Hoffman: PayPal almost went bankrupt from exponential free volume costs
Reid Hoffman · Reid Hoffman on AI, Consciousness, and the Future of Labor · Oct 20, 2025 · at 44:04
Reid Hoffman, co-founder of LinkedIn and former PayPal executive, discusses why PayPal was forced to pivot from free user acquisition to charging fees.
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“At PayPal we had to change to, like, we, as you know, because you were close to us there, like, we had to change to a paid model because we're like, oh, look, we have exponentiating volume, which means exponentiating cost curve, which means despite having raised hundreds of millions of dollars, we could literally count the, we could point to the hour that we'd go out of business.”
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