On The Upward Slide

When Horatio Alger moves to Silicon Valley, you get the American Dream on steroids. Case in point is Max Levchin. In 1991, at 16, he immigrated to Chicago from Ukraine. Seven years later, he went west and cofounded PayPal, which was purchased by eBay for $1.5 billion in 2002. His next step was launching two companies that took advantage of the user-powered Web 2.0 paradigm: Yelp, a local recommendation site run by two friends, and Slide, which he runs himself. Slide creates virally distributed widgets that run on a desktop or inside social-networking sites like Facebook. Its flagship application lets users create and distribute instant slide shows, but Levchin has gained tens of millions of users with Facebook applications like Top Friends and SuperPoke. Levchin, now 32, spoke to NEWSWEEK by phone from his San Francisco headquarters.

LEVY: DO you ever worry that social networking is a fad?
LEVCHIN: Social networks are now in their fourth or fifth generation. People are excited by being where their friends are, and by simple pleasures like photo or video sharing. But ultimately, those things aren't deeply engaging. They are a means of creating an enormous audience, and you need to quickly find ways to keep those audiences. The next great task is to bring meaning to people's interactions.

But how do you fight off boredom?
Part of our thinking anticipates ennui. We wrote the book on figuring out how to make user-generated content inherently interesting with our early products. People's turkey-dinner pictures are pretty much universal, but by giving people customization tools they can add something that makes them unique and engaging to their friends.

Does Google's dominance in Internet advertising stifle companies like yours, which hopes to make money on ads?
Google is extremely good at monetizing search. Competing in that space, or even being in that space, it's hard not to notice the elephant in the room. But I'm not sure they have shown tremendous success in other types of advertising.

PayPal alumni have been incredibly successful in start-ups. What was in the water there?
I wish I knew how to bottle that particular water, because that would be a business in and of itself. We had a whole bunch of people who were already entrepreneurial. PayPal had this great ride, and once it was over, all of us had more resources to go start other rides. But it's not like we weren't thinking of rides before.

In Sarah Lacy's new book "Once You're Lucky, Twice You're Good," you're described as determined to start two billion-dollar companies. One isn't enough?
Starting companies is an addiction. Being a CEO is hard work. You have conflicts, personnel issues and all that stuff. Compare that with [the less stressful role of] writing code all day long and figuring out fun user-interface issues. Once I thought that's what I would do, and get married, have kids, and that would be my lifestyle. Except that the feeling of being able to impact 50 million people's lives is very, very infectious. You can kid yourself into believing that you should think globally and act locally, but it's more fun to think globally and act that way, too.

With PayPal you handled people's money, and with Slide your widgets do things like rate friends. The stakes seem less dire.
In a certain sense, it's more dire than money. People get angry when their top friends get misidentified. Maybe emotions are more important than dollars.

Will you stay with Slide until an IPO?
I'm determined to stick it out. I don't like to think about an IPO except in the context of creating liquidity for my employees and investors. The only reason to have an exit event or a "liquidity event" is because people need their nice cars and houses.

You're locked into that, aren't you, by taking the investors' money?
I'm locked into having to build something very big. But this is a rare case where the entrepreneur is very aligned with his investors. I'm extremely keen on pushing this thing as big as it can possibly go, and I'm fortunate to have the backers who believe in me.

How big do you think Slide could be?
I consider really big to be impacting about 100 million people on a daily basis, as an essential part of their lives. I think we're pretty nicely on track towards that. I've seen a sticker that says, YOUR MOM IS IN MY TOP FRIENDS. I think you've made it once your brand is on a sticker.

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