Four years ago, I developed a tool that lets you access different social media accounts–Twitter, Facebook, LinkedIn (LNKD), etc. And it’s only when we start talking about 10-digit exits that the prospect of creating a true PayPal-style mafia becomes a reality. But a similarly promising photo-sharing site called Instagram sold to Facebook (FB) for $1 billion last year. That $35 million figure may not sound paltry. It seems worthy to note here that a young, Vancouver-based Flickr - one of the Internet’s first real photo-sharing sites - was sold to Yahoo (YHOO) for a paltry $35 million in 2005. It’s critical that tech entrepreneurs grow their companies, develop steady revenue streams, and only then think about an exit. You’ve got a good idea but limited revenue and often significant debt and - suddenly - someone shows up with a few million dollars.īut maybe it’s time we took Sean Parker’s lines from The Social Network to heart. Having been a struggling entrepreneur for most of my life, I understand the allure of selling out. But it’s the nature of the tech industry today that promising companies are spotted fast and bought cheap by the Googles (GOOG) and Microsofts (MSFT) of the world. Right now, cities all over the world are home to startups with billion-dollar potential. MORE: The Facebook tweak that killed a billion-dollar industry So what’s standing in the way of a brand new tech mob - a Maple Syrup Mafia - taking hold right in my backyard and turning Vancouver into the next global tech hub? Well, to be honest, there are a few hurdles. The city has a solid cluster of new and legacy tech companies, from Electronic Arts (EA) to mobile game developers. I’m CEO of a growing social media company headquartered not in the Bay Area but 1,000 miles north in Vancouver, Canada. So why is startup success still confined mainly to one corner of California? Why does Silicon Valley get to have a monopoly on innovation? Why aren’t new tech mafias springing up elsewhere? The Internet radically decentralized information and ideas. If that’s all there is to it, then I’ve got a question. (Thiel does believe humans can live forever.) But the likeliest explanation is a bit more mundane: The PayPal buyout gave some very young, very ambitious people the confidence to try for another big win and an experienced network to fund them. So what’s their secret? Was there something in the water? Did PayPal (EBAY) co-founders Peter Thiel and Max Levchin teach employees some Jedi entrepreneurial magic? Maybe. In fact, over the last decade, the PayPal mafia’s track record has been nothing short of extraordinary, with one promising startup after another propelled to billion-dollar status and well beyond. You may have heard of some: Facebook, LinkedIn, YouTube, Yelp, Zynga, and Kiva … to name just a few.įrom one buyout, an entire ecosystem of wildly successful tech companies was spawned. Rather than calling it a day, however, the so-called PayPal mafia went on to found and invest in a wave of new startups. Overnight, many of PayPal’s core employees got very rich. FORTUNE - In 2002, PayPal, the online payments giant, was sold to eBay for a cool $1.5 billion.
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