13. The Coup

In Sep­tem­ber 2000, sig­nif­i­cant ten­sions emerged at Pay­Pal, stem­ming from the founders’ grow­ing dis­sat­is­fac­tion with Elon Musk, the then CEO. Max Levchin, frus­trat­ed by Musk’s dis­mis­sive respons­es to his con­cerns about fraud, con­tem­plat­ed leav­ing the com­pa­ny. This sen­ti­ment was shared by Peter Thiel, Luke Nosek, David Sacks, Reid Hoff­man, and oth­ers who were dis­il­lu­sioned with Musk’s lead­er­ship style and deci­sions, notably his lack of inter­est in com­bat­ting fraud and his insis­tence on dimin­ish­ing the Pay­Pal brand in favor of X.com.

The group decid­ed to act when Musk, unaware of the brew­ing dis­con­tent, left for his delayed hon­ey­moon and a trip to the Olympics. They ral­lied sup­port from key stake­hold­ers with­in and out­side the com­pa­ny, secur­ing a tem­po­rary CEO agree­ment from Thiel and enlist­ing the board’s sup­port for their coup. The move was par­tic­u­lar­ly bold giv­en Musk’s deep per­son­al and finan­cial invest­ment in the com­pa­ny, which he had pri­or­i­tized at sig­nif­i­cant per­son­al cost.

Upon learn­ing of the coup, Musk unsuc­cess­ful­ly attempt­ed to regain con­trol, appeal­ing to the board and indi­vid­ual employ­ees. Despite his efforts, includ­ing an emo­tion­al lunch with Hoff­man to sway opin­ion, the board vot­ed him out. Musk’s response was notably gra­cious, indi­cat­ing a will­ing­ness to step down for the com­pa­ny’s bet­ter­ment, though he har­bored dreams of a more expan­sive future for Pay­Pal beyond its cur­rent scope.

Musk’s reac­tion high­light­ed a fun­da­men­tal dif­fer­ence in risk tol­er­ance and vision between him and his Pay­Pal col­leagues. His sub­se­quent ven­tures, SpaceX and Tes­la, exem­pli­fied his unortho­dox approach to risk and inno­va­tion, chal­leng­ing con­ven­tion­al wis­dom and achiev­ing sig­nif­i­cant suc­cess­es that many had deemed impos­si­ble.

Post-Pay­Pal, Musk sought rec­on­cil­i­a­tion with his for­mer col­leagues, reflect­ing on the ouster as a piv­otal moment that freed him to pur­sue even more ambi­tious projects. His endur­ing inter­est in inte­grat­ing pay­ments with broad­er dig­i­tal plat­forms per­sist­ed, as evi­denced by his mus­ings on what X.com could have become and his plans for Twit­ter, sug­gest­ing a per­sis­tent vision that spans beyond the imme­di­ate con­tro­ver­sies and set­backs he faced.