Remarks for Virtual KTH Event on Entrepreneurship

Hello and thank you, Clara, for welcoming me today to speak to you all!  It is truly an honor as the U.S. Ambassador to Sweden to be speaking to students at the Royal Institute of Technology, one of Sweden’s most prestigious universities.  In fact, as far as I am aware, KTH is the only university in Sweden that a sitting U.S. president has visited to see the amazing technology that it creates.

Technology, as you know, is the product of the mixing of ideas about how we can do something better, the application of proven techniques in new ways, and a lot of hard work.  It is an exciting creative process grounded in science and engineering — a process many of you listening in today know a great deal of about.  I consider myself something of a technologist, but what I have particularly enjoyed in my pre-diplomatic career has been combining technology and business as an entrepreneur.  Clara, that is a major reason why I am so pleased to be joining you and your KTH colleagues from iStart as well as similar student organizations focusing on entrepreneurship at the Stockholm School of Economics and Lund University’s Faculty of Technology.  Thank you again for arranging this event and thank you to everyone for making the time to participate even as the holidays approach.

As many of you know, I started my career as an entrepreneur.  And, as some of you in this room may suspect, being an entrepreneur means pursing a non-linear career path.  After graduating from Stanford, I did not join a large, established firm, but instead I found my first job working for a start-up firm making capital investments with Peter Thiel.  Our office was in a former broom closet with no windows.  It was so small that every time Peter came or left, I had to scoot my chair as far in as I could so he could get out the door.  However, we wanted to be on Silicon Valley’s famous Sand Hill Road, and that was all we could afford.

Little did I know that this former broom closet would be the first step toward one of my proudest successes:  helping to found and build PayPal with Max Levchin, Peter Thiel, Elon Musk, Luke Nosek, Yu Pan, and Russel Simmons.  The process of building PayPal taught me two important things about success.  Namely that success requires:  1) seeing opportunity where others don’t and 2) madly embracing the unknown.

While working in our broom closet, our fund became the first investor in a small encryption company called Field Link.  Field Link was doing encryption for the most cutting-edge technology at the time:  the Palm Pilot.  None of you have probably heard of the Palm Pilot:  It was essentially a handheld device with an electronic calendar and contacts database with a stylus.  Well, intrigued by Field Link’s vision, but even more so by their excellent Chief Technology Officer, I decided to join their founding team and see where we could go with Palm Pilot encryption.

Not long after joining, a group of us from Field Link were at a local Chinese restaurant in Palo Alto for lunch.  Being recent graduates, our budgets were tight, so when the check came, complex discussions began about how we would split the bill.  In the middle of that conversation someone remarked, “wouldn’t it be nice if we could just use our Palm Pilots to ‘beam’ money to each other?”  Everyone stopped, thought, and the next thing I knew, we were changing our Palm Pilot encryption company into an ePayments company.

We founded PayPal in 1998, but it took us almost three years to become profitable.  During those years we tried five different business models, before we found one that worked.  In addition, our “brilliant idea” to beam money between Palm Pilots was called one of the ten worst ideas of the year by a local technology publication.  Not exactly a confidence booster.  It wasn’t until users started using PayPal to accept payments for eBay auctions that we really were able to find success.  Just after three years with the company, we were able to take PayPal public in 2002 and then sell the company to eBay for $1.5 billion that same year.

When I think back on that experience, I often wonder how we did it.  No one from the PayPal team had payment experience; most of us didn’t even have Internet experience.  It was a huge risk to invest all that money and time – years! – on something outside our expertise.  However, by seeing the opportunity where others didn’t and madly embracing the unknowns of where that opportunity would take us, we were ultimately able to find huge success.

Opportunities always exist, no matter how tough the prevailing conditions may be, but it does take a special mindset and determination to be able to see them and take advantage of them.  This is the case even now in the midst of a pandemic that is more powerful than anyone alive today has ever experienced.

This leads to my second key ingredient for success: embracing the unknown.  We don’t know what the permanent effects of the pandemic will be on our societies or on how we work.  Regardless of what those changes are, success will come to those who run toward, not away, from the post-Covid-19 environment.

While these disruptions have been challenging for us all, we have also seen opportunities for disruptive innovations – and Sweden and the United States are well positioned to lead in that regard.  Both countries remain at the top of the Global Innovation Index year after year and have a great number of tech start-ups that are nimble and quick to adapt.  We have seen our companies provide innovative approaches to tele-medicine, remote personal care, home delivery, teleworking, online education, and digital mental health, addressing many of the issues and demands of our ‘new normal.’  Although the start-up and scale-up ecosystems have been hit by the pandemic, there are great examples emerging of innovative companies adapting to promote resilience.

I’m thinking of security companies that, instead of traditional detection, offer their software and thermal cameras for body temperature checking.  Or a company making small booths for quiet work in open offices, now offering those same booths for virus testing at healthcare centers.  Or the group of Swedish IT entrepreneurs that created a non-profit organization to support healthcare staff with everything from food to transport to research.

Entrepreneurs in the United States and Sweden have been deeply involved, alongside scientists and researchers, in developing products and services to respond to existing and emerging needs, as a result of the pandemic.  Three of the leading COVID-19 vaccines, in fact, have ties to U.S. and/or Swedish companies (Pfizer, Moderna, AstraZeneca).  They are not running away from this mysterious new threat but running toward solutions.

It’s hard to predict where the next big startups will be.  Some of you on this call may already be kicking around ideas that will be the seed of the next PayPal or the next unique entrepreneurial idea that turns into the next unicorn.  As I said before, I would encourage you to look for opportunity where others don’t and to madly embrace the unknown.

And I would add, in closing, three other bits of advice:  find a great team, fail fast, and don’t be greedy.  Who knows? Maybe the next time we meet, it will be you giving the lecture on entrepreneurship.

Thank you again for this opportunity to talk to you all, and I welcome your questions.