don't know, a handful of video views.

‍

(00:37:21):

And I remember thinking like, "Ugh." This was on my long spreadsheet of every Elon video that's ever been posted from 1999 to... And I just remember thinking, "Do I really have to watch this whole thing? What could possibly be in here?" He's interviewed in some... And there were gems in the middle of it, gems. And that was one of them was his sort of theory of the case of what a startup is. And I remember hearing that and saying, "I have to pull this quote out of obscurity and bring it back for people." That was the reason I was smiling while you read it. Not just because of the idea, but I remember thinking about how that quote came to be.

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Daniel Scrivner (00:37:58):

Yes. Well, now me, I so relate to you describing the process of sitting with something you know is wrong or not right as looking at a draft that's bad. Because I would say that's perpetually the experience, especially early on. And what I love about this idea of recursive self-improvement is it immediately explains why ideas don't matter and why.

‍

(00:38:18):

There's this whole sense in Silicon Valley in a debate that goes on of like, "Should you NDA people before you tell them their idea? How important is an idea? What happens if a competitor hears about your idea?" And generally the wisdom is like it doesn't matter. And the reason it doesn't matter is because it's all about the ability to put yourself in that incredibly uncomfortable process of knowing the idea's bad, the productive discomfort, this recursive self-improvement, all of it.

‍

(00:38:41):

One of the things I want to talk about is hiring. Because I think in the book, there's just so many examples of how PayPal are, quote, "hiring". And it speaks to so many ways people that are running startups, that have worked at startups have thought about it. And I think generally, it's everything from... When most people I think not in Silicon Valley, it is just all against conventional wisdom. As an example, this idea that you should never hire the experience. You don't want experts. You want to hire instead for intelligence and energy.

‍

(00:39:09):

And there's this wonderful quote from Max Levchin in the book that says, "It's great. You have to find undiscovered talent. You have to give them something more than money." And then there's other ideas in the book, A-players only hire A-players, B-players hire C-players. And Max Levchin's thought that if you're doing a great job of hiring A-players, cool. Because they're continuing to hire A-players. But as soon as you bring on that first B-player, what are they going to start hiring? And it starts to affect the whole team.

‍

(00:39:35):

It's wonderful. And maybe the last thing I would say is I've seen this firsthand. I got it, I got to work with Keith Rabois at Square early on. And he has done, so many times in his career, he has found intelligent, energetic, young people, completely unproven, and bet the farm on them and has just done an incredible job. So I think it's just a masterful example. What surprised you the most? And did you believe that startups hired intelligent, energetic, young people, not experienced people? And what are your thoughts on that?

‍

Jimmy Soni (00:40:10):

What I would say is I think that... I'll go a level deeper. You sort of know at this point the startup motif of hiring young people who might be a bit inexperienced but have time, have endless amounts of time, and have something to prove, maybe a chip on their shoulder, and they have some level of intelligence, a flexible enough intelligence. What I found interesting in the PayPal story were the moments... So if we're thinking about what are the other moments, there are a couple of examples of people who are hired, who actually come out of the financial services industry.

‍

(00:40:47):

And what happens is these teams fuse together and not everybody laughs. And so you have to ask yourself, like, "Okay, it's sort of plausible that a 20-something engineer who can work seven days a week survives at PayPal and manages to make it work." But what about someone like Todd Pearson or a Sanjay Bhargava who come out of industry? What is it that made them special and why did their colleagues rate them so highly? Because they had experience, they had what you would think would be the scarlet letter.

‍

(00:41:18):

I sort of amend my thoughts about experience because both of those gentlemen succeeded at the company because they never stopped questioning assumptions about the industry, and never stopped returning to first principles or finding ways to do things better. They would be described, in a different era, as tinkerers. They were tinkerers. And Sanjay, a great example is everyone's probably used one of the technologies that Sanjay helped to develop. It's called random deposit.

‍

(00:41:48):

So Daniel, you try to connect your bank to some third-party vendor and what does the bank do? They're like, "Well, the vendor has to send us two deposits, 2 cents and 7 cents, and the code is 0207. And then you can enter in that code." Sanjay came up with that idea. PayPal was the first institution to put it into practice. It's because he didn't say to himself, "Well, these are the ways that we've done authentication for 30 years at Citibank or whatever." He kind of came in and said, "Well, what if we were trying to flexibly create a cheap ATM code from scratch? How would we do that?"

‍

(00:42:24):

And I think that's one place to focus is they hired some people with experience. But even the people they hired with experience had this ability to say that the industry isn't doing everything right. And there are ways to improve and we can challenge some of the conventions here. And of course, their relationships also helped keep the organization on even keel. But I don't want to poo-poo experience entirely. I think the idea is like, does your experience lead you to be stuck in the way things have always been done? Or does your experience actually lead you to see five opportunities to do things better?

‍

(00:42:57):

And that I think is something that can be predictive of success in a startup environment. Not wholly predictive, but Todd did not get booted out of the organization. He sees it through to its IPO, right? And part of that is he is willing to suspend what he knows and say, "What if we were starting from scratch?" So that's the only amendment I would make. But I think the other thing I would say about hiring is PayPal's hiring was also, in the very earliest days, a lot of friends.

‍

(00:43:26):

And I think friendship and business can get complicated. There were certainly complicated at different moments in the PayPal story, but I would say that this book is a robust argument in defense of working with your friends. And one, there's this gentleman who explained it to me, David Wallace. He said, "Part of what that does is that we all trusted each other. We had a basic amount of trust in one another and our judgment and everything else. And so if you have the right group of friends, you could build the next PayPal. But part of what happens is you trust each other enough to be honest, and then you can iterate more quickly on the product." And I didn't know that, that was counterintuitive to me coming in. I thought, "Look, your friends are your friends. Your business, your business. Might overlap to some degree, but you should be a little careful." This was a powerful counterargument against that.

‍

Daniel Scrivner (00:44:11):

Yeah, I love those examples. I want to talk about one thing I thought was fascinating in... I'm kind of struggling with I guess the right way to approach the question because there's many different ways, but there's kind of two thoughts in the book I think are really related and maybe be an interesting entry point, which is there's a moment in the book where I think Elon talks about PayPal and really summarizes it as, "It's a very easy business to start, very difficult business to actually keep going and to keep in business."

‍

(00:44:39):

There's kind of a moment where Max Levchin I think has a very profound insight, which is the team. So the team had this entire idea around being able to send money and there was relative degrees of ambition Elon Musk wanted to make a super app back in the '90s, kind of have PayPal be everything related to your finances. Other people were more focused on this basic utility. And the reason I thought Max Levchin's kind of, I don't know, just unvarnished take on what they were really building was fascinating. As anyone in a startup, you were necessarily thinking that what you're doing is really innovative.

‍

(00:45:11):

And Max Levchin basically had this kind of moment where he says, "Actually, what we're building is a commodity business. We all think it's really cool. We're building this amazing kind of front end customer experience. And that's really where we're innovating. But at the end of the day, we're basically a bank. We're taking your money and we're moving it around. We have the same costs, it's relatively undifferentiated." And it leads them to an interesting place, which is, "Okay, if we are in a commodity business, then how are we actually going to make this successful?" And it leads them down this road of really optimizing for fraud. They finally have figured out the right area to expend a bunch of resources, and they've really figured out, I think, PayPal's competitive advantage.

‍

(00:45:46):

Thoughts on that because I know it felt like for a long time PayPal was stumbling over what to build, and it seems like that was an aha moment. I don't know. Thoughts on that in that road and that kind of path?

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Jimmy Soni (00:45:58):

Well, your description of it, I mean, it's spot on. I probably shouldn't say anything in case I get something wrong. Because you're a hundred percent right, which is the way that people think of PayPal is the way they use PayPal, which is I send Daniel $10, right? It's easy. Or Venmo, because it's owned by PayPal now. But what PayPal was back then and what it remains to some degree to this day is a very good arbiter of risk. It's an arbiter of financial risk.

‍

(00:46:27):

It can decide whether I actually have $10 to send Daniel. It can decide if Daniel's a real person. It can decide if you are going to use that $10 to go do something very bad. Or if both of us are fake, and we're actually just doing this transaction to move goods and services we don't legitimately have access to. And so PayPal had this curious experience of filling a hole in the eBay marketplace, where they became effectively the sort of merchant of record for eBay buyers and sellers. And Visa and MasterCard could have served this market, they didn't.

‍

(00:47:03):

But the thing that differentiated them was that they were able to establish the risk level of each of these transactions and bring fraud down from what was sort of company ending levels to manageable levels that were in line with the financial services industry. And they did that at scale. And so it's interesting because I think the lesson for people who are listening who are founders or who are entrepreneurs or who have joined a startup is what you think your product is. And in fact, what the entire world might think your product is may not actually be your product.

‍

(00:47:39):

The description that Max gives is like, he says, "The front end is called our product. But what we really did was we built a powerful way to figure out what were good transactions and what were bad transactions, and we could quickly stop the bad ones and we could let the good ones go through. And we got better at that over time." And so to me, it was an interesting, I had never heard that before. I didn't know that before. Nobody didn't study this. I mean, you'd be hard to understand if you didn't sort of dive in. But what the company's signature innovations where we're really fraud fighting tools.

‍

(00:48:10):

And I think that the lesson... That's not one lesson from that, there might be several. But if you think about what are the offshoots of the thing you've built, that might actually be the thing that is really truly the thing that broke new ground, as opposed to the thing that everybody sees and knows.

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Daniel Scrivner (00:48:27):

Yeah. I think another way to maybe describe it is similar to that PayPal experience. Oftentimes what a startup really is, is you're packaging it for customers in a completely new way. But that may not be what's generating the value. That's what gets customers interested. That's what get customers to sign up. And it was just a fascinating moment of really critical, very smart analysis of, "Okay, we've built a product that generally people really enjoy, feels very new, but we actually haven't created any value. So how do we now create value and what's this kind of mote and how do we make this a workable business?" And I thought it was just really interesting.

‍

(00:48:57):

And the other thing, and I'm butchering, I'm sure, all of the quotes. But Max Levchin also then goes on to wax eloquent about just how beautiful he thinks this numerical kind of algorithm is that's computing fraud. And the immediate thought I had was how fascinating it is that his latest company is Affirm, and it's basically doing the exact same stuff with this. All the powers built in this numerical backend, it's relatively commoditized product seems very similar. And I would guess he's using a lot of the lessons he picked up at PayPal building Affirm.

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Jimmy Soni (00:49:30):

And I think one of the lessons, at least for me, was I didn't appreciate... There's this line in the book from Luke Nosek, he said, "Fraud was our tuition." And he said, "By experiencing fraud, it's how we became better at fighting fraud." And I think it's one of the things that is increasingly written about. I've seen it in a couple other places from writers who are writing for a startup audience, about this idea that if you actually have zero fraud on your platform, you have a problem. You almost want to invite similar.

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Daniel Scrivner (00:49:55):

It's not popular.

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Jimmy Soni (00:49:56):

Yeah, you want to invite some fraud to see what you'll do to defeat the wrongdoing. Now granted, with a payment system, it's a little different because you're tied intimately into the financial system, which is heavily regulated. So there's a whole different set of things they have to deal with. But I think the general principle, which is that bad things that happen on your platform are may not actually be bad things.

‍

(00:50:19):

And I've sort of explained this to authors, sometimes authors will get really frustrated that there are pirated or PDF versions of their book floating around on the internet. And my thing that I always tell them is, "Look, finding pirated versions of books is actually harder than you think, and there's some risk involved. So if your stuff is good enough to be pirated, you're really doing something right and I wouldn't worry about it too much."

‍

(00:50:44):

I mean, obviously I'll have fight the fraud on its platform, but I do think of that as one of the other lessons, which is even the things that happened to you that could be disastrous, like fraud almost tanked the company, meaning PayPal. Fraud is also the reason that they succeeded wildly beyond what everybody expected. Fighting fraud is what made them succeed wildly.

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Daniel Scrivner (00:51:05):

Yes. And just add onto that, the way they were able to solve the fraud problem is but with all the data from the initial fraud. That without all that initial fraud, they wouldn't have had the data to be able to do it.

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Jimmy Soni (00:51:15):

That's exactly right.

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Daniel Scrivner (00:51:19):

And so I don't know. You have to clearly make some mistakes in order to clean up those mistakes, and I think there's just some really interesting lessons in there. I want to talk about one more thing that feels very timely, which is that PayPal was really built in a dot-com bubble, in a massive market meltdown, especially in venture capital. And there's times in that book where Elon's kind of reflecting back. And I was like, "Yeah, it was an incredibly rough experience. Here we are at the beginning of 2023. We're in something that feels like it could become a recession. It's been very challenging, kind of a tech sector."

‍

(00:51:50):

I guess how do you think about the role that building PayPal in a downturn played on in the company's success? And I guess any advice or reflections you would share with founders today that are building in what feels like a really challenging environment that they can draw some hope from PayPal's story?

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Jimmy Soni (00:52:08):

Yeah. This is going to sound a little counterintuitive, it's one of the key ingredients to the company's success is it was built during a time when the bottom fell out of the internet. I mean, this was a bloodletting within the public markets like the Nasdaq, as well as private companies that simply ran out of gas and could not move forward.

‍

(00:52:36):

I would say a couple of things. One, it raised the stakes of every decision and every move because you didn't have unlimited runway. They closed a hundred million round, which is a big number back then. Not as big now, but closed a big round in March of 2000. And right away the downturn starts. And what their board is telling them is, "Look, you're not going to get another nine-figure round from US investors, just not going to happen." By the fall, high-flying dot-coms like pets.com are filing for bankruptcy.

‍

(00:53:12):

I think Amazon's stock price during this period dropped to single digits. That was the last time that it was ever in the single digits. And so this is a big serious downturn. What it forces the company to do do is to get very rapidly geared up to fight fraud and to extend their runway as far as they can, right? Because they closed this big round. But one of the things that the pressure from the external pressure does is it says, "Okay, we're not going to survive forever, so we got to get this company to a place where we can actually make the numbers work." And the numbers were not working in early 2000 and mid-2000. It is part of what precipitates the leadership challenges in the summer of 2000, the removal of Elon, all these things follow from that.

‍

(00:54:01):

But I would say that there's been a few pieces written on this. Downturns and financial pressure can be hugely clarifying. The company had to abandon the things that it was doing that weren't going to go anywhere. It had to focus on fraud and really just drill down to solve it, just figure it out or else that was it. It was done. I mean, they had at five, six months of runway left total. And this is PayPal, right? With the, quote, end quote, "PayPal". That's like no runway, limited time, big problems. And that pressure, it's hard to create that kind of pressure. It's hard to manufacture it.

‍

(00:54:36):

You could try. But what I would say is there was somebody that said to me... We had the experience of near death all the time. There was this website that cataloged all the failures of the dot-com era. And one employee relayed to me, he said, "Some of us would wake up, and every morning we would go on that site and we would expect that that was the day that PayPal was going to be like, 'Oh, PayPal's filing for bankruptcy.'" But I would say that it was generative pressure. It wasn't pleasant, but it was generative pressure. Meaning, when you can't be assured of another round of financing. You have to get more creative.

‍

(00:55:15):

I'll give you another example even. Their next set of fundraising, a lot of that money came from abroad. They had to sign agreements and deals with banks around the world, find ways to figure out how to make partnerships so they could raise the funds from outside the United States because the internet still had a halo outside the United States. But that also extended PayPal's reach into all these other foreign markets. And so it became generative pressure.

‍

(00:55:36):

We're facing something similar now. And actually I think David Sacks has published about this in public saying, like, "This is the time. The startups who succeed now will succeed far into the future." Because you have to take every piece of your operation, sort of strip it to its component parts and say, "Is this adding value or is this not?" PayPal went through a very... Like this whole book is sort of a catalog of near death experiences, and a big part of it is that period from early 2000 into 2002. And with September 11 sandwiched right in the middle.

‍

(00:56:05):

And so you didn't just have financial pressure. You had a terrorist attack on American soil in the heart of the financial district, and no companies were going public. This was one of the most difficult times in the American economy at the sort of early part of this century, and they survived it. And I think that there's definitely lessons, but I would say the lesson are the pressure can be productive.

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Daniel Scrivner (00:56:29):

Which I think is a great lesson to take away. Just one way to maybe sum it up is it feels like going into an environment, like this is The Founder, you have to put on the no bullshit glasses. And it's basically, you look at every part of your business. And I think the way you described, it's totally right. And there's even a lot of this in the book where there was, I'm sure I'm going to butcher it.

‍

(00:56:47):

But one of the things I was also really impressed by is the financial discipline, which I'm sure is clearly colored by the environment they were building in. But they generally, Peter Thiel and Max Levchin, looked very harshly on expenses. And really only if it was going to improve the product or add value to the company, would they be able to green light it. And that's sort of the environment that we're in again today.

‍

(00:57:08):

You've been amazingly gracious with your time. I have to cover a little bit of research and process just because I think your process is particularly fascinating. So I'm going to try to keep this short, but I want to ask a couple of questions. And where I wanted to start was I'm just going to read a little bit. You have a section in the back of the book called A Note on Sources and Methods. I'm just going to read the first two paragraphs and maybe that's a way to launch us off.

‍

(00:57:30):

"I wrote this text roughly two decades after the events covered in these pages took place. My prior books were historical biographies, and I began this project in a fashion similar to those. To start, I created an extensive archive of every book article, scholarly paper in similar published reference to the company PayPal and to its antecedent companies, FieldLink, Infiniti, and x.com. Whenever possible, I try to stick to those items published from 1998 to mid-2000s. I assembled a spreadsheet of every blog post, interview, and media appearance by the early founders and employees most associated with PayPal. Then read, watched, and listened to each one of those appearances and mined them for nuggets. Those thousands of articles and hundreds of hours of footage proved essential, particularly recollections closer to the events in question."

‍

(00:58:16):

And it's literally three pages on your process, and that's followed up by just probably the most organized notes section I've ever seen in the back of the book with references on what you did. And so the reason I wanted to read that is I think your research process is incredible. And one of the things I want to bring up in a second is kind of a fact-checker. Talk a little bit about how intensive this research process is. Because I guess one question I have is you're writing for five years, is there a window in the beginning that it's all research? Does this extend all the way? Just kind of give us an overview in a sense for what that looks like.

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Jimmy Soni (00:58:49):

The honest strategic answer is when you do a book, you depend on some of the processes that you had before, but you build new process along the way depending on what kind of book it is. So for me, I was someone that didn't know even some of the names that we've talked about. They weren't in my day-to-day vocabulary. I had maybe heard of them, but I didn't really know them. And so for me to get familiar with the subject matter, I just had to go kind of crazy and assemble a document that had every single thing these people had done and go through it.

‍

(00:59:29):

And what I did was for each person I was interviewing, I would build a version of this. So a big spreadsheet where I'd go through and honestly just try to go through. Even if I listen to the same story 5 times, the same joke 10 times, I would go through and I would listen to it over and over and over again. And that allowed me to see the full dimensions of the story I was working with, to pull great quotes from different places like that quote from Elon about recursive self-improvement.

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(00:59:55):

And it meant that when I was going into interviews, I wasn't going to ask them stuff they'd covered elsewhere. A big thing was just not asking the same questions because I knew their time with me was going to be so limited, because their time is just limited in general. And so I made it a priority to do all of this work before I ever went into the room with them. And then that's sort of part A.

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(01:00:16):

But part B is your question about timing. When you start, you're kind of doing each piece at once. You try to get words on the page because it's sort of getting to what you might call an MVP. You're trying to get to a place where even if you've got something bad, you're looking at something to see how it fits together. And then you revise and you revise and you revise, and you revisit your outline. Part one, step one is really the outline that drives the writing. Then you try to write as much as you can based on the interviews you have while you're also getting interviews, doing emails, trying to get sources that you sort of rinse and repeat for several years. You kind of chunk away at doing the different components of the chapter.

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(01:01:01):

I have a spreadsheet where I would move. It's vertical. You'd go chapters, 1, 2, 3, all the way down to chapter 18, or whatever it is. And you just keep... The most satisfying moments were when I would copy and paste a Google Doc link into the Google Sheets link next to the chapter that I corresponded to. That was the best moment. It was the moment I could take a breath. And you just do that over and over again. I stored everything in the cloud so I could have easy access to revisions.

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(01:01:28):

The very end of it, and this is just a personal thing, is I had end notes and notes and citations for everything, but I went back and basically would go through and look at each quote or example and see if I had cited it appropriately. And if I hadn't, I had a problem. I had to go figure out where I found that information, dig back through things. Mostly it was a pretty easy process. The last part of it, the kind of last six months. People don't know this. Publishers don't pay for fact-checkers. They'll pay for lawyers because they don't want to get sued, but they don't pay for fact-checkers.

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(01:02:01):

And so I paid for one of the... He was a total godsend. His name is Ben Kalin. He was an amazing fact-checker. And what he did was basically just beat me up for six months. He would go through and he would say, "You said 1999 here, but I'm seeing 2000 in this other place. Did you get the fact right?" And he did this three times all the way through with the book. And it was at an excruciating, awful process. I mean, it was really bad. Because what he's essentially doing is forcing me to prove the thing that I think is right. And I can't thank him enough.

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(01:02:36):

I mean, that process is the reason the book stands up because he had to go through and say, "I don't think you have this quote right. He said this word. In your audio, he says it like this. Are you sure you have this right? Or do you want to check with your source?" So that's the 10,000-foot view of the process. I would say that what works for me is if I just do research and don't write, you just procrastinate on the hard part. But if all I do is write and don't research, the book ends up as vapor. It just ends up as nothing. So I have to do both.

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(01:03:08):

And my process was always to start with the writing first. Just because it stinks so much to do, it's not pleasant. I'd always start with that. Do as much writing or hit my word count totals for the day, then sort of dive into more research. And I would just do that day after day after day after day. And I wrote the note on sources and methods. Because honestly, Robert Caro wrote one of those in his books. He writes about how he gets to the facts that you read on the page. But you also do it so that if somebody ever wants to explore the story again or has a sense of where they want to go with it, you're sort of leaving it for a posterity too. There's a little bit of like message in a bottle type stuff that you're trying to do.

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Daniel Scrivner (01:03:48):

I want to ask a different question and I'm hoping that there's something here. And the way I was going to ask it is... I think it's very clear from your book that just the amount of research is off the charts. I mean, just the amount of individual things, whether it was written stuff for video interviews, your interview conversations, just a huge variety. I have to imagine that the more research you do, potentially makes the next part in the process more challenging, which is you now have all these disparate data points that you have to weave together into some sort of narrative.

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(01:04:21):

And I guess just the kind of open-ended question I wanted to ask you is how do you do that and do you have any tips for people that... Because it just feels like it's an important part of the process. There's like you've expanded your knowledge base by doing all this research, and design is kind of a sense that you have to first go wide, then you have to go tiny again. It feels like that same thing applies here. Any advice for people? Any thoughts?

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Jimmy Soni (01:04:43):

Yeah. So that's a hundred percent how it works. So if we were to walk through the short version of how a chapter starts, blank page chapter. Where it starts is me copying and pasting a volume of stuff that I've written in this software called Scrivener, which is this sort of big... A lot of novelists use it, playwrights use it. And I copy and paste this massive volume of text.

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(01:05:07):

So let's say the chapter's going to be 5,000 words. I'm probably copying and pasting somewhere around 10 to 15,000 words. Some of it's just random thoughts I wrote down, some of it is quotes. And it's all just this big mess. And I move it into Google Docs and I start working. And I chisel and I chisel and I chisel, and finally I have something resembling a chapter. In that chiseling process, some stuff has been taken out. I found out some quotes are duplicative, I signed out some stories weren't true. So I discard all of those. And then I've got at least the first draft of a chapter, but I definitely start with way more material than I can possibly condense down.

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(01:05:42):

The total amount of writing was, I think, over three times the book you're holding in your hand. So yeah, so I cut a lot because I don't want it to be war and peace. It's like people have short attention spans as it is. We're in the TikTok era. I can't do war and peace. But the key point, the salient point is you always start with a ton of material and you kind of wean and you whittle away at it. The interesting thing, this I did not really truly appreciate until this book.

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(01:06:13):

There is some value in seeing it as a PDF where it's laid out as a book. Even the difference between my Google Docs and my printed chapters is really substantial. I made a lot of PDF edits, and I was super annoying to people. But I would say that the principle in general is you might have a draft of something or a draft of a product or a version of a product that lives somewhere. And maybe you're seeing it in your computer. You're seeing the mobile version of something you're designing on your computer, you won't really know what it's doing until you see it on your phone. Or in my case, I wouldn't really know what the chapters are like until I see them in PDF form.

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(01:06:57):

And here's why. Spacing. You don't know how things are spaced, you don't know where the separators are. You sort of don't feel it, right? And so I think if I had a lesson for myself coming out of this, I want to get to that more quickly. I want to get to that version of it. Not what I think the MVP is, but what the actual. Like, it's actually in a form that looks like a book because my editing changed completely as a result.

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Daniel Scrivner (01:07:22):

Well, this is one of those fortunate interviews where I have probably 20 questions that I would love to ask you, but we don't have time today. So I just want to say just a massive thank you so much for coming on, Jimmy. I'm a huge fan of your book. I would love to have you on again once I can be able to consume and go through your Claude Shannon book. So thank you so much for the time. Thanks for coming on.

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Jimmy Soni (01:07:42):

Thank you. This was so fun. You asked a lot of questions I hadn't been asked before. This was so fun to do and to relive some of these stories. And hopefully, to leave people with things that... Again, the non-writers, some things that can help them, not just what's in the book, but some of the process of doing the book.

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Daniel Scrivner (01:08:01):

Yes, I think that's broadly fascinating. And it's also something that's really undercovered. I mean, one of the things that I really try to do, and thank you so much for indulging me, is this interview is just so much fun because we got to talk about broad level ideas, really specific tactics, your process. And I think there's stuff that we can take away from all of those. So thank you so much. This has been so much fun.

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(01:08:20):

And I can recommend people listening. I will include this many places in the show notes. But highly, highly, highly, highly recommend for any entrepreneur that you read The Founders. It's the best book I've ever seen of an intimate account of the creation of a company. Obviously everyone knows PayPal. So thank you so much. I really appreciate it, Jimmy.

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On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today. 

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