First investor of PayPal shares his journey and advice
Peter Davison was the first person to invest in the company that is now PayPal. In the first of our Founder Chat series, he shared the unique knowledge and insights he's gained on his journey with the next generation of entrepreneurs.
It was the startup that took the world of transacting to a whole new level, revolutionising the way everyday people make online payments. Now, most of us carry the app in our back pockets.
During the inaugural Founder Chat, aspiring student entrepreneurs had the opportunity to gain unique insight into the stories and perspectives of Peter Davison – the first investor of PayPal and founder of Fishburners, Australia’s largest startup community.
Davison is currently mentoring members of the UTS Startup community, and kicked off the series with a down to earth and entertaining discussion about the journey of success.
From his student days in Brisbane studying mathematics, Davison saw himself as an outsider.
“I always felt different,” he said.
“I wanted to contribute and I wanted to do something bigger than what my degree was about.”
Pursuing the path of an entrepreneur followed soon after graduating when he decided to fly to Silicon Valley and pitch himself as a venture capitalist.
Less than a decade later, Davison would become the first person to invest in the company that would exit for $USD1.5 billion – PayPal.
Find out who your audience is
As one of the most successful startup investors in Australia, the audience of budding entrepreneurs gathered at UTS Startups were keen to know where and how to start.
Davison’s advice was clear and simple: know your audience.
“The best chance you have is to know a market of people really well,” he said.
The next step is to identify the issue you want to attack and understand how to market it successfully.
“Forget ideas. Just ask yourself ‘who do I know really well’?”
Timing and execution is key
As Davison took the audience on his whirlwind journey from average university graduate to multi-millionaire investor, it was almost hard to believe it was true.
But Davison said it’s not all about having good ideas and working hard.
“Ideas are nothing, all they do is tell me a little bit about how you think,” he said.
“Don’t ask me whether you have a good idea because I’ll probably say yes, but a good idea is just one part of it,” he said.
For him, timing and being in the right place at the right time is a key factor in entrepreneurial success.
“If I had the idea for PayPal in Brisbane, it never would have worked.”
Davison encouraged young entrepreneurs to be flexible and practical in their approach.
Importantly he adds, it’s the steps after the idea that count – how you execute an idea, whether you embrace opportunity and how you position your idea in the right context so that it can thrive.
As entrepreneurs looking to grow their companies, the audience was keen to get the scoop on what a major investor looks for in a startup venture, and how venture capitalists approach their investments in startups.
“Go big,” was Davison’s answer explaining that a typical approach of a venture capitalist is to demand or encourage high targets from founders in order to cover costs or losses.
During a question about ‘unicorns’ – startups valued at over $1 billion – Davison said there are very few commonalities between them except, ironically, their inherent uniqueness.
“The most successful ideas are often seen as outrageous,” he said.
And while Davison encouraged student startup founders to think big, if that’s what they wanted to aspire to, he also advised them to run their own race.
“Let go of comparing yourself to others,” he said.
UTS is working toward developing the next generation of entrepreneurs and providing students with opportunities to learn and experience the world of startups. For more events like this, sign up to our newsletter.