100: Max Levchin, Affirm CEO and PayPal co-founder

Max Levchin co-founded PayPal with Peter Thiel. The original idea wasn't the hit product.

Max Levchin co-founded PayPal with Peter Thiel. The original idea wasn't the hit product.

Affirm CEO Max Levchin learned to write code out of necessity. His mother's necessity, specifically.

Levchin co-founded PayPal, reaped a windfall from its IPO and sale, and became one of the best-connected investors in Silicon Valley. But before all that, he was a teenage refugee from the Soviet Union, figuring out how to make his mark at the dawning of the consumer Internet era.

Before the family had left Ukraine in the early 1990s, Soviet officials had given Levchin's mother a poorly translated programming manual, a PC, and a mandate: Learn to program it. Mother and son took turns reading each other the manual, and by the time they moved to the U.S., both knew how to code.

For my 100th episode of Fortt Knox, I sat down with Levchin to dig into his journey as an entrepreneur. He discussed his early failures, the evolution of PayPal, and what made Peter Thiel an ideal co-founder. We also talked about his latest company, Affirm, and why he believes it can continue to disrupt the credit card business, even if the economy cools.

1. Curiosity and creativity matter more than raw skills

Levchin and his mother taught themselves to code, and after the move to the United States, his mother worked for about 25 years in the software business. He credits this in part to his family's cultural tradition of valuing education. To me, it sounds like a real-life manifestation of the concept of a "growth mindset." If we believe there's always more to learn, we have the opportunity to constantly gain new skills and open new possibilities.

2. A brilliant team is better than a brilliant idea

It struck me that Levchin kept in touch with classmates from the University of Illinois and continued to work with them, and kept in touch with coworkers from PayPal and continued to work with them, too. (Levchin was chairman of Yelp for several years, a company started by U of I and PayPal alums Russel Simmons and Jeremy Stoppelman.) The origin of PayPal itself reads like an accident; Levchin tells me he was bouncing ideas off of Thiel, and one that had to do with cryptography and Palm Pilots eventually morphed into a massive digital payments company. Ideas come and go, but you need the right people to make them work.

3. Risk while you can

It's a lot easier to pour everything into a startup when you don't have much to begin with. That's why Levchin advises young people to start businesses before they get tied down by things like fancy cars ... or even not-so-fancy cars. PayPal was something like his fifth startup, and he says he wouldn't have had the courage to keep trying after the first four failures if he'd had much more to lose.