4 Things We Learned from our Q&A with Fintech Pioneer Max Levchin

Max Levchin recently came to Sift Science to share stories about his personal and professional experiences – from his early days hauling his desktop computer around in his car as he drove from city to city to pitch investors, to his eventual success as the co-founder of PayPal. Max is now the CEO of digital lending startup Affirm. He was Sift Science’s first investor and led our seed round. Our CEO, Jason Tan, sat down with Max to ask a few questions about his adventures. Here’s what we learned.

1. Timing can be everything.

Jason Tan (JT): You’ve started a lot of companies. Did you start any companies before PayPal that may have succeeded in a different era?

Max Levchin (ML): In the ’90s, I created a company that mirrored newspaper classified ads online–basically an early version of a SaaS company. We sold our service to regional newspapers in Illinois, and it was a real challenge to convince these small local papers that they needed our service. So, that was before its time and didn’t do very well.

Around this same time, I was perpetually broke and pitching a lot of potential company ideas to investors. I once received a particularly colorful rejection: I heard about a guy with a lot of money and an appetite for risk, which sounded like a venture capitalist to me, so I drove out to meet him. He listened to my pitch for a service that tells you whether the name of your competitor has shown up in a banner ad. Remember, this was in the ’90s.

The guy rejected me outright, saying, “I’m not going to invest in this thing because I don’t understand what you’re doing, but I own several parking lots and I need a manager. Interested in that?” So, I packed up my desktop computer – I didn’t have a laptop back then, of course – and drove off. In the dramatized movie version of the incident, you would’ve heard sad music and seen me sobbing in the car.

2. It helps to have an incredible role model.

JT: Where did your grit and determination come from?

ML: I had an amazing, strong-willed grandmother. She was always an extraordinary presence in my life who would say things like “There’s no such thing as ‘I can’t.’ There are only different degrees of ‘I won’t.’” I grew up in Eastern Europe, where most families lived together, so for as long as I can remember, I’ve had this 5’2 woman (with two PhDs in astrophysics!) telling me I’m not trying enough.

When I was 20, I found out that she had been diagnosed with breast cancer back in Ukraine, the year I was born. She engineered our exit from the Soviet Union, she got two PhDs, she joined the Academy of Sciences…and yet she never complained. Even on her deathbed, she was pushing me not to drop out of college, and haranguing me for not aspiring to get a PhD.

3. Our humblest moments can be our most educational.

JT: What has been your most difficult professional lesson, a humble moment for you?

ML: In at least one of my startups, I had not paid a lot of attention to company culture upfront. When I saw that the company and business were really starting to take off, I also began to notice that office relationships were strained, and I didn’t like the rhetoric I heard in the hallways. But we were a 50+ person group by then, and there was nothing I could do to correct it. I spent years trying to change the company culture but never could. Companies with toxicity weaved into the atmosphere do not have longevity. They start spinning out their best people, and that’s unsustainable.

4. Max’s favorite coffee is…

JT: One thing people don’t know about you is that you’re obsessed with coffee. You taught me how to do a pour-over – which is something I don’t ever do, but I take great solace in the fact that I could do it if I needed to. What’s your favorite local coffee roaster?

ML: Four Barrel’s Friendo Blendo is the go-to espresso blend, but I am always trying new roasts from different roasters!