Pando

Max Levchin has become an empathetic bright spot among tech’s super rich (Thank God someone has)

By Sarah Lacy , written on January 27, 2017

From The Disruption Desk

The first time I ever wrote something about Max Levchin, it was in BusinessWeek, and I cited as evidence of his calculating data obsession that he once graphed his girl friends’ bra sizes over time to see how his taste in women was changing.

His PayPal mafia friends thought it was a little unfair. Said (Pando investor) Peter Thiel at the time: “He just graphs everything!”

But to me, it was pure Levchin: A man obsessed with learning and data and calculation, who turned to spreadsheets to understand “how you humans operate.”

Levchin used to pride himself on not sleeping. He was an atheist, with libertarian leanings like a lot of the PayPal mafia. He proposed to his wife with a diamond that was 3.14 carats. He lived in a scientific, empirical, data rich world. Valleywag once ran a piece in its early days on whether Levchin was actually a Cyborg.

It wasn’t obvious back then that Levchin would become the member of the PayPal mafia who (cue Wizard of Oz music) would grow the biggest heart. Who would develop deep empathy for others. Who would make financial and investing decisions based on that, let alone political decisions. Who would even speak out against those close to him who haven’t gone in that direction.

And yet, that’s exactly what has happened. Levchin may not have become the richest member of the PayPal mafia, and he certainly hasn’t amassed the most political power. But he has arguably become the most human. And I’d also argue that’s a rarer commodity in Silicon Valley right now.

The evolution of Max Levchin provides an interesting counter-narrative to those who dismiss all “billionaires” and super rich of Silicon Valley as sociopathic assholes who move in lockstep. The people who believe that, somehow, adding a certain number of zeros to your networth automatically changes your worldview for the worse. Those who believe billionaires get together in some underground lair and agree that this week, they’ll hate immigrants, or, this week, they’ll go after the first amendment. That kind of thinking isn’t just silly, it lets the true sociopaths and assholes off the hook by suggesting that their behavior is somehow an inevitable consequence of making money.

It also doesn’t give credit to people like Levchin.

This struck me this week when I was listening to an NPR interview with The New Yorker’s Evan Osnos about his piece on mega-rich survivalists. Terry Gross asked incredulously why the super rich don’t give money to bolster societal institutions they fear will crumble instead of building elaborate escape hatches to survive the end of the world. To my surprise, Osnos quoted Max Levchin arguing much saying the same thing.

From the piece:

Max Levchin, a founder of PayPal and of Affirm, a lending startup, told me, “It’s one of the few things about Silicon Valley that I actively dislike—the sense that we are superior giants who move the needle and, even if it’s our own failure, must be spared.”

To Levchin, prepping for survival is a moral miscalculation; he prefers to “shut down party conversations” on the topic. “I typically ask people, ‘So you’re worried about the pitchforks. How much money have you donated to your local homeless shelter?’ This connects the most, in my mind, to the realities of the income gap. All the other forms of fear that people bring up are artificial.” In his view, this is the time to invest in solutions, not escape. “At the moment, we’re actually at a relatively benign point of the economy. When the economy heads south, you will have a bunch of people that are in really bad shape. What do we expect then?” 

That’s not the first time Levchin has been a rare voice of empathy in the Valley’s current landscape. At PandoLand last year, when we asked him about his good friend Thiel’s endorsement of Trump, he said he had to check the calendar to make sure it wasn’t April 1.

He also described how his views had changed, how he had developed a greater sense of responsibility for his impact in the world as he gained more power and wealth:

Peter delights in being contrarian it wouldn’t surprise me if the sheer delight in his choice is the sheer contrarian-ness of what he's doing. He and I don't always share politics though. As you get older and you have kids, you see the world through a lens of ‘What are you leaving behind?’. . .When I was young and angry I very much subscribed to the notion of objectivism and libertarianism ... and I thought it was very black and white, and my views have changed. Not a ton. I'm definitely not an objectivist by any stretch of the imagination, and I still believe the government should stay out of my finances and take the absolute minimum. But I very much want my gay friends to get married and I want my women friends to have the right to do whatever they want to do with their bodies and within that context you look around one or two generations back and everyone is an immigrant here ...with the notable exception of american indians.

In the same interview he had this to say about why he agreed to the thankless task of joining Yahoo’s board when Marissa Mayer became CEO.

“I respect who she is and how she is but also what she represents. She gave birth to twins and  then traded emails with me about a feature of a product she was launching in a week… and that’s not out of character.”

In fact, one of the companies Levchin is building now is Glow, an app that helps track women’s fertility. Levchin and his wife did not struggle getting pregnant, but many of his friends did. He told me at the time Glow launched, it was so hard for him, given how much he adored his children, to imagine any of his friends not being able to experience that. That was a major driver in his wanting to start the company.

The distinction between Thiel and Levchin over the decade I’ve known them is striking. Both are immigrants, and immigration reform is Levchin’s biggest personal cause. Meanwhile, Thiel supports Trump despite his anti-immigrant rhetoric. Thiel’s libertarian views seem to have become more extreme, while Levchin has grown out of his.

When I first got to know the PayPal Mafia, profiling both Thiel and Levchin for my 2008 book “Once You’re Lucky, Twice You’re Good,” the ultra-competitive Levchin and Thiel were in a race to see who could become a billionaire first. Thanks to Facebook, Thiel handily won that race. But since then, their goals have diverged remarkably.

Levchin has become much more vocal on his responsibility to give back to those who haven’t had his luck. Thiel meanwhile has a New Zealand escape plan in case the world he’s helping Trump create turns out to be an apocalypse.

Thiel’s focus on his own fate at the exclusion of others may be extreme, but he’s hardly alone. As I’ve written, this lack of empathy in tech is manifesting itself in a few ways right now:

An inability to care if it’s not your daughter (or you) being beaten by a tech bro. An inability to worry about, say, someone else getting raped or someone else's children being threatened, or an app being used for teen bullying, or someone else’s address being released by gamergaters. Or if the rules you benefitted from change, once you’ve already gotten yours.

The most extreme example of this may be (Pando investor) Peter Thiel-- an immigrant, who has also made his money by doing business with other immigrant founders-- supporting the presidency of a man who fanned some of the worst xenophobic and racist flames to get elected.

Tech leaders have made so much money, have so much power, and have become so insulated in the last few years now that a handful of companies are vying to be the first trillion dollar corporations and hundreds of companies are valued at north of $1 billion, that they’ve numbed their ability to think they could ever be a victim anymore. A true victim. Someone who can have everything ripped away from you in a moment of hate and violence. Not merely a rich dude who occasionally gets negative press.

It’s as if these great minds got stuck in time, in the early Internet era, where they were just making software that might only cancel your airline tickets if it glitched, not say, put you in physical danger or make a drone fall from the sky or influence the presidential election by spreading fake news stories and conspiracies. 

Levchin should get credit not just for showing empathy, but for actually speaking out about it. Several of his closest friends are the very folks he is criticizing in his comments at PandoLand and to the New Yorker. And he did it on the record. Far more common are comments like his followed by, “But I could never say that on the record, these are my friends (and/or) I have to do business with them.”

Just speaking up, just pointing out that the Valley elite would do well to think of those less fortunate, passes for extreme bravery now. And it’s what the tech rank and file who are increasingly becoming disillusioned with their leaders needs to hear from someone right now.

Consider the piece I wrote yesterday on Sheryl Sandberg’s deafening silence over the women’s march-- the biggest, public demonstration of feminism we’ve seen in our lifetimes. Several hours after my post, Sandberg finally posted her first pro-women’s rights, anti-Trump public comments.

And then there’s her boss Mark Zuckerberg who gave $100 million to establish immigration reform group Fwd.us. Fast-forward to a Trump world, and now Zuckerberg is dead silent on the cause of immigrants. Fiduciary duty.

Consider even Elon Musk: A man who publicly and loudly pulled out of Fwd.Us’s coalition once it tried to horse trade on the environment. Musk shocked me when he joined Trump’s economic advisory team, and this week when park rangers defied Trump and defended science on Twitter, Musk was busy Tweeting how great Trump’s proposed Secretary of State Rex Tillerson would be for America.

Elon Musk! The guy Iron Man was based on! A man so worried about climate change that he almost bankrupted himself building Tesla, SolarCity, and SpaceX (plan B in case we destroy the planet)-- won’t even speak out in defense of science right now?

It’s worth noting: These are the most successful tech leaders, the ones who likely have little to lose if they actually stood up to Trump. What does that say for everyone else? It’s astounding that some of the most powerful, richest men and women in the world are so terrified of an administration that even the Wall Street Journal called “amateur hour.”

Levchin isn’t totally alone in his concern and empathy. PayPal mafia member Reid Hoffman is also outspoken on a lot of these issues, and was loudly anti-Trump before the election. He expressed his frustration in getting other billionaires and Valley elites to speak out against Trump back then to the New York Times, saying:

“People are fearful that, especially in a circumstance where he might be in a position of extreme power as a potential presidential candidate, that that would be used in a retaliatory way, that would be used in vengeful way...Everyone gets worried about being attacked, and part of the logic and mechanics of bullies is that they cause people to be fearful that they’ll be singled out and attacked.”

“It’s the same thing like on school grounds, when people won’t go help the kid who is being bullied because they’re worried that the bully will focus on them.”

But Hoffman has always been out of step with the libertarians in the PayPal mafia, the warm and fuzzy member of the group. While students at Stanford, Hoffman would tell Thiel his world view was too extreme towards the right, and Thiel would tell Hoffman he was verging on communism, he wanted the government to do so much to help people.

There’s been on big life change between Thiel and Levchin during this time: The latter has become a father, and in that PandoLand interview, Levchin talked about how that changed his world view.

But it occurs to me, there’s another big life difference between Levchin and a lot of the PayPal mafia: Levchin was a rare one among them who actually fit the Valley cliche of coming from nothing. Thiel didn’t. Hoffman didn’t. David Sacks didn’t. Keith Rabois didn’t. Mark Zuckerberg, for that matter, didn’t either.

Levchin grew up in an authoritarian country, where people didn’t have freedoms we take for granted in America. He almost had his foot cut off as a young child, because a thorn contaminated from Chernobyl was lodged in the heel of his shoe, setting off a Geiger counter. His family risked a tremendous amount coming here and had mere dollars in their pockets when they did. Levchin first coded in notebooks, having to imagine if the programs would work. Levchin found his first electronics, scavenging through trash cans and fixing them, not strolling through BestBuy and making a wish list. Simply learning to speak the language without an accent was a Herculean struggle throughout his teens.

Perhaps Levchin’s story isn’t one of transformation. Perhaps he can’t turn his back on immigrants, the poor, on those without the option to buy an escape hatch in New Zealand now, because he never stopped being that guy.