the paypal mafia photo is the most reproduced image in tech. what gets skipped is that in 2000 the company in it was nearly dead.
fraud was costing them over $10m a month. russian rings running bots to farm signup bonuses, chargebacks stacking faster than revenue.
the fix became two things you still use. gausebeck and levchin built a test that made you type distorted characters before opening an account one of the first commercial captchas. then igor, a pattern-detection system named after a fraudster who'd taunted them.
losses fell to roughly 0.37% by the end of 2001, against an industry average near 1%. the thing that almost killed them turned into the moat.
that's what ebay bought for $1.5b in 2002. then everyone scattered.
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