So the company's core expertise, by definition, has to be in this ability to judge risk—to be able to say, "Is this the kind of transaction I really want to take on or is this something I should steer away from because you people look like thieves?" I think that's the security part. I mean, security not in any sort of a sense of anti-hacking defensive, but just security in a broader sense: risk assessment, figuring out what's the sane thing to do, what's unsafe, what's safe. Everything else that PayPal has built is sort of a commodity. The reason we had so many competitors in 2000 was because it looks really simple on the outside: you sign up, give us some credit card numbers, let's trade some money, done.

Levchin: I think the hallmark of a really good entrepreneur is that you're not really going to build one specific company. The goal—at least the way I think about entrepreneurship—is you realize one day that you can't really work for anyone else. You have to start your own thing. It almost doesn't matter what that thing is. We had six different business plan changes, and then the last one was PayPal.

Livingston: What can big companies do to preserve a startup culture? Levchin: My theory is that you sort of subdivide, and you make sinaller units and you give them a lot of power and responsibility. You let them make it or break it. But I have no practical knowledge as to whether this works or not.

Livingston: What advice would you give to a young programmer who's thinking of starting a startup? Levchin: Try to have a good cofounder. I think it's all about people, and, if you are doing it completely alone, it's really hard. It's not impossible, in particular if you are a loner and introverted type, but it's still really hard. But, you only can count on energy sources and support sources from yourself. There's really no one else who you can go to and say, "Hey, this thing is going to fall apart any minute now. What the hell are we going to do?” If you have a good team, vou are halfway there. Even more importantly, perhaps, you have to have a really strong cofounder. Someone vou can rel on in a very fundamental way.

Levchin: Peter and I like to reflect on the fact that we got lucky so many times. Pick any one episode in the company history, and we got lucky and lucky and lucky again. I think it's luck in the sense that we could have collapsed under this particular one, and we didn't. Mostly we didn't because we did something about it, and we corrected the problem or caught onto it early enough. But I think the fact that we caught the signs early enough in part is a luck thing because we could have just missed it, or we could have been too tired or too bored.

Livingston: Was the growth viral? Levchin: We built the system to be viral from day one. The idea was: I can send you the money, even if you aren't a member. If I send you $10, you get an email saying, "You have $10 waiting for you. Sign up, and you can take it." That's the most powerful viral driver there is. Free money available to you.