In a previous life, Elon Musk was one of the main creators of PayPal. He’s pretty open about how the initial idea didn’t actually catch on very well. When he was doing customer interviews, he’d get that glazed-over look. Yeah, that one.
At the time, the team was approaching consumers. They were saying they aimed to “replace the US dollar with a new internet currency”. Remember this was 1999, almost a decade before Bitcoin existed.
Their product allowed people to beam money from one PalmPilot to another via infrared. Journalists voted this as one of the worst business ideas of 1999.
If you’ve never heard of them, PalmPilots were like early smartphones. Except they weren’t phones.
But then the customer development led to an epiphany. Customers loved a small sub-feature the the team built just to get the PalmPilots to sync:
“Sending money to an email address!”
In 1999, “sending money to an email address” resonated with people. Not just with PalmPilot owners. At a deep level. Once the Paypal guys slapped on a viral engine of growth, that feature became what PayPal is known for.
All of this shows how critical it is to have the right value proposition, when first pitching a product. Regardless of whether you present your product in initial conversations with customers. Or on a landing page MVP.
[image cred: Rama & Musée Bolo]
[…] Peter Thiel”, he ran around doing customer development trying to convince people to beam money between PalmPilots. Over infrared. It was only when they realized that people really latched on to the idea that […]