PayPal Mafia Member Jack Selby on Venture Investing, Luck and Being ‘SECOND BANANA’

This is adapted from Tatler Asia

The long-time managing director of billionaire entrepreneur Peter Thiel’s family office, Thiel Capital, is also behind Arizona’s largest venture fund, AZ-VC

About seven years ago, the identity of a mysterious diner who made news for leaving generous tips between $1,000 to $5,000 at restaurants was finally revealed. His name was Jack Selby, and he started his anonymous surprises in 2013—four years before he got found out.

If Selby’s name sounds familiar for other reasons, it’s because he is a member of the famous “PayPal mafia”, a group of former founders and early employees of the fintech company who have gone on to start their own successful businesses. Said people include Tesla’s Elon Musk, LinkedIn’s Reid Hoffman, YouTube’s Steve Chen, and billionaire entrepreneur Peter Thiel, with whom Selby continues working closely today.

Continue reading this article on Tatler Asia.

Here're some excerpts:

During a private event at the Singapore office of Vertex Ventures Southeast Asia and India, Selby shared pearls of wisdom on his investment journey, approach and perception of the future. Here are some of the key takeaways.

On how people’s career aspirations have changed

“When I graduated from college in 1996, all my friends wanted to work at Goldman Sachs, be a derivatives trader and [the like]. Today, years after the financial crisis, everybody wants to be an entrepreneur. And I think the societal value of everyone wanting [this] is great because it creates jobs and products.”

But the glamour of entrepreneurship is overblown

“It’s almost become like a game show. It’s like when I get on the escalator, I get off at the top and the confetti and balloons will drop, and I’m going to become a billionaire. I won the game. But that’s not how it works. Being an entrepreneur is not [like being on] an escalator. Some people don’t have the temperament to deal with near-death experiences.”

Although, if you’re in it, you might as well go big

“One of my favourite phrases, which I borrow from a buddy who’s a partner at Greylock [Partners], is you have to have equal parts grit and grandiosity. Grit is obvious. Grandiosity is that if you’re going to go through this crazy amount of work, working 24/7 for multiple years, you might as well be rewarded for it.”

On when the next PayPal will emerge

“It’s at the bottom of the cycle, when the cycle starts to turn. But it’s also really hard, so people just need to be eyes wide open about the reality.”

BEING AN ENTREPRENEUR IS NOT [LIKE BEING ON] AN ESCALATOR. SOME PEOPLE DON’T HAVE THE TEMPERAMENT TO DEAL WITH NEAR-DEATH EXPERIENCES

- Jack Selby - (Watch the podcast recording of the event here if you haven't!

A big part of business success is luck

“In March 2000, PayPal closed its Series C, which was a $100 million round, right before the [dot-com] crash. We closed on Friday and the market crashed the following Monday. So we got very lucky. For so many things in life, it’s about timing and your fortune.”

On his relationship with Peter Thiel

“I met Peter when I was 24 and we both have a background in the currency business. I joked to my friends that when I met Peter, I met a really, really smart person and I vowed to hold on for dear life. Fast forward 25 years later, I’m still holding on with all my strength.”

On solving actual needs

“Payments are really hard. If we hadn’t stumbled upon this unique marketplace like eBay, where both buyers and sellers equally want a payment solution, PayPal would probably not have come into existence.”

The jockey, not the horse

“For me as an investor, it’s all about the entrepreneur. When you invest in a company, the business might change seven, eight times. But if you invest in a bad person, however you define that, you have no chance. Focusing on the entrepreneur, making sure that person has the integrity, character, intelligence and the ability to think laterally is exceptionally important.”

The difference between investing and film

“Tech and finance, when you do it for a while, it can become routine. Whereas with film, you’re truly making art and it’s very difficult. If you’re fortunate enough to make a film that you throw up in the zeitgeist, the zeitgeist will either embrace it or say, ‘No thank you’. As an example, I don’t think The New York Times has ever written a positive review of any of the films we’ve made. But we’re still trying.”

If he wrote a book

“I would name the book, The dumbest guy in the room. And the subtitle will be, The trick is getting in the room. If you can put your ego aside and bump into really smart people, there’s nothing wrong with being second banana.”

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