PayPal incentivized users by giving away money for signing up friends, which contributed to its viral growth on the consumer side.

The evolution of PayPal involved multiple pivots, including a shift from hardware to software and the introduction of email payments, which were driven by customer needs and market dynamics.

The pivot to email payments was driven by the realization that eBay sellers were the primary users, leading to a focus on facilitating transactions for them.

After selling PayPal to eBay in October 2002, I recognized that the consumer internet was just beginning, contrary to the belief that it was over, and I decided to pursue the LinkedIn idea.

PayPal's final major pivot involved establishing a sustainable business model by introducing limits on free credit card transactions, which converted a significant portion of users to paid accounts.

Both PayPal and Hotmail achieved viral growth because of their high conversion rates, not necessarily high payloads or frequency.

The first major pivot for PayPal was transitioning from a focus on encryption technology for mobile to developing a cash payment system on mobile devices.

Marketplaces connect buyers and sellers, often referred to as two-sided marketplaces, and they can dominate their industries.

Payment networks function as marketplaces, and while they are challenging to establish due to the chicken-and-egg problem, once solved, they can create very sticky businesses, as seen with successful companies like Airbnb and DoorDash.