Is Reputation the Ultimate Leverage? How do Companies Protect it: (A PayPal Case-Study).

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." -Warren Buffett.

On Sunday 22nd of September 2024, the popular YouTube streamer and social media influencer Kai Cenat announced on X, that he was quitting streaming to become a full-time Basketball Player.

Although it may sound comical; the same week, a similar announcement was made by the famous YouTube sensation and hardware technology reviewer Marcus Brownlee, who shared his decision to launch a software application that allows users to download and use new wallpapers on their iPhones, a decision that completely changed the direction of his career from a ring-side hardware technology critic to an active combatant in the software space.

Drawing parallels between these two figures would be akin to pointing out the similarities between a Tesla and a Ferrari. But highlighting the differences in both their decisions would be like saying Tesla, decided to go into the food industry while Ferrari will be moving into the financial services industry. I don’t know about you, but I would be more willing to buy food made by Tesla than to buy Ferrari-issued bonds.

Whether the food makes sense or not is for me to decide, but nobody can say whether or not Ferrari will be as good at issuing bonds as they are at making fast and sexy cars. And even if they are as good, how long can they do it for, not to mention who will be interested in taking the risk of purchasing financial instruments from them?

Beats me.

So, if you’re wondering how I can buy food from Tesla, then you might also be wondering how reputation works. But for those of us who don’t know, or are maybe still figuring it out, I bid you to join me as we take a deep dive into PayPal’s 25-year history of operational excellence.

Essay Outline:

1. Introduction: Understanding Leverage.

2. A Brief History of Modern Capitalism

3. Measuring Leverage: From Gold to Bitcoin.

4. Managing Organizational Change: The old PayPal vs the new PayPal.

5. Lessons in Reputation Management

6. Conclusion. Redefining Leverage.