Google Mafia vs Paypal Mafia

With the newfound wealth from the Google’s stock options, it seems that ex-Googlers would like to follow the path of ex-Paypal employees, who are turning the IT industry upside down (source: NY Times).

However, the ex-Paypal team was much smaller than the current size of Google. So I don’t think every ex-Googler has learned what it takes to build a successful startup. It’s amazing when you look at the companies that the Paypal Mafia has founded in recent years. For example, YouTube, LinkedIn, Slide, Yelp, Geni, SpaceX and Kiva.org. Paypal is not the only successful story on the Internet. I wonder why their people can build up successful businesses in such a consistent way…I really want to know what they have learned in their venture and why almost everyone in their team has become serial entrepreneurs. We are not only talking about the founders of Paypal. Even their early employees have become great entrepreneurs now.

If you want to get some insights into Paypal’s early period, I highly recommend you to listen to this podcast by the founder of LinkedIn, Reid Hoffman, one of the early members in Paypal. I am really surprised when I know that none of the members in their team had experience in the banking or financial industries. Somehow, someway, they are able to create the online payment and transaction services that have changed the course of the Internet.

One of the reasons why their new ventures are so successful is because they are still super-connected after leaving Paypal. They will help each other using their own network, even though they are not working together anymore.

Recently, I have read an article written by a famous business writer in Hong Kong. He talked about one of the weaknesses of Chinese is envy and jealousy. People are always worry about others trying to steal their ideas. If China really wants to become an international powerhouse, their local companies should hire more people from around the world so that they can learn how to operate a business in the western world. Also, it would be great if someone can create similar business Mafias in China, Hong Kong or Taiwan. There are really no role models that young people can look up to at this moment.

More about the Paypal Mafia:

on Fortune Magazine

on Inc Magazine

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There is an article in NY Times today talking about how Las Vegas benefits from a booming Chinese/Asia economy and a weak US dollar.

The writer believes international tourism is increasing because the US dollar is on sale. Also, “wealthy Asian players are risking — and losing — money in record numbers inside the city’s most exclusive V.I.P. lounges”. I totally agree with this point as I always know that Chinese like to gambling (or lose money). Chinese love to dream about winning BIG in the lottery or casino. I am lucky that I don’t have this trait at this moment. When can we understand that most lottery winners will declare bankruptcy eventually?

I am really surprised The Venetian is adding another 3,200 suites in Las Vegas after building one of the biggest casinos in Macau. I wonder how well they have controlled their cost on these projects. The world economy is not very stable at this moment and the stock market in China is not healthy either. Many of them are just wealthy on paper. What will happen if the stock market crashes in China after Beijing Olympic?

Anyway, based on this example, we can understand the huge potential of the online gambling market in Asia. Online gambling is always one of the most profitable categories in the Internet. But, of course, it will take forever to get approval from the government. Let’s see who will be the first-mover in this market.

It is sad when you read something like this in a famous magazine. In the article, they rated the IPO of Blackstone Group as one of the Worst Business Deals of 2007.

Before the IPO, everyone in the industry knew that the founders of Blackstone wanted to cash out from the highest point of the private equity hype. But, apparently, the Chinese Government or the one who recommended this deal (Antony Leung) thought it was a good deal. It is hard to believe a government is chasing some trendy investment products… They really thought that Private Equity firms can leverage all their deals forever? Come on…

The Chinese government invested $3 billion in this deal and Blackstone’s stock price has already dropped around 35%. I believe this quote on TIME magazine summarize the whole incident very well: “A classic case of selling at the top to the suckers”… what can you say…Of course, you are only a loser if you don’t try it again. Hopefully, they have learned a very valuable lesson this time.

Just reading this news: “Tokyo Seeking a Top Niche in Global Finance” on New York Times recently.

The author talks about how Japanese took apart US products, like cars and TVs, to learn how to make them better. Now Japanese want to use the same formula to develop their financial industry.

To be honest, I bet many young folks in this generation think that cars and TVs are actually invented by the Japanese because the quality of their products are superior than those in US. It’s amazing that they are so successful that no one really cares about who the original pioneers of those products are. But, actually, Japanese is not the only one who has overtaken the forerunner in the hisotry of business. Microsoft Windows > Mac OS, Internet Explorer > Netscape, Google > Overture/Yahoo, Toyota > GM/ Ford…etc. According to the article, Japanese is not doing a good job on this project currently.

No matter what the outcome of this project is, I really admire the way they have approached this problem. At this moment, Chinese is pretty well known of copying stuffs (e.g. we can copy the whole Disneyland in Beijing). By the time they learn how to STEAL something from other countries, the country will become a real power house in the world. However, at this moment, I can’t see any promising companies doing that. For example, for Lenovo, besides changing the IBM logo of their laptop, what did they do to improve their products? They acquired the PC and laptop division of IBM because of the branding value but now they decided to change the logo back to Lenovo. I agree that they have to do this in the future but not right now because Lenovo is still not a household name in the US. Hopefully, they don’t have to change the logo back to IBM in the future…

I really like the following quote in the article, “if Japan did not open its markets, it will just be a small Asian country”. This can definitely apply to Hong Kong and China. After living in the US for 5 years, I realize DIVERSITY is one of the most important reasons contributing to their economical success. So if other countries want to duplicate the success of the United States, they better find out how to attract talent from all over the world. It’s not a secret. It’s a reality. If we can’t do that, no matter how hardworking we think we are, we have no way to emulate the US success.