🌏 Career Strategy #11: Proximity

How the entrepreneurs behind PayPal, Tesla, Palantir, LinkedIn, Reddit, YouTube & more created the 'surface area for luck to strike'.

Welcome back to Fuzzy’s Career Strategy Series, where we share research-backed strategies & stories to help you realise your best career.

• Part 1: 👋 Introducing the Career Strategy Series

• Part 2: 🪜 Ladder Climbing as a Strategy

• Part 3: 👩‍🎓 Controlled Supply as a Strategy

• Part 4: 🥇 Excellence in a Power Law Field as a Strategy

• Part 5: 🔍 Niche-ing as a Strategy

• Part 6: 🧱 Skill-stacking as a Strategy

• Part 7: 👷 Be A Generalist as a Strategy

• Part 8: 📊 The Portfolio Career as a Strategy

• Part 9: 📣 Building a Platform as a Strategy

• Part 10: 🌊 Wave-surfing as a Strategy

• Part 11: 🏗️ Adding Leverage as a Strategy

• Part 12: 🌏 Proximity as a Strategy

• Part 13: ⏱️ Sequencing as a Strategy

There are thousands of possible pathways for your career, but our research found there are ~10-15 dominant career strategies, which can be layered together if needed - and we’ll be breaking those down for you in this series.

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🌏 Introducing Strategy #11: Proximity

Lucy here, from Fuzzy 👋

Normally I don’t share personal experiences in these posts, but I want to kick this one off with a story:

A (very smart) friend at Cambridge once told me he was optimising for people and learning in the early years of his career.

This was a revelation to me. In fact, it was probably critical to my long-term interest in career strategy.

I hadn’t ever thought about it in those terms, but he had put into words an impulse that many of us understand instinctively - the desire to be where the action is in your chosen career.

Silicon Valley for tech. Hollywood for media. New York for finance. And so on and so on.

What was interesting to me was that my friend wasn’t targeting a specific outcome, like wanting to be a Law Partner by 30, or becoming Steve Jobs’ PA.

Rather, he was making a bet that his rate of professional growth and opportunities would be highest in a specific environment.

This career strategy is known as proximity.

And it’s behind the outstanding success of groups like the PayPal Mafia, who went on to grow companies like Tesla, SpaceX, Palantir, LinkedIn, Reddit, Yelp, YouTube, Yammer, Affirm & more, after being early employees of the payments company PayPal in the early 2000s.

We’ll unpack later that story later, but for now let’s dive in and break down the strategy!

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💡 Defining proximity.

This strategy is about maximising your proximity (closeness) to opportunity.

In practice this means maximising your proximity to interactions which bring opportunity a.k.a. to people who can unlock opportunity for you.

🧳 Moving to a place like Silicon Valley to pursue a career in tech is a perfect example of proximity as a strategy.

As the undisputed #1 region globally for tech startup creation, it combines a leading university (Stanford), established tech companies, tech startups and a large pool of venture investors, all condensed in one place & continuing to compound in value as an ‘ecosystem’ over time.

🙋 How might proximity create advantages in a place like this?

• You’re surrounded by colleagues and potential mentors who are ambitious and high-performing, which leads you to lift the level of your own performance.

• You work in a place where the cutting edge of technology is being developed, so you understand new trends first & can capitalise on them.

• You join a leading startup or tech company, which acts as a training ground to build skills, understand markets & find future co-founders.

• Each new person who joins your network brings a new set of potential ways to create value for you and others within it, leveraging their insights, experiences, connections, complementary skills and more.

• You have a chance conversation at a party, which leads to an exciting new role or spotting a gap in the market for a great new business idea.

• People who have made money in tech become early employees, investors and advisors in each other’s new business ideas.

↔️ A good way to understand this concept is to compare two extremes:

• Say you’re hoping to pursue a career in technology.

• You’re choosing between moving to a town of 100 people in a rural area OR moving to Silicon Valley.

• The rural town has a lower cost of living and a nicer natural environment - and maybe there’s one other person in town working as a software engineer remotely. You can still work, launch businesses & network.

• But in a rural town, you and the other software engineer might be just two dots in a career ‘box’ - occasionally bumping into each other and interacting, probably in similar ways.

  

• Whereas in Silicon Valley, the volume, diversity & quality of interactions you have is much higher, and your career box looks a little more like this:

So it’s not that moving to Silicon Valley guarantees that you’ll experience career-changing opportunities… but it dramatically increases the ‘surface area for luck to strike’ by exposing you to more opportunities.

Actually, you get lots, when you follow a proximity strategy.

Is proximity an outdated strategy in 2024?

Traditionally, proximity was a physical strategy - especially in pre-internet, pre-pandemic world where being in the same location gives you unique access to more in-person interactions.

But in a world of LinkedIn, YouTube, X and tools that allow you to have meaningful interactions that create a flow of opportunities from anywhere in the world, you can think of proximity in both geographic and social terms.

Your network & relationships can be built from anywhere - though many argue that it is harder to have the quality and density of interactions remotely.

We’d love your thoughts - let us know in the comments below!

🕸️ Case Study: how proximity fuelled the PayPal Mafia’s success.

The "PayPal Mafia" are a group of former employees and founders at the early online payments company PayPal - a staggering number of whom went on to become influential figures in Silicon Valley and beyond.

Image courtesy of Fleximize.

💸 The origins of PayPal.

• In 1998, Max Levchin and Peter Thiel co-founded Confinity, originally a security software company, which soon pivoted to developing digital wallet software. Around the same time, X.com, an online financial services company founded by Elon Musk, was established.

• Two years later, X.com acquired Confinity. After a power struggle and a series of disagreements over the company’s direction, Musk was ousted as CEO, and Peter Thiel took over. The combined company began focusing exclusively on Confinity’s digital wallet product, rebranding entirely as PayPal.

• Under Thiel’s leadership, PayPal quickly became popular on eBay, gaining traction as a preferred online payment method. PayPal went public in February 2002, raising $61 million, and just four months later, eBay acquired PayPal for $1.5 billion, leading to significant payouts for early employees.

📈 Post-PayPal success.

Many early employees used their new wealth and experience to start or invest in other tech ventures, becoming known as the "PayPal Mafia."

• Peter Thiel: After PayPal, Thiel co-founded Palantir Technologies in 2003 and became an early investor in Facebook.

• Elon Musk: Musk went on to found SpaceX, buy and become CEO of Tela, and fuel the growth of a number of other high-profile ventures, becoming one of the world’s most influential entrepreneurs.

• Reid Hoffman: Hoffman co-founded LinkedIn in 2002, which went public in 2011 and was later acquired by Microsoft in 2016.

• Steve Chen, Chad Hurley, and Jawed Karim, created YouTube in 2005.

• Yishan Wong: Worked as CEO of Reddit from 2012 to 2014.

• Jeremy Stoppelman: Co-founded Yelp in 2004, where he continues to serve as CEO.

• David Sacks: Founded Yammer, an enterprise social networking service, in 2008, which was acquired by Microsoft in 2012.

• Max Levchin: Levchin founded Slide, a social media app company, and later Affirm, a fintech company in 2012.

🪴 How proximity contributed to their success.

What was it about the experience of being part of an industry-changing startup early in their careers that led to so many PayPal alumni going on to shape the tech landscape themselves?

There are a few mechanisms here.

1. Scaling & tech expertise 📈
   
   Working at PayPal during its period of breakneck growth provided deep exposure to high-stakes, high-speed software development and customer acquisition.
   
   The experience taught PayPal alumni how to build scalable systems, manage rapid growth, and hire top talent, which helped them launch companies that could grow into major players.
   
   These skills were especially useful as they entered new fields - for example, Yammer (David Sacks) and LinkedIn (Reid Hoffman) both involved scaling online networks, while YouTube (Steve Chen, Chad Hurley, Jawed Karim) leveraged video technology to launch a scalable video-sharing platform.
   

2. A trusted network 🤝
   
   At PayPal, early employees built a unique camaraderie and trust, which they carried forward into new ventures.
   
   Many PayPal Mafia startups involved multiple former PayPal colleagues who knew each other’s strengths and shared a cohesive vision. For example, Yelp was founded by Jeremy Stoppelman with early support from Max Levchin, and YouTube was founded by Steve Chen, Chad Hurley, and Jawed Karim, who were also former PayPal employees.
   

3. Access to capital 💰
   
   PayPal’s acquisition by eBay gave its early team financial resources to either invest in new startups or launch their own.
   
   Additionally, the group’s early successes earned them credibility with top venture capitalists, helping them secure funding for projects like LinkedIn, SpaceX, and Palantir.
   
   Peter Thiel, in particular, became a prominent venture capitalist, establishing Founders Fund and becoming one of Facebook’s first investors. His connections allowed him to both mentor and fund ventures from other former PayPal colleagues.

👉 Inspired by the story of the PayPal Mafia?

They’re also great examples of other strategies profiled in this series, like wave-surfing, leverage, platform-building and controlled supply.

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🧠 Keep in mind.

A few considerations to note before you go all-in on proximity.

• 🌐 The anti-proximity case: Especially since the jump in remote work during the Covid-19 global pandemic, many knowledge workers have more flexibility than ever to work from anywhere.

• 🔻 Proximity has trade-offs: Proximity is often expensive - working from places like Silicon Valley, New York, Hollywood & other hubs can be expensive, hyper-focussed on professional growth & follow their own forms of groupthink. Through a more thoughtful lifestyle design, you may actually be able to create more financial freedom, time and space to accomplish what’s important to you in work and life.

• 🪞 Mimetic desire traps: Do you actually want to be at the ‘centre of things’, or is your motivation driven more by FOMO? Reflect on what you truly value and what career strategy you want to follow, to ensure you’re making decisions that serve you best.

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Found this helpful?

We created this series to help people realise their best careers - so if a post really resonates with you, we’d love you to share it! ✉️

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Keen for more? Check out the other posts in the series 👇

• Part 1: 👋 Introducing the Career Strategy Series

• Part 2: 🪜 Ladder Climbing as a Strategy

• Part 3: 👩‍🎓 Controlled Supply as a Strategy

• Part 4: 🥇 Excellence in a Power Law Field as a Strategy

• Part 5: 🔍 Niche-ing as a Strategy

• Part 6: 🧱 Skill-stacking as a Strategy

• Part 7: 👷 Be A Generalist as a Strategy

• Part 8: 📊 The Portfolio Career as a Strategy

• Part 9: 📣 Building a Platform as a Strategy

• Part 10: 🌊 Wave-surfing as a Strategy

• Part 11: 🏗️ Adding Leverage as a Strategy

• Part 12: 🌏 Proximity as a Strategy

• Part 13: ⏱️ Sequencing as a Strategy