The 12-Year Glitch: What Happens When a Company Forgets How to Fight?
PayPal - Strategy Breakdown or Breakdown of Strategy
The 12-Year Glitch: What Happens When a Company Forgets How to Fight?
I’ll be honest: I can barely get my pants on in the morning without a minor tactical error. I am never going to be the CEO of a global organization. I don’t sit in these types of boardrooms, I don’t understand “transactional economics,” and I’m pretty sure I’m just a fart in the wind in the grand scheme of the global economy. If even that.
But I just read a Twitter (X) thread by David Marcus, the former President of PayPal, that felt like a glitch in the Matrix. Thanks for the point to this Joe.
For the uninitiated, C-suite executives usually disappear into a cloud of NDAs and “professional courtesy” when they leave a job. They stay quiet. They play golf. They definitely don’t spend a Tuesday morning dismantling their former employer’s entire strategy in public.
Marcus broke a 12-year silence to perform an autopsy on PayPal. And even as a self-proclaimed novice, I found it fascinating. Here is what I learned from the “Insider View” while standing firmly on the outside.
The “Safety” Trap
As a novice, I always assumed that “big companies” have a master plan. Marcus suggests the opposite. He paints a picture of a PayPal that became obsessed with short-term predictability. They wanted the stock price to be steady, so they stopped taking risks.
They focused on “financial optimization”which is a fancy way of saying they moved numbers around to make the bank account look good today, while the roof was quietly rotting for tomorrow.
When you stop taking risks, you are always a laggard or an early adopter. You always piggy back on the shoulders of others - note their LLM play. Same. Alex Chriss seemed happy with a plan to increase distribution through increased partnership, Increased territories etc. It worked until it didn’t rather abruptly.
Alkran: The Klarna Conundrum
This poses many questions, most will remain unanswered but in there was reason to doubt, Isn’t that, what we the jury are asked to look for, reasonable doubt? This was my biggest “Aha!” moment. PayPal owned the checkout button. They had the lead. They had the users.
But because they were playing it safe, they allowed companies like Klarna to exist. If PayPal had been aggressive, if they had invested in their own long-term future instead of just protecting their current margins, they would have built “Buy Now, Pay Later” years ago. Instead, they stood by and watched a newcomer eat their lunch.
It’s like owning the only road in town and being so afraid of potholes that you let someone else build a highway right next to you. They quietly decided I can’t when faced with Icahn.
The eBay “Ghost”
It also makes me think about the eBay divorce. For years, they were joined at the hip. But looking back, who was eBay serving? And to what end?
Under John Donahoe (who ran eBay and then became a massive influence on PayPal’s trajectory), it felt like the brand became a pawn for short-term market value. The “mojo” was traded for a spreadsheet. They prioritized the shareholders of the moment and, in the process, lost the customers of the future. A turnaround master skilled in the habitual, the banal, catching headlines but leaving so much on the table. He is not always Mr Right, usually he boils down to Mr Right Now.
Where is eBay going. Should StockX exist? Vinted are actively eating the lunch of eBay. How and Why? Platforms like Meta and Amazon show how they used scale to build moats. Maybe eBay has too many “nice” people doing nice jobs and are fundamentally constrained by this inner value - maybe they are right.
I’m on a learning path, so maybe I’m being naive. But Marcus’s critique makes it clear: when a tech company starts acting like a legacy bank, it’s already dead, it just hasn’t stopped moving yet.
The PayPal brand feels stuck. It lacks ambition. It’s a giant that decided it was easier to nap than to run.
I might not be able to run a multi-billion dollar company, but I know a “must-read” when I see one. Marcus didn’t just write a thread; he gave us a rare look at what happens when a company loses its soul to satisfy a quarterly earnings call.
If you use PayPal (or used to), you should read it. It explains why your “checkout” experience feels like 2012, while the rest of the world moved on to 2026.
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