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How is it that so many seemingly incredible people come out of PayPal, and PayPal still sucks so much? The all-star list is insane, it keeps growing, and yet P

How is it that so many seemingly incredible people come out of PayPal, and PayPal still sucks so much? The all-star list is insane, it keeps growing, and yet PayPal still that can't seem to do anything new.

deleted 12y ago
[deleted]
Karunamon 12y ago
They don't need to even do anything new feature-wise; they need CS that doesn't suck goat cheese through a coffee stirrer. If I call in with a problem, give me someone that can both answer my questions and put fingers on the keyboard and fix said problem. Not really that hard. No more indian call centers, no more useless CS, no more hiding need-to-know information behind the all-consuming veil of "fraud protection" (something its competitors don't seem to have that much of an issue with). That's 90% of your problems fixed right there. The other 10% would be the inconsistent enforcement of rules.
- 001sky 12y ago
  CS is expensive and the margins on micro-transactions is small. Think about the order of magnitude: (1) An average 2.5% transaction fee on a $100 dollar e-bay transaction is US$2.50 in revenue. (2) The cost of sending someone a "paper bill" in the mail (fully amortized) is approximately US$2.00, or 80% of the revenue from a $100 sale. (3) at $8.50/hour, a minimum wage worker would expend >80% of revenue by spending 15 minutes to help you. (4) A "quick fix" with a paper-trail (2+3 above)quickly turns the transaction negative ($2+2=$4>$2.50) at the margin. (5) Since every fix is an instant loss, profit maximization implies "fix minimization"--at least as one component of strategy. (Disclaimer: This is all made up math.)
  - tehwebguy 12y ago
    I assumed your parent was talking about customer service from a vendor perspective, which makes more sense. At a certain volume threshold ($5k / mo? $10k? I forget) the customer service experience absolutely improves, but not enough.
jacquesm 12y ago
Yes paypal 'sucks'. But the problem is not that it sucks. The problem is to do better. And it is quite possible that anybody that has ever tried to do better ended up with something that sucked even more than paypal. Combating fraud is hard, at scale with half the worlds petty criminals seeing you as the obstacle between them and their victims you're in for a rough ride. I wouldn't judge them too harshly. (Even if I personally will never use them ever again I do appreciate the kind of issues they have to deal with.)
- intull 12y ago
  True, combating fraud is very hard! And PayPal has used a very clever strategy there. PayPal is changing now, a LOT. After David Marcus and Bill Scott, things are now in motion for the better! I'm sure in an year or two, we'll see PayPal in a much different way than what it is now.
Omniusaspirer 12y ago
How much new can they really do as a payment processor? I'm sure there's some little things they could dabble in but realistically the only things people want from Paypal are less fees, less account closures/theft from account holders, faster transfers and overall better customer support. Paypal doesn't need to innovate, they need to fix the obvious issues that relegate their service to a "barely workable until the instant someone better comes along" paradigm.
- logicallee 12y ago
  > How much new can they really do as a payment processor? dude, how can you say this this year.
  - Omniusaspirer 12y ago
    To clarify: How much new can they do as Paypal? The company has a horrific public image (due to the reasons I listed) and has arguably been getting outmaneuvered innovation-wise in the payment processing business for many years now. The company is a giant just waiting to be toppeled. Disclaimer: I may very well look back in 10 years and feel like a fool for the above opinion, but my current experiences have me pretty self-assured.
DigitalSea 12y ago
This is a problem with most large companies. Once you reach a certain size, you encounter problems with scaling. Paypal is such a big company the only way they and other companies like them innovate is by acquiring other companies and teams because it's cheaper and easier. The amount of friction within a company like Paypal I would imagine is quite high. Not even those at the top of companies like these can change things at the flick of a switch. Things move very slowly in large companies, this is why smaller startups are able to come along and shake things up so easily before being acquired. It is how it is.
- yuhong 12y ago
  https://news.ycombinator.com/item?id=6455951 https://news.ycombinator.com/item?id=6455951 I wonder what ended up happening inside PayPal since this post.
  - rehabindian 12y ago
    Original Poster from the linked thread, Same thing, different day. Most talented people I know have left or "left" (including myself to found my own company), there is a lot of internal Game of thrones. Some of us saw this coming (based on publicly disclosed stock unloading by David) Now that DM is gone, I am very bearish on PayPal. Good news is he can now openly mentor and advice entrepreneurs in the space. Shower thoughts: Maybe I should write a full blog post with all the spicy stuff! (with GOT memes)
    - yuhong 12y ago
      So why did he give up? What do you think of Bill Scott BTW? What about Braintree?
      - rehabindian 12y ago
        One can only speculate. I would refer you to his statement, seems like he is more interested in "getting shit done" than getting drained by bureaucracy. As for Bill Scott, its a 2 edged sword. I think he runs a good ship, and great guy if you are part of his team or enjoy his patronage or benefit his goals/vision. Him and his team understand technology, appreciate doing what they do. They are one of the forward looking tech teams at PP. But, it comes with usual red herrings though.
panarky 12y ago
PayPal and eBay are hugely vulnerable. They've underinvested in infrastructure, their technology is old, and they've become slow and bureaucratic. Worst of all, their ideas are stale and the user experience is dreadful. PayPal's fat margins aren't justified by the service they provide, only by the lack of alternatives. But new alternatives are launching much faster than eBay can respond. Square has become a well-run, genuine alternative. BitPay / Coinbase are still very small, but the cryptocurrency wildcard at least shines a light on what money transfer should cost. Amazon is quietly expanding their payments footprint. The famous Bezos quote seems appropriate here: "Your margins are my opportunity." Apple exposing their Touch ID API will level the playing field, exposing PayPal to more competition and margin pressure. Look out if Apple starts using their billion-credit-card database to get into payments themselves. If Facebook/Whatsapp can payment-enable messaging and do it at a lower cost, PayPal's raison d'etre starts looking pretty questionable. And now eBay leaking personally-identifiable information on 150 million customers isn't helping maintain trust or brand image. The breach couldn't have happened at a worse time. We could be looking at the Blockbusterization of eBay and PayPal. The stock price is starting to reflect this reality, so look for more key people to leave in coming months.
- nostromo 12y ago
  Yes, I think Ebay will die by a thousand cuts. There won't be one grand disruption (except maybe Amazon or Alibaba), but there will be many small vertical disruptions, like Etsy. The real question is why Facebook is poaching from EBay and not vice versa.
  - irtefa 12y ago
    Because they are failing to understand the importance of having smart people on board. I did an internship over there few months back. People are generally not motivated. They have below par hiring practices, especially in engineering.
    - panarky 12y ago
      As you were posting this ... Another Exec Is Leaving PayPal: Senior Engineering Director April Chang Goes To Eventbrite http://www.businessinsider.com/another-exec-leaving-paypal-april-chang-eventbrite-2014-6#ixzz34CDa5G31 http://www.businessinsider.com/another-exec-leaving-paypal-a...
logicallee 12y ago
How can so many great scientists come out of Eastern Europe, and Easern Europe still sucks so much?
r00fus 12y ago
When did the eBay acquisition occur?

deleted 12y ago

[deleted]

Karunamon 12y ago

They don't need to even do anything new feature-wise; they need CS that doesn't suck goat cheese through a coffee stirrer. If I call in with a problem, give me someone that can both answer my questions and put fingers on the keyboard and fix said problem. Not really that hard. No more indian call centers, no more useless CS, no more hiding need-to-know information behind the all-consuming veil of "fraud protection" (something its competitors don't seem to have that much of an issue with). That's 90% of your problems fixed right there. The other 10% would be the inconsistent enforcement of rules.

001sky 12y ago
CS is expensive and the margins on micro-transactions is small. Think about the order of magnitude: (1) An average 2.5% transaction fee on a $100 dollar e-bay transaction is US$2.50 in revenue. (2) The cost of sending someone a "paper bill" in the mail (fully amortized) is approximately US$2.00, or 80% of the revenue from a $100 sale. (3) at $8.50/hour, a minimum wage worker would expend >80% of revenue by spending 15 minutes to help you. (4) A "quick fix" with a paper-trail (2+3 above)quickly turns the transaction negative ($2+2=$4>$2.50) at the margin. (5) Since every fix is an instant loss, profit maximization implies "fix minimization"--at least as one component of strategy. (Disclaimer: This is all made up math.)
- tehwebguy 12y ago
  I assumed your parent was talking about customer service from a vendor perspective, which makes more sense. At a certain volume threshold ($5k / mo? $10k? I forget) the customer service experience absolutely improves, but not enough.

jacquesm 12y ago

Yes paypal 'sucks'. But the problem is not that it sucks. The problem is to do better. And it is quite possible that anybody that has ever tried to do better ended up with something that sucked even more than paypal. Combating fraud is hard, at scale with half the worlds petty criminals seeing you as the obstacle between them and their victims you're in for a rough ride. I wouldn't judge them too harshly. (Even if I personally will never use them ever again I do appreciate the kind of issues they have to deal with.)

intull 12y ago
True, combating fraud is very hard! And PayPal has used a very clever strategy there. PayPal is changing now, a LOT. After David Marcus and Bill Scott, things are now in motion for the better! I'm sure in an year or two, we'll see PayPal in a much different way than what it is now.

Omniusaspirer 12y ago

How much new can they really do as a payment processor? I'm sure there's some little things they could dabble in but realistically the only things people want from Paypal are less fees, less account closures/theft from account holders, faster transfers and overall better customer support. Paypal doesn't need to innovate, they need to fix the obvious issues that relegate their service to a "barely workable until the instant someone better comes along" paradigm.

logicallee 12y ago
> How much new can they really do as a payment processor? dude, how can you say this this year.
- Omniusaspirer 12y ago
  To clarify: How much new can they do as Paypal? The company has a horrific public image (due to the reasons I listed) and has arguably been getting outmaneuvered innovation-wise in the payment processing business for many years now. The company is a giant just waiting to be toppeled. Disclaimer: I may very well look back in 10 years and feel like a fool for the above opinion, but my current experiences have me pretty self-assured.

DigitalSea 12y ago

This is a problem with most large companies. Once you reach a certain size, you encounter problems with scaling. Paypal is such a big company the only way they and other companies like them innovate is by acquiring other companies and teams because it's cheaper and easier. The amount of friction within a company like Paypal I would imagine is quite high. Not even those at the top of companies like these can change things at the flick of a switch. Things move very slowly in large companies, this is why smaller startups are able to come along and shake things up so easily before being acquired. It is how it is.

yuhong 12y ago
https://news.ycombinator.com/item?id=6455951 https://news.ycombinator.com/item?id=6455951 I wonder what ended up happening inside PayPal since this post.
- rehabindian 12y ago
  Original Poster from the linked thread, Same thing, different day. Most talented people I know have left or "left" (including myself to found my own company), there is a lot of internal Game of thrones. Some of us saw this coming (based on publicly disclosed stock unloading by David) Now that DM is gone, I am very bearish on PayPal. Good news is he can now openly mentor and advice entrepreneurs in the space. Shower thoughts: Maybe I should write a full blog post with all the spicy stuff! (with GOT memes)
  - yuhong 12y ago
    So why did he give up? What do you think of Bill Scott BTW? What about Braintree?
    - rehabindian 12y ago
      One can only speculate. I would refer you to his statement, seems like he is more interested in "getting shit done" than getting drained by bureaucracy. As for Bill Scott, its a 2 edged sword. I think he runs a good ship, and great guy if you are part of his team or enjoy his patronage or benefit his goals/vision. Him and his team understand technology, appreciate doing what they do. They are one of the forward looking tech teams at PP. But, it comes with usual red herrings though.

panarky 12y ago

PayPal and eBay are hugely vulnerable. They've underinvested in infrastructure, their technology is old, and they've become slow and bureaucratic. Worst of all, their ideas are stale and the user experience is dreadful. PayPal's fat margins aren't justified by the service they provide, only by the lack of alternatives. But new alternatives are launching much faster than eBay can respond. Square has become a well-run, genuine alternative. BitPay / Coinbase are still very small, but the cryptocurrency wildcard at least shines a light on what money transfer should cost. Amazon is quietly expanding their payments footprint. The famous Bezos quote seems appropriate here: "Your margins are my opportunity." Apple exposing their Touch ID API will level the playing field, exposing PayPal to more competition and margin pressure. Look out if Apple starts using their billion-credit-card database to get into payments themselves. If Facebook/Whatsapp can payment-enable messaging and do it at a lower cost, PayPal's raison d'etre starts looking pretty questionable. And now eBay leaking personally-identifiable information on 150 million customers isn't helping maintain trust or brand image. The breach couldn't have happened at a worse time. We could be looking at the Blockbusterization of eBay and PayPal. The stock price is starting to reflect this reality, so look for more key people to leave in coming months.

nostromo 12y ago
Yes, I think Ebay will die by a thousand cuts. There won't be one grand disruption (except maybe Amazon or Alibaba), but there will be many small vertical disruptions, like Etsy. The real question is why Facebook is poaching from EBay and not vice versa.
- irtefa 12y ago
  Because they are failing to understand the importance of having smart people on board. I did an internship over there few months back. People are generally not motivated. They have below par hiring practices, especially in engineering.
  - panarky 12y ago
    As you were posting this ... Another Exec Is Leaving PayPal: Senior Engineering Director April Chang Goes To Eventbrite http://www.businessinsider.com/another-exec-leaving-paypal-april-chang-eventbrite-2014-6#ixzz34CDa5G31 http://www.businessinsider.com/another-exec-leaving-paypal-a...

logicallee 12y ago

How can so many great scientists come out of Eastern Europe, and Easern Europe still sucks so much?

r00fus 12y ago

When did the eBay acquisition occur?