America's No. 1 financial conglomerate

Chapter 357 The Enemies Have Formed a Group

After Wenger left, Ernst did not call Peter Thiel, but flew directly to San Jose.

He wasn't there to interrogate him; he knew that since Peter Thiel hadn't contacted him, there must be a way to resolve the issue.

However, the competition between PayPal and bilI is no longer a small-scale battle between two companies. It has become a complex battle involving Wall Street financial giants and e-commerce giants Amazon and PayPal, which Peter Thiel cannot handle.

Even with mental preparation, Ernst couldn't help but widen his eyes in shock when he heard Peter Thiel's report: "You mean, the BIL system is actually based on Windows NT?"

Windows NT is an operating system launched by Microsoft in 1993 for the enterprise and server markets. Its core purpose is to provide enterprises with stable and secure multitasking capabilities.

Compared to the Windows system that is usually intended for ordinary users, Windows NT adopts an independent kernel architecture. The kernel of NT and the kernel of consumer-grade Windows are like products from two different worlds.

It supports true 32-bit computing, performs better in memory management and multitasking, and can manage various programs clearly. Even if a program crashes, it will not affect the normal operation of the entire system, unlike Windows, which is prone to blue screens.

Even so, in terms of stability, Windows NT is at best a first-class product compared to the top enterprise-level systems on the market, not outstanding, and it cannot compare with Windows' dominance in personal operating systems.

BIL's choice of it as the system architecture is not impossible, but it's just very strange.

First, there's the issue of cost. The annual fee for using Windows NT is not a small amount, which is undoubtedly a significant burden for companies that need to control costs.

Secondly, its potential for secondary development is pitifully small, like a house that has already been renovated and is now completely unfinished; trying to renovate it in a new way is as difficult as climbing to the sky.

Compared to Windows NT, PayPal uses Linux, which is one of the most common choices for businesses.

First of all, Linu's biggest advantage is that it's free, which is undoubtedly more attractive to startups and can save them unnecessary expenses.

Every penny a startup spends must be spent wisely, and every penny saved must be saved.

Furthermore, Linux is an open-source system, allowing companies to freely perform secondary development according to their own needs, offering greater potential.

Whatever function you want it to have, theoretically it can be achieved as long as the technology is in place.

Despite Microsoft's dominance in the personal operating system market, it's not so successful in the enterprise operating system market.

The current industry leaders are uni and Linu. The former has been deeply involved in the enterprise market for many years and has already established a firm foothold. The key is that it has more relevant technical talent and technology reserves.

The latter, on the other hand, relies on being free and open source, offering greater operational flexibility, and has rapidly risen in the enterprise market in recent years.

Even if biI doesn't want to invest the effort in secondary development and wants to choose a mature version on the market, it should choose uni instead of Windows NT.

Has Microsoft entered the fray as well?

Wall Street, Microsoft, Amazon, and eBay—have actually joined forces?

Ernst's brow furrowed involuntarily, like a crumpled piece of paper that couldn't be straightened.

The more he thought about it, the more likely this situation seemed. PayPal was in competition with Wall Street, not to mention Bezos and Bill Gates. They probably wanted nothing more than to tear him apart and drink his blood. If they could join forces to suppress his company and it would benefit them, they would be more than happy to do so.

And then there's eBay, the only company that hasn't directly dealt with PayPal, which certainly doesn't want to be controlled by others in the payment field.

For eBay, being able to invest in an online payment company and take control of the payment process is much better than obediently using PayPal, and it gives them a lot of peace of mind.

Ernst then thought of Sequoia Capital. Could this Silicon Valley firm also join this group effort?

Sequoia Capital is a major investor in eBay and wields considerable influence within the company.

Peter Thiel, observing Ernst's ever-changing expression, began to wonder: it seems the situation is more complex than he imagined, and he may have underestimated the problem.

He cautiously began, "We're about to have a high-level meeting, would you like to come along?"

Ernst snapped out of his reverie and nodded. Even if it was just listening in, he could see what good ideas Peter Thiel and the others could come up with. Maybe it would even give him some new inspiration.

"Let's go then."

The moment the conference room door was pushed open, the management team, who were already seated inside, were all stunned. They never expected that Ernst, the legendary behind-the-scenes boss, would suddenly appear here.

Vice President Eva Heck reacted the fastest, quickly standing up with a warm smile on her face.

The others also stood up, greeting Ernst warmly while unconsciously moving back to make room for him.

After everyone was seated, Peter Thiel cleared his throat and officially began the meeting.

Today's meeting focuses on three key points: user acquisition, user retention, and revenue.

"PayPal is undoubtedly the leader in the online payments industry. Although various payment software have sprung up like mushrooms after rain in the past six months, trying to get a share of the market, it is undeniable that we still firmly hold 70% of the market share in the online payments industry."

"Our enemy has never been these peers, but ourselves."

These words perfectly align with Ernst's business philosophy: as an industry leader, the real threat never comes from competition among peers, but from one's own innovation capabilities.

The existence of competitors is not terrible. As long as a company can keep up with the pace of innovation, competitors will always be able to follow behind and copy, playing the role of a follower.

However, once a company loses its ability to innovate, it will find that its competitors are getting closer and closer, then it will be overtaken by them, and finally it will be left far behind, eventually becoming a thing of the past that is forgotten by the market.

"First, let's talk about user acquisition. What we care about is letting users know about us. If users don't know about us, they are even less likely to use PayPai. That's not reaching users; it's reaching ineffective users."

At this point, Peter Thiel raised the user acquisition challenges currently facing PayPay: "Traditional Google services, such as TV Google and subway signage Google, are becoming increasingly expensive and less cost-effective. As for online Google, the prices of some key search terms are also ridiculously high."

"Everyone, tell me, do you have any good ideas for promotion?"

Traditional GG (Gifts) are gradually declining. Nowadays, who would obediently sit in front of the TV and patiently watch a long GG? And how many people would pay special attention to GG signs on the street or GG stickers in the subway?

Online Google services are indeed more effective than traditional Google services, reaching target users more precisely. However, financial Google services have always been prohibitively expensive.

Take Google's financial section, for example. The pricing is already quite high, and some special keywords that can trigger Google's clicks can cost as much as twenty dollars per click.

PayPay isn't like those deep-pocketed Wall Street banks; they simply can't afford such exorbitant Google fees.

If the company continues to invest in network security, its costs will increase dramatically, severely impacting its overall profitability.

Just as everyone was deep in thought and the meeting room was silent, Marketing Director Nerva broke the silence first: "My opinion is to focus on offline channels."

His voice instantly drew everyone's attention, and Nerva continued to elaborate on his ideas: "There are many offline resources that can be utilized, such as various salon events, concerts, large-scale performances, and even sports competitions, etc."

"We can proactively sponsor these events to more accurately target our user base, allowing users to see PayPay in real life and form an initial impression."

"Once users see PayPal, we can attract them to activate their accounts by offering coupons, turning them from potential users into our actual active users."

At this point, Nerva glanced at Ernst and added, "Some of Google's promotional methods inspired me. I think we shouldn't stick to the fixed standard of a $10 coupon, but rather set it as the minimum standard and launch more attractive and engaging promotional activities based on that."

PayPay's new user subsidy program has been in place for some time now, offering a $10 coupon to new users upon registration.

While this approach has attracted some new users to some extent, over time, users will inevitably experience aesthetic fatigue, feeling that it lacks novelty, and its appeal will decline accordingly.

"What do you mean by setting it as the minimum standard?" Ernst asked with interest. He already had a general idea of ​​Nerva's thoughts, but he still wanted to hear his specific plans.

Nerva's approach is correct; he understands how to adjust his strategy according to market conditions, rather than sticking to old ways.

Nerva's eyes flashed with excitement as he explained, "My idea is that users who register for PayPaI and complete each transaction will have a chance to participate in a lottery. The top prize could be quite generous, such as a car or a house."

He glanced cautiously at Ernst, "even at stocks of companies like PayPal or Google."

"If you can come up with a slogan like that, doesn't it sound incredibly tempting? I don't believe anyone could remain unmoved."

Just as Ernst thought, it was nothing more than playing word games.

Attracting users' attention with high-value prizes creates an auditory distraction, leaving a deep impression on users' minds with highly impactful prize information.

The car will be given away, the house will be given away, and as for stocks? Wouldn't ten or a hundred shares count as shares?

Not only should the prizes be given away, but they should also be given away as early as possible. A grand award ceremony can be held to deliver the prizes to the winners with great fanfare, generating enough buzz and attracting more attention.

Nerva grasped the essence of human nature—everyone has a gambler's mentality.

When people see others suddenly struck it rich or win big prizes, everyone secretly hopes that they too might be the chosen one and have that good fortune.

"Moreover, in this way, we can also solve the most difficult problem of user transfer effect," Nerva continued, his tone full of confidence.

A company's user growth cannot be entirely acquired through paid promotion. Most users are acquired through word-of-mouth and recommendations from existing users, which is the referral effect.

This is like the chain reaction of an atomic bomb. Once the first link is successfully activated, it will continue to trigger, resulting in explosive growth.

Waiting for on-the-ground promotion?

With a population of over 200 million, even if you hire a large number of ground sales personnel, it's impossible to make everyone aware of and use PayPay. This is not only costly and inefficient, but the time cost is also a major problem.

Nerva's plan is similar to buying lottery tickets. Even if you don't win, you'll hope that the people around you will also buy tickets and have the same bad luck as you, so that everyone can struggle together in the lottery army.

Even if someone you know wins the prize, it's not a loss, since you recommended PayPai to them. They might even get some material benefits, or at the very least, they might get some food and drinks.

"That's a good idea." Peter Thiel looked at Nerva with admiration. "This solution not only solves the problem of acquiring new users, but also addresses the problem of user retention."

To have more chances to win prizes, users will use PayPai more often for online transactions, which naturally increases user activity and retention.

Ernst nodded in satisfaction. This trip to San Jose was worthwhile. He not only learned more about the competitors, but also witnessed the wisdom and creativity of the PayPay team members, which made him more confident about PayPay's future development.

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