Read the following case study and Identify the top four strategic lessons (major themes, business-level strategy, RBV, 5 forces, the general environment, etc.

PayPal is a leader in online payment systems and services with more than 200 million active customer accounts and a growing number of transactions per active account. The platform leverages digital technology to connect buyers with sellers, creating a more frictionless way of transferring money from one person to the next. One of the biggest impediments PayPal had to overcome while launching its platform was the infamous chicken-or-egg debate. When building a platform business that serves two equally important sides of the market, which side comes first?

When it comes to new payment systems, the chicken-or-egg problem is especially prominent. Without sellers of products and services that are willing to accept the new form of payment, buyers won't use the new service. At the same time, buyers have no incentive to sign up for the new digital payment service if sellers won't invest the necessary time and resources to join the platform. This leads to the question of how do you successfully launch a new payments platform when you have no starting base and each side is dependent on the other to join? In short, how do you initiate positive network effects?

At first glance, this might seem like an insolvable conundrum, but through a series of smart strategic moves, PayPal not only solved this problem but also leveraged network effects to stimulate more demand and become increasingly successful. The first step was to make the sign-up process easier. The simplicity of using just an email address and a credit card to sign up was a major differentiator between PayPal and previous online payment systems, which often required several rounds of verification and a tedious setup process. By making the initial process of joining almost frictionless, PayPal was able to attract a good number of buyers, but not quite enough to start attracting sellers.

PayPal's next big challenge was finding ways to get new customers. Company leaders attempted a variety of methods, including advertising and business development deals with banks, but to no avail. They finally realized the most effective method for their platform was organic, viral growth. To accomplish this, they started giving away "free" money. New customers received $10 for signing up and existing ones received $10 for referrals. This new incentives-driven approach led to exponential growth, significantly increasing its customer base by 7 to 10 percent daily. Furthermore, the ingenuity of this tactic lies in not only incentivizing sign-ups but also retaining users. This move effectively guaranteed user participation on the platformif only to spend the $10 they had been gifted. This was a key take-away from the PayPal team: Simply getting people to sign up was not enough. The importance of customer retention far exceeded that of customer acquisition.

The explosive growth from this tactic led to the creation of numerous positive feedback loops. The more users experienced the convenience of online payment methods and cashless transactions, the more they expected sellers to have this payment method available when shopping online. This resulted in more sellers signing up for PayPal and displaying the PayPal logo on their websites, which helped to further spread the word about PayPal and led to more user sign-ups. PayPal also rolled out a referral fee for sellers to attract even more buyers and sellers.

PayPal's success thus far comes in part due to its ability to leverage network effects to drive demand, helping it spawn the organic, viral growth needed to jump-start the platform; however, this was far from the last step in PayPal's journey to initiate network effects. It then refocused its efforts toward eBay, a natural niche for the online payments platform since most sellers on eBay are ordinary people who don't have the setup to accept credit cards or other forms of online payment.

PayPal proceeded to simulate consumer demand on eBay by creating a bot to buy goods and then insist on using PayPal to pay. This apparent growth in demand led more eBay sellers to sign up for PayPal's service, which then led to more people using PayPal to pay for goods (hence initiating yet another positive feedback loop). This method was so effective that within three months, PayPal's user base grew from 100,000 to one million. Additionally, it led to eBay's acquisition of PayPal in 2002 for $1.4 billion.

PayPal is a business that facilitates value-creating interactions between its vendors and customers. Since it started, it has enabled millions of frictionless transactions between small merchants and consumers, allowing these merchants to conduct business online more seamlessly than ever before. PayPal's ability to evince and manage positive network effects has been critical to producing value for each participant and has allowed it to gain and sustain a competitive advantage over other online payments platforms.

Even today, PayPal is still looking for more ways to initiate positive feedback loops. Venmo, which is a mobile payment service with an emphasis on the social sharing aspect and one of PayPal's newer products, has become a ubiquitous payment method and is particularly popular with millennials. About 90 percent of Venmo transactions are shared within a social context, which is a coveted feature from a merchant's point of view. As millennials use Venmo to pay, and by identifying the merchant in the subject line of their payment, it becomes free advertising for that merchant. With ever-present social media, word-of-mouth advertising is not only free advertising but also one of the most powerful ways of getting a brand out there. This in turn triggers another positive feedback loop as more merchants begin providing "Pay with Venmo" as an option on their website, which leads to more users signing up for Venmo.

In 2019, just four years after eBay had spun off PayPal to again make it a standalone company, PayPal's revenues were over $15 billion and its market cap stood at over $125 billion. In comparison, at the same time, the market cap of the famous investment bank Goldman Sachs was $75 billion and that of Wells Fargo, one of the largest American banks, was $215 billion. As an online-only financial institution, PayPal has been a huge success, in no small part due to the fact that its strategic leaders, including co-founders Peter Thiel and Elon Musk, figured out how to initiate positive network effects