I think, in many ways, PayPal was the template for the modern Silicon Valley startup.
— David Sacks, former PayPal COO who co-founded Yammer. TechRepublic takes a look at the group commonly known as the PayPal Mafia — founders, early employees of the payments service — and its influence on Silicon Valley and its culture. It might be common knowledge in the valley, but it bears repeating: The PayPal sale to eBay and the subsequent departure of its people helped spawn companies that would later become pretty big deals: YouTube, LinkedIn, Palantir, Yelp, Yammer. Elon Musk, of course, founded both Tesla and SpaceX. Some of the group also became among the valley s biggest and most influential investors, including Peter Thiel, Reid Hoffman, Dave McClure and Keith Rabois.
Sacks says the cultural mismatch between eBay and PayPal helped members of the group that left take a pure approach to startups that could be replicated across a whole bunch of areas.
One key part of that approach was friendship, said Peter Thiel, who s often referred to as the head of the PayPal Mafia. I prefer the word friendship to networks, and I think the critical piece was that some incredibly deep friendships were forged. I think that is what s very underrated in our world today, Thiel told TechRepublic. As Michelle Quinn wrote recently, Silicon Valley was a land of dynamic duos early on. Members of the Mafia were part of the new wave of friends who created together, and to this day some of them continue to collaborate and invest together.
Photo: David Sacks, former CEO of Yammer (which has since been bought by Microsoft) and a member of the PayPal Mafia, is shown here in 2011. (Mercury News archives)