Joining the Mafia 107
Jeremy Stoppelman was one of them. He worked as an
engineer at PayPal, and would later found the company
Yelp. “We had been rivals, so it was awkward,” Stoppelman
said. “And that awkwardness turned into total dysfunction
and warfare. Most X employees ended up leaving or getting
fired. The culture was really an intellectual pissing contest,
and some people didn’t like that.” But the battle between
the former companies ended. PayPal realized it was a better
idea to focus on the battle against other companies. eBay
had by now developed a similar service called Billpoint.
They also needed to win the battle against fraudsters.^260
PayPal together with all other similar services had
severe problems with fraud. In the beginning, they didn’t
know they would need to take fraud into consideration.
“Fraud is going to eat you for lunch,” they were told. Now
they lost $10 million per month. “It was crazy,” Levchin
said. One fraud ring cost them $5.7 million over a four-
month period. “We can’t switch to Windows now. This
fraud thing is most important to the company. You can’t
allow any additional changes,” Levchin told Elon.^186
A criminal could buy stolen numbers and open fake
PayPal accounts with the help of a computer program. The
fraudster could then send payments through these accounts
to minimize the traces from the crime. A cardholder who
had lost money because of the fraud could contact PayPal
and get back the money. It was up to PayPal to minimize
the fraud by developing algorithms that judge the risk of
each transaction. They also had 30 human investigators
that tried to unravel the larger fraud cases and see if PayPal