Ahead of their time inventions haven’t always led to business success in IT however “early birds” have typically proven to see initial success; and those that can keep up with disruptive innovation longer term success. Here in the closing days of 2015 the IT industry remains in the midst of a migration toward the “3rd Platform” consisting of cloud, mobile, social and big data. With this IT leaders have to decide between two major paths as the road is starting to fork. Path 1 which includes adoption of 3rd platform will position IT as the center of business growth and the champion of the business setting both up for competitive advantage. Path 2 on the other hand, well we’ll leave it open to your individual interpretation on where that road goes but assuming no where good.

Feel free to post ideas in the comments section or tweet us at@netfastUSA using hashtag #path2disaster. Netfast will share the best(or is it the worst?) ideas on where road 2 dead ends via our LinkedInand Twitter feeds. 

Following our previous analysis of Cloud and Mobile today we move onto Social as the next subject of Netfast IT Business Review. But rather than talk about the history of social, we’re going to spend the next part of our article talking about PayPal for soon to be apparent reasons…


Well our first reason is the history of social was a major movie release and thus you’ve already seen that.  If you haven’t it was an ok movie, check it out on Netflix if you have time, no rush come back when you are done….

Ok, welcome back… 

Obviously PayPal is not the first app you think of when you hear the word social. Most think of Facebook, Twitter and of course the platform you are reading this on – LinkedIn. We are distributing this article right here on LinkedIn so obviously you are aware of it, but now let’s go into why PayPal relates to a discussion on social.

PayPal is relevant for two reasons

  • A successful “digital social marketing” campaign well before the existence of “digital social marketing”
  • Not surprisingly based on that but PayPal alumni have founded, invested in or advised almost every major and minor social network

A Pioneer to Viral Social Marketing – PayPal’s Growth Hack

PayPal as most startups went through a series of pivots, late nights, angry spouses and lots of coffee. However to keep our story going let’s ignore any struggles or angry family members the founders encountered and skip straight to the relevant part which is their success and growth.

PayPal grew out of the merger of two internet 1.0 startups the first is Confinity founded by Peter Thiel, Luke Nosek and Max Lechin, the other is X.com founded by Elon Musk. Once merged the combined companies focused in on what would become the success engine of their business and that of course is money transfers and payment processing. (Remember skipping their struggles i.e. Palm Pilot security)

PayPal is not particularly that “different” or innovative compared to other payment apps including eBay’s Billpoint. However what eventually led to their IPO and later purchase by eBay was the massive size of the user base. The marketing strategy that got them there was literally paying $10 every sign up and then every referred sign up from that initial user. This created a major customer acquisition channel which at it’s peak was growing by 10% EVERY SINGLE DAY. (apologies for shouting)

This strategy was an early implementation of  what we now know as social sharing and “I heard about this” that today’s digital marketing relies upon. Many applications today including major cloud applications use the framework PayPal set back in 2000 to perform their social marketing and differentiate themselves from the marketplace.

Of course we should disclaim that PayPal’s strong funding didn’t hurt either but there is where the major difference between 2000 and 2015 exists. Remember back in 2000 we mostly communicated digitally through email and IM; we did not scroll a free use Twitter feed, LinkedIn or Facebook to learn and obtain recommendations. Thus a “digital marketer” of the day had to obtain advantage by pumping significant cash investment into the viral referral hack, today the need to pump in cash is reduced as information is widely available through freely shared earned social media. Investment still increases the scale of that message however enterprise social and collaboration applications with IT alignment can help a smaller or mid-sized company get their message out with less cash investment. Simply put social tracking systems such as CRM and marketing automation tools with input and alignment from IT and marketing leaders create competitive advantages that weren’t possible 15, 10 or even 5 years ago.

Full adoption of the IDC 3rd platform has completely blurred lines between business and IT which should be an opportunity for all. For IT leaders as mentioned earlier it takes you to the desired path 1 instead of #path2disaster.

PayPal Diaspora (aka the PayPal Mafia)

Similar to GO Corporation in our previous article PayPal’s success and subsequent sale to eBay in 2002 have left the tech industry with an all-star team of alumni. However most relevant to our discussion PayPal’s alumni group has left the world with a who’s who of current social networking founders and executives

  • Peter Thiel – Founder and CEO

Later became the initial outside investor in Facebook and key board advisor

  • Max Levchin – Founder and CTO

Later became the founder of Slide, and an early advisor at Yelp and Evernote.

  • Elon Musk – Founder of Acquired X.com

Later became the founder of Tesla Motors and SpaceX. Tesla is “sort of” a social network if you think about it.

  • David Sacks – COO

Later became founder of Yammer

  •  Steve Chen – Engineer
  • Jawed Karim – Engineer
  • Chad Hurley – Web Designer

Co-Founders of YouTube

  • Reid Hoffman – EVP

Founder of this very platform LinkedIn

  • Jeremy Stoppelman – VP of Technology
  • Russel Simmons – Engineer

Founders of Yelp

  • Yishan Wong – Engineering Manager

CEO of Reddit

In the 15 years since the PayPal growth hack of 2000 a lot has changed. With about 20% of the entire world on Facebook and hundreds of millions using other services like LinkedIn and Twitter ignoring social is no longer an option. It’s now become standard for most business to have a presence on social….

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.…but to truly become a social company and to take advantage of the benefits IT must get out of the mindset of fighting daily fires and migrate over to a platform that allows them to align with the business and build the applications and analytics needed to create the next great growth hack.

We’ve been analyzing each pillar of the IDC 3rd platform in isolation (you don’t want to read it all at once) but nothing in business lives in isolation. The cloud enables greater scale, quicker and more flexible deployments of apps. Mobile allows us to connect from anywhere, anytime. Big data and social gives us treasure troves of data to pick through and push through applications hosted on the cloud and run through mobile platforms.  We wanted to leave you today with that message as the social graph ties your posts, status, and check ins together you daily business and tech activities must follow the same path to thrive.


Many of the PayPal founders and executives got rich and then got rich again by taking advantage of the latest trends in technology before they were trends. Path 1 for the Mafia led to fat wallets and may even get us all driving electric cars soon. Hopefully our continued analysis here at Netfast IT Business Review can help you fatten your wallet as well.

Starting with our next article we’re going to break from historic and current analysis of the IDC 3rd platform and take a look at the road ahead. Let’s jump into 2016 in 2015 with…

“Looking into the Crystal Ball | Our Predictions for 2016 IT Trends”

Spoiler Alert: the crystal ball seems to prefer path 1. But you are still welcome to pursue #path2disaster. Let us know how it goes by tweeting @NetfastUSA

About Author

Joe Asady is the founder and CEO of Netfast Technology Solutions (www.netfast.com). Netfast is a leading Cloud Managed Services provider for New York City area mid-market business enabling customers to accelerate Digital Business Transformation with managed cloud and mobile solutions.