we needed two Palm Pilots, one for the receiving and one for the sending. I was
fully prepared. They were marked, “Sender A, Sender B, Sender C, Receiver A,
Receiver B, Receiver C.” So I had this stack of Palm Pilots, I hopped in a car,
drove to Buck’s, and it was like 9:50 a.m. Peter was getting very anxious about
the whole thing. That’s where everything becomes very blurry, because I was so
tired by then.
There were about a dozen TV cameras and journalists—there was really big
coverage. We did the...

them, “No. Don’t do it.” So for a while we were fighting, tooth and nail, crazy
eBay people: “Go away, we don’t want you.”
Eventually we realized that these guys were begging to be our users. We
had the moment of epiphany, and for the next 12 months just iterated like crazy
on the website version of the product, which is today’s PayPal. Sometime by late
2000, we killed the handheld one because we peaked out at 12,000 users. They
were still using it a little bit, and they were really upset when we...

while, Peter took some time off. The guy who ran X.com became the CEO, and
I remained the CTO. He was really into Windows, and I was really into Unix.
So there was this bad blood for a while between the engineering teams. He was
convinced that Windows was where it’s at and that we have to switch to
Windows, but the platform that we used was, I thought, built really well and I
wanted to keep it. I wanted to stay on Unix.
By summer 2000, it seemed like the Windows thing was...

prohibitive.
So I started freaking out over it, and this intern and I wrote all sorts of packages—
very statistical stuff—to analyze “How did it happen; how do we lose
money?” By the end of the summer, we thought, “The world is going to end any
minute now.” It was obvious that we were really losing tons of money. By midsummer,
it was already on a $10 million range per month and just very scary.
Livingston: Did the rest of the company know you were right?
Levchin: Through the summer, I think various...

It’s based on the assumption of all sorts of convoluted guesses on our part, but
the guesses turn out to be mostly right.
We actually had these human investigators, like 20 to 30 human investigators,
that would try to unravel particularly large fraud cases and see if we could
recover some money or send the Feds after somebody. We didn’t really have
much success sending people after criminals. All they’d try to do is see where
the money went and see if we could recover some of it before it left the system.
...