Elon Musk’s Obsession with X: Unraveling the Tale of X.com and PayPal

Elon Musk, during the bustling era of the late 1990s, rose as an ambitious entrepreneur with a vision poised to transform the world. After successfully selling his startup Zip2 for a substantial $22 million, Musk’s appetite for innovation remained insatiable. Thus, he embarked on his next venture, X.com, envisioning an online hub that could revolutionize financial transactions globally. Nevertheless, the narrative of X.com transcends mere success; it weaves a tale of unwavering determination, conflicting visions, and the consequences of branding missteps.

The Birth of X.com and Musk’s Vision

Elon Musk, in 1999, a 28-year-old South African immigrant, decided to invest $18 million of his Zip2 fortune into building X.com. The name “X” was Musk’s vision of associating the letter with treasure, as in “X marks the spot.” Despite the initial association with the world of finance, the unfortunate reality was that many people perceived “X.com” as a domain for adult content, rather than the financial services hub Musk envisioned.

The PayPal Mafia and the X.com vs. Confinity Rivalry

During the early stages of X.com, Musk found himself entangled in a fierce rivalry with Confinity, a startup operating from the same Palo Alto office space. Recognizing the value of paying by email, Musk made pivotal decisions that led to X.com’s growth and forced a merger between X.com and Confinity in 2000. Musk became the largest shareholder of the combined company.

The Rise of PayPal and Musk’s Fateful Decision

In the midst of success, Elon Musk faced a momentous decision. The team at Confinity had developed a payment app that eBay sellers adored, and it was named PayPal. However, Musk’s unwavering conviction in the power of “X” led him to rebrand the payment product as “X-PayPal” and begin phasing out the PayPal name altogether.

The Boardroom Coups and Musk’s Persistence

Despite strong opposition, Musk persisted in promoting the X.com brand. He continued to push his vision of “X” revolutionizing the financial world, earning both admiration and concern from investors. The battle for the name culminated in a boardroom coup, resulting in Musk being ousted as CEO, and the X name being replaced by PayPal.

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The PayPal Rebranding and the Power of a Name

With the name PayPal now firmly established, the company soared to new heights. PayPal became synonymous with secure and convenient online payments, winning over users and merchants alike. Elon Musk’s decision to let go of the PayPal name and his unwavering pursuit of “X” might have cost him dearly in the long run.

Elon Musk’s Perseverance and Insights

To be fair to Musk, he was no dummy back then. The most recent bestseller to tell the story, Jimmy Soni’s The Founders: The Story of PayPal and the Entrepreneurs Who Shaped Silicon Valley, isn’t shy about Musk’s shortcomings (unlike Elon Musk, the 2017 biography that tends towards hagiography). But even The Founders paints a picture of Musk as a supremely hardworking 20-something whose fascination with finance allowed key insights in the messy process that created PayPal.

For example, Musk took an early lead in the online payments war between X.com and its rival, a startup called Confinity that worked out of the same Palo Alto office space.

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Not only was Musk quicker to recognize the value of being able to pay by email (rather than by beaming it between Palm Pilots, the concept initially championed by Confinity co-founder Peter Thiel), but he paid X.com users $20 at sign up, while Thiel paid $10. Bleeding money from this competition, the companies were forced to merge in 2000 under the X.com name; Musk would be the largest shareholder of the combined company.

Musk had it all at this point. Especially after X.com’s first, lesser-known boardroom coup. This was where Musk ousted his handpicked CEO, Intuit veteran Bill Harris, after Harris had done all the hard merger work. Musk took on the CEO role himself. But tellingly, he did not realize the most valuable thing in his possession was a name. The name for Confinity’s payment app, the name that eBay sellers had come to love: PayPal.

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The Power of Branding: PayPal vs. X.com

The Founders goes into depth on the creation of the PayPal name, and it’s worth lingering on the point. Thiel’s team hired a professional naming company that considered hundreds of options, checked to see whether they’d violate trademarks, and came up with a shortlist that included MoMo, Cachet, and PayPal. The team took a while to come around to the latter, but as soon as they realized it could be a verb — “just PayPal it to me” — they never looked back.

While X.com garnered 200,000 users shortly after its launch, not one of those users said, “just X it to me.” Worse, the pornographic-sounding name had attracted what one early female X.com employee called “so many terrible, horrible emails.”

Elon Musk didn’t care. Not only was he enamored with how it sounded (and with the coolness of his personal e@x.com email address), but he also thought “PayPal” too limiting. “It would be like Apple calling itself the Mac,” Musk told Jimmy Soni, the author of The Founders. X was going to change the financial world, so it had to come before everything.

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Elon Musk & Peter Thiel - The 'PayPal Mafia' formed in the early 2000s
Elon Musk & Peter Thiel – The ‘PayPal Mafia’ formed in the early 2000s

The payment product at the merged company, he decreed, was to be called X-PayPal. According to Max Chafkin, author of the Peter Thiel biography The Contrarian, Musk “asked the marketing department to rework the PayPal logo to include an X,” and was “beginning to phase out the PayPal name altogether.”

Team Thiel fought hard against X. A series of focus groups revealed “again and again, the theme of ‘oh god, I wouldn’t trust this website, it’s an adult website’,” X.com marketing manager Vivien Go told Soni. “It’s kind of hard to refute when people say over and over, almost in the same words, ‘I just wouldn’t trust that. That sounds really mysterious.'”

Musk’s Unyielding Belief in the X Concept

Despite the challenges and warnings, Musk remained resolute in his belief in the potential of “X.” He dealt with the trust problem, then as now, by ignoring it. Also, then as now, he insisted on engineers rewriting the codebase his way, and seemed oblivious to the amount of cash the company was burning. It was all in service to a higher vision of X, which he described to eager investors as “the Amazon of financial services.”

All of this led to the company’s second boardroom coup, the one where Thiel called a meeting to oust his old frenemy while Musk was on a delayed honeymoon with his first wife, Justine. That was cold — but Musk’s instinct was to cover it up, save face, and keep pushing X.com as the company name, even if he couldn’t win on the PayPal product question.

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The Lingering Question: Can X Succeed Today?

Fast forward to the present day, and Elon Musk is still fixated on “X.” After repurchasing the X.com domain from PayPal for sentimental reasons in 2017, Musk has teased a new venture under the enigmatic name. However, the world has evolved since the dotcom boom, with established payment networks like Apple Pay and Google Pay dominating the market.

While Musk’s determination is undeniable, the prospects for “X” remain uncertain. Musk’s secrecy surrounding the upcoming X service and his apparent dismissal of potential challenges raise questions about his understanding of the current technology market. Moreover, the trust deficit among users caused by past decisions lingers, potentially hindering any future success.

In a CNN report from 2001, Elon Musk appears to assert that it was his choice to take a step back, and he names the company “X.com, now called PayPal.”


Elon Musk’s obsession with “X” has been an intriguing journey through ambition, branding missteps, and perseverance. While X.com’s legacy lives on as a cautionary tale of hubris, it also reflects the indomitable spirit of a visionary entrepreneur. Only time will tell whether “X” will reclaim its former glory or if it will fade into the annals of history, but one thing remains certain: Elon Musk’s relentless pursuit of innovation will continue to captivate the world. In a rapidly changing landscape, the success of any venture hinges on understanding the market, user trust, and the power of a name. As Musk ventures into the future, he may find that sometimes, it’s not the pursuit of a single letter but rather a carefully crafted vision that can truly change the world.

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