Max Levchin

Max Levchin

Serial Entrepreneur, Investor, & Coder. Affirm, HVF, Slide, PayPal.

THIS CHAT HAPPENED ON November 10, 2015

Discussion

Max Levchin
Max Levchin@mlevchin
Hi all, Max here. I'm the CEO of “Affirm,” the next generation financial services company offering consumer credit at the point of sale, and the Chairman of “Glow,” a women’s reproductive health company. Both companies were created and launched from my San Francisco based innovation and investment lab, “HVF.” Some of my past credits include serving as the CTO and one of the original cofounders of PayPal, helping start Yelp, founding the company “Slide,” and serving on various external boards. I'm also a proud father and husband, an avid cyclist, and self-proclaimed coffee snob. Happy to be answering your questions today, so please fire away!
Snoop Dogg
Snoop Dogg@snoopdogg · The Doggfather
@mlevchin whats ur favorite kind of dessert?
Max Levchin
Max Levchin@mlevchin
@snoopdogg 100% dark chocolate & cheese.
Ilya Zobnov
Ilya Zobnov@zobnov · Product, Analytics, Development, BizDev
Hi Max, thanks for this opportunity, and greeting from Kiev! Talking about your current ventures, to what extend your decisions are data driven? (disclaimer: I develop a real time analytics platform)
Max Levchin
Max Levchin@mlevchin
@zobnov 97.3% data-driven.
Jack Smith
Jack Smith@_jacksmith · Serial Entrepreneur & Startup Adviser
Hi Max. What is your thoughts on the "The Paypal Wars" book?
Max Levchin
Max Levchin@mlevchin
@_jacksmith mixed bag -- some stuff is spot on, some views/explanations are fairly one-sided, and a handful of factual errors. Eric was there for a lot of the action, but not all of it, and so some of that shows. Generally still an entertaining read.
Harry Stebbings
Harry Stebbings@harrystebbings · Podcast Host @ The Twenty Minute VC
Hi @mlevchin thanks so much for joining us today. Would love to hear what your career highlight is so far? What aspects of you past success do you feel will aid in your journey with @Affirm
Max Levchin
Max Levchin@mlevchin
@harrystebbings many highlights. PayPal IPO was a big day, not only financially, but as a validation of our impact, etc. Realizing that we saved the company from dying (by way of fraud-related losses) was huge (beginning of 2001). Affirm has been an awesome journey so far... Too many great people met and befriended along the way in all these adventures to count - that's the biggest highlight of them all.
Logan Graham
Logan Graham@logangraham
Hey @mlevchin. I'm doing my PhD in Machine Learning, and I love the mission of HVF. But I'm worried about data-driven innovation. Machine learning has low barriers for entry. You can't be "proprietary". What, then, is the competitive advantage of data-driven innovation? (Business strategy? Novel scenarios? Genius-level secret methods?) EDIT – adding the big question: will billion-$ businesses be built by machine learning, or will it be built on "hard" and tangible innovation like biotech, aerospace, and energy? EDIT 2 – just read your blog post on augmented intelligence. That's very very close to my research area. If you pass by Oxford, let's go to a pub.
Max Levchin
Max Levchin@mlevchin
@logangraham speed of adaptation and revision; willingness to take directional risks with your own money, which leads to gathering a proprietary data set or multiple. Re big question -- the latter -- machine learning software will chew big industries so that startups can digest them more easily.
Corley
Corley@corleyh · COO @ Product Hunt
@mlevchin thanks for joining us today! We appreciate the time. Can you tell us about one of your less known defining moments? And how has it contributed to the person you've become?
Max Levchin
Max Levchin@mlevchin
@corleyh I realized (by looking at our metrics) that credit card fraud was going to kill our startup (PayPal) and I didn't think we could fix it in time. I thought of giving up -- and one of my closest friends Scott, and my now-wife Nellie (who were present when I realized just how bad the situation was) both told me in unison to basically man up and solve it. I whined for another ten minutes, and then agreed with them that I had to. Anytime I feel like something is just too hard to do, or too big to fix, I think of that day and try to man up.
Yazin
Yazin@yazinsai · Doer
Hey Max, were you really the first inventor of CAPTCHA?
Max Levchin
Max Levchin@mlevchin
@yazinsai kinda! PayPal was creaking under the load of automated fraudulent signups, and we urgently needed a way stop it. One day I screamed at the top of my lungs to the entire engineering team "can anyone think of a task humans excel at, and computers fail?" and a brilliant coder named Dave Gausebeck answered instantly "optical character recognition!" I spent the next 72h coding it non-stop and we rolled out immediately, which had a very positive impact on the number of fraudulent signups! Later, I found out that CMU had this problem under investigation, called it CAPTCHA, and had a bunch of really nice published work on it, right around the same time. We never saw their work though, so in that sense, we did invent it too.
Jeff Umbro
Jeff Umbro@jeffumbro · CEO of The podglomerate
@mlevchin How was it working alongside Elon Musk? Hell, how does it feel to be on the same level as Elon?
Max Levchin
Max Levchin@mlevchin
@jeffumbro working with Elon is always interesting! He is obviously brilliant, and has an endless supply of very non-linear ideas around solving hard problems. He also believes unshakably in his inability to fail, which can be truly inspirational, and infuriating, in equal measure :)
Barnett Klane
Barnett Klane@barnettlklane · Software Developer, Bugcrowd
@mlevchin, what is your end goal with @affirm?
Max Levchin
Max Levchin@mlevchin
@barnettlklane to build a very long-term, truly great financial service company built with 21st century technology, yet first and foremost focused on earning and keeping its users' trust.
Yoni Blumberg
Yoni Blumberg@yblumberg · Special Projects Manager, InVenture
@mlevchin @barnettlklane That's (perhaps intentionally) quite open-ended / vague. Does the vision eventually extend beyond credit? Is the distinction important?
Faramarz Hashemi
Faramarz Hashemi@faramarzhashemi · Designer
Run us through your day. I'm mostly curious how you spend your time once you get home, or rather, when you leave the office at the end of the day
Max Levchin
Max Levchin@mlevchin
@faramarzhashemi I get up at 5:30am, do urgent email/work stuff for an hour; then get on the bike, get my energy boost for the day pedaling. then head to the office sometime between 8 and 9, depending on the length of the ride. I wind up having too many meetings, it feels, but they are all useful :) At least half the days, I try to make it home towards 6, so I can spend some time with my kids during dinner, and read them before bed. Then I get back to email/writing/etc. I try to go to bed before midnight. Sometimes I succeed.
Theoharis Dimarhos
Theoharis Dimarhos@theo_dimarhos · Marketing+Biz Dev at AngelouEconomics
Hi Max! What's your take on online schools/education? What components do you think are missing that will make them grow exponentially?
Max Levchin
Max Levchin@mlevchin
@theo_dimarhos generally a fan, but they lack the in-person interactions (and dynamics) that make traditional schooling what it is. Some new ideas in the space are impressive (HackReactor has done some work in making the online experience seem more in-person like).
mike lin
mike lin@mikelinsf · Founder & CEO, influencersTV
Did you ever have any doubts around PayPal's success? How many times did you pivot?
Max Levchin
Max Levchin@mlevchin
@mikelinsf plenty of times :) We pivoted (by my count) 6 times!
Emily Snowdon (née Hodgins)
Emily Snowdon (née Hodgins)@emilyjsnowdon · Operations @ Product Hunt
@mlevchin Thanks for being here today. 🙌During your career to date, what has been your a) most challenging moment and how did you overcome it? b) proudest moment and why? c) most surprising moment?
Max Levchin
Max Levchin@mlevchin
@ems_hodge most challenging moment: too many to pick one... A really close collaborator died very suddenly when we were both very young, during PayPal. Having to do a layoff at Slide, looking people in the eyes, and admit that I, as the CEO, screwed up. You overcome by being honest, no matter how much it hurts, with yourself, set a course, and execute. proudest moment: PayPal IPO, many other little things that had momentous importance then... and then faded as the next challenge came up :) most surprising moment: it's a daily shocker in the world of startups :) you get used to it.
Hey @mlevchin thanks for doing this, I've read zero to one and was wondering what was your experience like founding and working at PayPal? Also what are your favorite books?
Max Levchin
Max Levchin@mlevchin
@alfink92 uhm, it was.. great!? :) My favorite non-tech book is Master & Margarita. Tech-wise, I have a certain permanent love for Knuth's magnum opus, but find Structure and Interpretation of Computer Programs easier to read end-to-end quickly :)
Aashay Mody
Aashay Mody@aashaymody · Growth @ Astro
Hi @mlevchin, would love to hear your thoughts on nootropics/smart drugs and Nootrobox's chewable coffee cubes (since you are a coffee snob)!
Max Levchin
Max Levchin@mlevchin
@aashaymody love the idea, never tried any of these. would love to -- always excited to experiment on myself for the sake of marginal productivity gains!
Andrey Zagoruiko
Andrey Zagoruiko@which_might · blocktimes.io, ex-vc.ru
Max, can you please collaborate on your media consumption? Do you visit directly a subset of sites every day or you are using RSS for some blogs (which ones?) or have you delegated control over your information inbox to Facebook/Twitter and click only links from those networks?
Max Levchin
Max Levchin@mlevchin
@which_might twitter + links I find there is more or less all I use. News360 is an app I use a fair bit when I have the time.
Moses Koledoye
Moses Koledoye@mounderscore · Programmer
@mlevchin Do you see any other location in the world as having a near, if not equal, potential as that of silicon valley in the near future? And why would you want to fund a startup in a location outside S.V. or the U.S.?
Max Levchin
Max Levchin@mlevchin
@mounderscore not really. maybe NY.
Tigran Hakobyan
Tigran Hakobyan@tigranhakobian · Entrepreneur, Co-founder/CMO @ inapptics
Hi Max, Thanks for joining us! What's your favourite business book you'd advise to young entrepreneurs and why?
Max Levchin
Max Levchin@mlevchin
@tigranhakobian Some good ones from the "pure business" category: Zero to One, The Hard Thing About Hard Things, The Innovator's Dilemma, Good to Great, etc. Personally, I prefer less advice, more history. From my favorite business segment: Too Big To Fail, Ascent of Money, When Genius Failed, etc. Books on applied psychology (Influence, Predictably Irrational, etc) are another way to round out primarily technological education :)
Tigran Hakobyan
Tigran Hakobyan@tigranhakobian · Entrepreneur, Co-founder/CMO @ inapptics
@mlevchin Thanks Max! By the way, was reading Zero to One today. I like it, just few chapters left to finish it.
Klajdi Turlla
Klajdi Turlla@klajdi_kl · Product Manager, MPAY Albania
@mlevchin what do you think it's the best approach to increase electronic payments in cash based society with normal presence of the bank (i.e 50% banked population, people take the salary in the bank, high penetration of debit cards but low usage)?
Max Levchin
Max Levchin@mlevchin
@klajdi_kl ha, that is a roughly a trillion-dollar question :) Reducing interchange is a big step -- making card transactions cost same as cash.
Klajdi Turlla
Klajdi Turlla@klajdi_kl · Product Manager, MPAY Albania
@mlevchin :-) yeah right. In my country there is also a lack of interoperability. Merchants usually have 4 or more POSes from different banks making the product inneficient for the banks and very expensive.
Filipe Monteiro
Filipe Monteiro@ftuuky · Co-founder @Osteomics
Do you really only have one kidney?
Max Levchin
Max Levchin@mlevchin
@ftuuky not true! BUT, I was born with a doubled kidney on the right, so technically I have three! The pair on the right side is kinda fused together now.
Sebastian Gonzalez
Sebastian Gonzalez@sebagon · Entrepreneur, VP Sales at WyeWorks
@mlevchin @ftuuky I can't believe I found another person with the same issue! Do you have any information, doctors or anything to share with me about that?
Dim25
Dim25@dim25 · Founder
@mlevchin Do you visit Ukraine often? Any thoughts on startup scene and IT in UA?
Max Levchin
Max Levchin@mlevchin
@dim25 no; I've been back exactly once in almost 25 years since I left. barely know the local startup scene.
Ravi Vadrevu
Ravi Vadrevu@raviformative · Autonomous Hiring Intelligence
Hello @mlevchin - What do you see in startups before investing? If you have to prioritize based on the following 1. The originality of the idea 2. Exit potential 3. Market patterns 4. Growth 5. Team
Max Levchin
Max Levchin@mlevchin
@raviformative Team, Team, Team, Market Patterns. Nothing else matters :)
Lukas Fittl
Lukas Fittl@lukasfittl · Product Hunt
@mlevchin Thanks for taking the time to chat! With Affirm, how are you approaching the European market? Is it at all on the horizon for you, or is the focus solely on US consumers and merchants?
Max Levchin
Max Levchin@mlevchin
@lukasfittl I try not pre-announce things too much, but yes, I am a firm believer in the theory that people also exist outside of the borders of the United States :)
Anup Gosavi
Anup Gosavi@_anupg · Building Spext.co
Hi Max! Any tips on you truly focus on things at hand and manage distractions?
Max Levchin
Max Levchin@mlevchin
@_anupg noise-cancelling earphones + earplugs worn together.
Jourdan Bul-lalayao
Jourdan Bul-lalayao@jourdanb21 · Co-Founder & CTO, Jobox
Hey Max!! Thanks for chatting with us here on Product Hunt! My question is intentionally vague as I'd love for you to answer it based on your interpretation of the question :)! If you had only one tip to share with entrepreneurs on how to build a successful start-up, what is your absolute #1 tip?
Max Levchin
Max Levchin@mlevchin
@jourdanb21 find a co-founder that you really want to impress that is also obviously trying to impress you.
Yoshi
Yoshi@dnxx28 · Freerance Engineer
Hi @mievchin !! I'm Japanese engineer. I think Affirm and open data is able to fuse by using GPS in sharing economy. So if you'd like , why don't you teach me how to use Affirm API effectively?
Max Levchin
Max Levchin@mlevchin
@dnxx28 probably a suboptimal use of this AMA, but feel free to email our contact email at Affirm to learn how to use our APIs.
Apoorv
Apoorv@apoo_rv
Hi @mlevchin , thank you for doing this am excited about the mission of HVF and your interest in wireless sensors. You mentioned the value of wireless sensors and data streams during your session at DLD (2014). Moving People/Vehicles/Logistics primarily determine the volatility of the physical world and moving Money/Identity determines the volatility of the virtual world. Do you think in future wireless sensors networks can be used to build a new infrastructure to deconstruct the macro complexity ? I am researching about technologies for few years on issues of urban planning and public logistics with these technologies with integrated feedback loops and enhanced decision making. I would love to know your thoughts.
Max Levchin
Max Levchin@mlevchin
@apoo_rv yes, sensors should serve to fundamentally reduce complexity at the edges of the network by moving the knowledge and computational problem solving (eg scheduling) to the center.
daniellevine
daniellevine@daniellevine · Fireside
@mlevchin hey max! Thank's for doing this AMA. I'm wondering, what's the best thing you've come across in the last 30 days and why? Could be anything, a product, an article, a tea, a quote. Anything! Thanks for answering.
Max Levchin
Max Levchin@mlevchin
@daniellevine There something truly amazing I find pretty much daily! Yesterday, I heard a song (I collect productivity-enhancing songs) by a band I've never heard of -- Acid Horse, which was awesome. Then, found out that it was literally a single-song side project by Ministry years ago :-)
Matija Abicic
Matija Abicic@matijaabicic · Product Manager @getgenea
Hello @mlevchin, thanks for doing the AMA. Can you give us an example of a disagreement (or two:) you've had with @elonmusk and how you two have resolved it.
Max Levchin
Max Levchin@mlevchin
@matijaabicic ha! we fought like crazy over Windows NT (Elon) vs Linux (me) during PayPal. We never quite resolved our disagreement, but he once challenged me to an arm-wrestling match to resolve it. I lost that, but PayPal stayed Unix anyway :)
Alexander Fung
Alexander Fung@alexfungguy · Software Engineer
Hi @mlevchin, how do you envision Affirm to affect the world within the next 5 years? Do you think that you'll be moving beyond consumer credit, or is that the end goal?
Max Levchin
Max Levchin@mlevchin
@alexfungguy we are certainly going broader than consumer credit, but there is so much to fix there, we will still be working on it 5y from now for sure.
Kate
Kate@katesegrin · Head of Social @ GitHub
What first got you hooked on coding?
Max Levchin
Max Levchin@mlevchin
@katesegrin the sense of "I can tell this amazing machine that shows pictures, makes sounds, and solves problems exactly what to do, and it does it!" was, and still is, pure magic.
Michael Hwan
Michael Hwan@michaelhwan
@mlevchin Affirm is marketed as an alternative to credit cards so what does your new company's data indicate how Millennials use Affirm? Are they adopting it more than credit cards?
Max Levchin
Max Levchin@mlevchin
@michaelhwan they seem to love it! 40% of our users are Millennials, and another 30% are genX/Y.
JJ
JJ@outdreamer · Web Developer/Writer/Idea-generator
@mlevchin What do you think is missing if anything from the system of content distribution that we know as the following typical combination of services: - gauging & predicting user preferences, - voting - financial transactions - targeted ads - informative & topical content - customized & intuitive organization of data - identity & security services - integrated social media An example of what I think we could introduce is: - financial transactions integrated with voting/preference systems, so that when you like someones post on Facebook or Twitter, it automatically transfers $0.05 to a paypal account affiliated with a developing community, assuming the user liking the post opts-in to the service. So people in developing areas can create content like tweets or FB posts, make it public, and people who sign up can interact with that content in a way that allows them to express their preferences, in a way that also helps the people in developing areas. Or privileged users can create content & pass on the earnings to a community or user of their choosing. I think this will eliminate some unjust economic asymmetries & some third parties who have incentives to interfere with the system, like corrupt governments. I could also envision this being integrated into popular games on social media like Farmville. Do you see this as a potential step for products like Paypal & social media giants?
JJ
JJ@outdreamer · Web Developer/Writer/Idea-generator
What innovations do you expect to see in the next few years within the fin tech industry? Are you concerned by an imbalance between tech legislation & tech innovations, or the concept of online identity & security?
Max Levchin
Max Levchin@mlevchin
@outdreamer I think the opportunities are staggering, so I am very bullish. Not too concerned, as the regulators seem to be a LOT smarter and savvier than even a decade ago.
neeharika sinha
neeharika sinha@neeeharika · Google, Threadchannel
Hello @mlevchin great meeting you here. 1) I was wondering you have worked in companies belonging to diverse verticals. Is there any one vertical you would like to work in (for eg. auto or foodtech) ? 2) Favorite Coffe Shop in San Francisco?
Max Levchin
Max Levchin@mlevchin
@neeeharika 1) I'd love to eventually get involved in food! 2) Reveille Truck and Reveille b&m shops.
Michael Smith
Michael Smith@michaelmsmith6
hi Max, thanks for the live ama, you guys started paypal with the intent of creating a virtual global currency, given that bitcoin is successful so far, what hurdles did you guys face at paypal with the virtual global currency when starting out apart from the possible lack of adoption at the time? and what were you scared of at the time of launch? and have you come up with something audacious which we might hear soon? Thanks for your time. :)
Max Levchin
Max Levchin@mlevchin
@michaelmsmith6 last mile -- it's great to move money virtually phone to phone, but how do you spend it at your local market, today?
Andre Jacobovitz
Andre Jacobovitz@jacobovitza · Product Manager at Amazon
Hi @mlevchin - what are the advantages (and disadvantages) of launching a FinTech startup in Silicon Valley vs. NYC?
Max Levchin
Max Levchin@mlevchin
@jacobovitza your network/ability to recruit a great team is all that matters.
Shuai Payne
Shuai Payne@shuaipayne · co-founder @mogee
Hey @mlevchin! What's something you've learned from a very successful startup that you DIDN'T invest in that has impacted how you evaluate startup pitches?
@mlevchin, what kind of socks do you wear and are they comfortable?
Max Levchin
Max Levchin@mlevchin
@mkrk SwiftWick -- great for riding, great for every day. Love them.
Artem Gladkikh
Artem Gladkikh@g___a · Co-Founder & CEO at Test4startup
Hello @mlevchin . My name is Artem and with the team we develop our project talentboard.me being in Russia. Should we move to the United States in San Francisco?) Thank you.
JJ
JJ@outdreamer · Web Developer/Writer/Idea-generator
Is Elon Musk going to let you in his fleet of escape craft when he ditches this planet, & if so can I have a spot in one of them, bc I'm not super attached to this planet but I don't want to give up on an extra season of Firefly. How do you avoid building solutions to informational asymmetries that end up creating disincentives to do business in that industry? If anonymous users have a way to review a business, they have an automatic empowered impact on that business & therefore an incentive to abuse that power is created, even though the reviewing platform decreases the information asymmetry between customers & business owners. Do you think reduced anonymity online would help solve the problem of abusing opinion platforms?
Meher Somrani
Meher Somrani@mehersom
Hi @mlevchin, any recommendation for a book that may have changed/helped you at some point in your life ? Also, what motivates you in life/work ?
Spencer Lanoue
Spencer Lanoue@slanoue · Product Marketer @ Buffer
Hey @mlevchin, thanks for getting on here to do this AMA. I'm curious about the beginnings of PayPal. What was the process like starting from nothing and getting to product-market fit? More specifically... How did you guys first come up with the idea and validate market need? What were some of the biggest challenges you ran into along the way and how did you approach them?
Sheeza Shah
Sheeza Shah@sheezaahmad · Founder & CEO, UpEffect
Hey @mlevchin. What are your thoughts on social entrepreneurship VS conventional entrepreneurship?