Stripe just offered to buy PayPal for $53 billion.

@atlasberry008

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Why it worked

The video leverages a timely and dramatic business news event (Stripe's potential acquisition of PayPal) to hook viewers. It then provides a compelling narrative by contrasting the past and present of these companies, explaining complex business concepts like the 'innovator's dilemma' in an accessible way, and using relatable analogies (David vs. Goliath, staying hungry vs. falling asleep) to illustrate the points.

Summary

The video discusses how Stripe is reportedly looking to acquire PayPal for a fraction of its former value, highlighting PayPal's decline due to competition and internal stagnation. It contrasts Stripe's continuous innovation with PayPal's defensive strategy, illustrating the "innovator's dilemma" and emphasizing the importance of constant motion and innovation for business survival.

Structure

1Stripe's offer to buy PayPal at a significantly reduced price.
2PayPal's historical valuation and its subsequent decline due to competition.
3The founding of PayPal and the success of the 'PayPal Mafia'.
4PayPal's failure to adapt and innovate, leading to its current struggles.
5The 'innovator's dilemma' and why incumbents often fail.
6Stripe's success attributed to continuous innovation and 'staying hungry'.
7A call to action to join the 'Frontier' community.

Original caption

Stripe just offered $53B for PayPal — a company worth $360B in 2021. About 15 cents on the dollar. And Stripe, the upstart, is now valued at nearly 3x the giant it's buying. PayPal got picked apart from every side: Apple and Google Pay took the consumer, Stripe took the merchants, Klarna took BNPL. Venmo became a verb and never got monetized. The PayPal Mafia left and built Tesla, SpaceX, LinkedIn, Palantir. What they left behind got slow. Founders: this is your answer to "why can't the incumbent just do this?" If you like this kind of thing and want to stay close — join our community Frontier. Link in bio. stripe, paypal, fintech, paypal mafia, venmo, incumbents, startups, innovation, acquisition, founders #venturecapital #fintech #startup #founder #ai

More from @atlasberry008

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On-screen text

Stripe Just Offered to Buy PayPal for 15 Cents on the Dollar $53 BILLION stripe PayPal DAVID IS GOING TO BEAT GOLIATH SOUNDS LIKE A BIG DEAL UNTIL YOU REALIZE WAS WORTH $360 BILLION IN 2021 SO STRIPE IS BUYING LIKE THE KING FOR $0.15 ON THE DOLLAR AND NOW THE UPSTART THREE TIMES MORE THAN THE GIANT TO SWALLOW BECAUSE LET'S REWIND 15 YEARS STRIPE WAS JUST WRITING CODE AND PAYPAL WAS THE UNTOUCHABLE INCUMBENT THE PAYPAL STORY: ONLINE PAYMENT PIONEERS INVENTED PAYMENTS BACK THEN THAT STRIPE BUY PAYPAL GET LAUGHED SO WHAT HAPPENED HERE? GETTING PICKED APART FROM EVERY APPLE PAY AND GOOGLE PAY THE CONSUMER STRIPE MERCHANTS PAY LATER BY KLARNA AND AFFIRM AND EVEN VENMO WHICH PAYPAL OWNED GREW HUGE EVEN BECAME A VERB AND THEN IT JUST SAT THERE PAYPAL MAFIA PAYPAL WAS FOUNDED LEGENDARY TEAM IN HISTORY THE PAYPAL MAFIA MUSK HOFFMAN TEEL SACKS THEY LEFT AND BUILT TESLA SPACEX LINKEDIN YOUTUBE PALANTIR FIVE YEARS - driven by slowing growth, repeated execution failures, and competitive encroachment from Apple Pay, Google Pay, Klarna, and Stripe's own Braintree checkout product. AND THEN THE COMPANY KIND OF BECAME THE OPPOSITE SLOW UNABLE TO SHIP PRODUCT GENIUS DOESN'T PROTECT YOU CULTURE ISN'T INHERITED IT'S MAINTAINED When an incumbent stops innovating and starts protecting an older, established product, it triggers a classic business dilemma known as the innovator's dilemma. BECAUSE THE MOMENT A COMPANY STARTS ITS POSITION INSTEAD OF ATTACKING THE CLOCK STARTS LET'S FLIP IT AROUND A MORE OPTIMISTIC STORY EVERY FOUNDER THAT KILLER WHY CAN'T PAYPAL DO THAT OR WHY CAN'T GOOGLE OR MICROSOFT INCUMBENT END UP CRUSHING IT? THIS IS WHY GET COMFORTABLE PROTECTING THE OLD THING THE NEW ONE THEY ARE THEY HAVE TO DEFEND AND THEREFORE THEY MOVE AND THAT'S THE CRACK THAT EVERY FOUNDER STRIPE DIDN'T BEAT PAYPAL BY BEING BIGGER BY STAYING HUNGRY WHILE PAYPAL FELL ASLEEP THAT THE PAYPAL MAFIA BOUGHT BY TWO BROTHERS STOP SHIPPING INCUMBENCY IS NOT A MOAT MOTION IS VELOCITY YOU'RE BUILDING THAT'S YOUR EDGE GOT TO USE IT YOUR OWN WORST ENEMY THIS SORT OF THING JOIN OUR COMMUNITY F Frontier Signal from the edge. A private network for frontier builders and backers. LAT 40.7128 N LONG -74.0060 W

Transcript

Stripe just offered to buy PayPal for $53 billion. David is going to be paid. Sounds like a big deal until you realize that PayPal was worth $360 billion in 2021. So, stripe is buying like the king of payments for $15 on the dollar. And now the upstart is worth like three times more than the giant that it's about to swallow. Because let's rewind 15 years. Stripe was just two brothers writing code and PayPal was the untouchable incumbent. The company that invented online payments. Like if you said back then that stripe was going to then buy PayPal, you would get laughed out of the room. So what happened here? PayPal ended up getting picked apart from every direction. Apple Pay and Google Pay, they took the consumer, stripe it up taking the merchants. Buy now pay later got eaten up by Klarna and a firm and even Vembomo which PayPal owns. That thing grew huge, even became a verb and then it just sat there. But then you say PayPal was founded by the most legendary team in history. The PayPal Mafia, Musk, Teel, Hoffman, Saxman, Sax. They left and built Tesla, SpaceX, LinkedIn, YouTube, Paladin. And then the company they left behind kind of became the opposite of them. Slow, defensible, unable to ship product. And that's the warning. Genius at the founding doesn't protect you. Culture isn't inherited. It's maintained or it rots. Because the moment a company starts defending its position, instead of attacking the next one, the clock starts. But now let's flip it around. Cuz this is actually a more optimistic story in tech. Because every founder has heard that killer question. Why can't PayPal do that or why can't Google or Microsoft do that? Why won't the incumbent end up crushing you? This is why. Incumbents get comfortable. They start protecting the old thing instead of building the new one. The bigger they are, the more they have to defend. And therefore, there's slower they move. And that's the crack that every founder can drive through. Stripe didn't beat PayPal just by being bigger. It beat them by staying hungry while PayPal fell asleep. And now the house that the PayPal Mafia built is going to get bought by two brothers who just didn't stop shipping. Incumbency is not a mote. Motion is velocity. And if you're building right now, that's your edge. And you got to use it before you become your own worst enemy. And again, if you like this sort of thing, I want to stay close to join our community frontier. Link in bio.