Talking Leadership with Dan Schulman and Jennifer Tescher

I think all of us are made by — I mean literally and then figuratively made by our parents. And so the people who influenced me most clearly were my mom and my dad. And we really had nothing growing up. I was born in Newark, moved to an apartment in New Brunswick, the great state of New Jersey. My mom took me to civil rights marches when I was a kid in my stroller. This was a time where really civil rights marches were not something that you took lightly; there was always the specter of potential violence in them. My mom would march down in the South, and I remember being with my dad at a very early age — there were no cell phones or anything — just he was pacing the house back and forth, worried about you know whether she'd come back and in what shape she would come back. So my grandfather was a union organizer. I mean, there was a lot of very kind of left-left values that were put into me. And then you know I grew up, and I wasn't exactly sure where I wanted to go, certainly wasn't Wall Street. I mean, everybody says that. I'm like Occupy Wall Street, not Wall Street. I dress like it for sure. But I really learned at an early age that there are a lot of people in this world who don't have a voice, who are underserved, who struggle. That was me growing up, my parents growing up, it's definitely my grandparents. I still have family members who struggle. So it comes very naturally, and it comes with a kind of an authenticity through and through. So I think this is our greatest responsibility and challenge as an industry, and it's something that as long as I'm around — and I can do something about it — I feel I've got an obligation, and really almost a moral obligation, to do so.

Well, I think there are two things that probably most of us respond to. There's things we feel with our heart and there are things we intellectually understand. And I think you can't argue the facts of the matter — that we're in the middle of a crisis. It's playing out in ways that are not just the individual anymore; it's really society. Our political systems are under tremendous stress. A huge amount of populism, and you have to basically say there's populism for a reason. It's because people are worried about their future. They feel the system is letting them down, and they are voting not for somebody but against what is. And many people have heard me say this, but my favorite quote on democracy is: "Democracy needs to be more than two wolves and a sheep voting on what to have for dinner." So think about that. But what it basically means is for a democracy to flourish, you have to rise above your own self-interest. But how do you rise above your own self-interest if you're on the very bottom of Maslow's hierarchy of needs and you're worried about making ends meet at the end of the month, you're worried whether your kids will have a better future or not? So I think intellectually these things are becoming right in our face right now. And maybe it was somebody over there, but now this isn't fringes of our population; this is mainstream. This is the new middle class. These are people we all know. And it's a segment of the market — it's probably the biggest segment of the market. So I think one, we can all intellectually get it. But I think the time that it really hit me is when you actually go out and experience it. So when I was at Virgin Mobile, we supported homeless youth. And I was hoping you were gonna talk about that. And the thing that really got me to understand homelessness was sleeping out on the streets of New York as a homeless person. You know, I already looked that way, but anyway, so it wasn't hard to figure. But having no money, begging for money — it's pretty humiliating, pretty difficult to go do. Your safety is at hand all the time. You're trying to figure out where to sleep; police are moving you along. And I really felt that viscerally in my heart. That has changed the way I look at homelessness ever since. So when I got to American Express, before I really started talking about the underserved or unbanked — as I used to call it until you taught me to call it underserved — we did an exercise where we went out and we tried to cash a check, and we tried to send a bill, and we tried to send money to somebody. And everybody should do it. I'm sure most of you have already done it. But we did this. It was a FedEx. Yeah, yeah. And if you do it, you realize when you're standing in line at a check-cashing location and the people behind you — and you're standing there maybe for like 45 minutes — the people behind you are like, "Yeah, yeah, you know, Sam got held up by a robbery right outside here." There's more incidents of violent crime around these places. I get up to the check casher location. I've been waiting for 45 minutes. People are like, during flu season, they're hopping all over me. And I come up with my check, and my check says "Dan Schulman" and my driver's license says "Daniel Schulman," and they wouldn't cash my check. But they said I could go up to an apartment down the street where they would cash checks for like 10 or 15 percent. And I was like, okay, I've done enough of this to begin to understand what the real issues are. And that's when I started to be able to talk about it much more passionately and as a first-hand participant. So I think for leaders and for others — there's a requirement at PayPal: you have to understand the issue, and then you need to experience it to really feel it viscerally.

Yeah.

Yeah, well, I think it's more difficult than ever before because I think much more is expected of leaders now. I think much more is demanded of leaders. I think much more is necessary from leaders. Employees expect that leaders will act on the values of the company, not just have those values hanging on a wall. And I think sometimes those values come under attack. And as I said after Charlottesville — not Charlotte, but after Charlottesville — where you know we try not to allow PayPal to be used to fund people who advocate for any kind of hate or violence. But hate is a very difficult thing to define. Where does free speech end and where does hatred begin? And we take that very seriously. My view is always like, Nazis — like, I don't know who's gonna debate that — but like we're not allowing that. And PayPal, KKK, other things, we're just not allowing that. People can debate whether that's free speech or not, but not for me. But there are others that are more difficult. What I said to my staff and every other person is: there's no way to avoid the culture wars if you're a big consumer company. You have to take a stance. But those stances need to be values-based stances, not political decisions. Like I never thought that HB2 in North Carolina was a red issue or a blue issue. I know a lot of people did, associated that way. I thought it was a red, white, and blue issue. I thought it was an American issue. I thought it was against the values of our country. You know, we're a country of immigrants. I quoted Emma Lazarus at our all-employee meeting when we were talking about this. Because after the immigration bill came out, we had eight people affected by that at PayPal — eight people. And somebody said — and I was on CNN saying that I thought it was unconstitutional — and one of our employees said, "Why are you out there making such a big deal about this when there are only eight people inside?" You know, we have 20,000 people inside PayPal. I said, "Well, I think you might feel different if you were one of the eight people." And I think it's a slippery slope, I really think it's a slippery slope if you start allowing discrimination here, then who knows where it may wind up. And I think that businesses now need to be a force for good in the market. I think we just actually need to stand up. We cannot allow certain ills and certain injustices and certain assaults on civil rights to happen and not be part of the solution. I guess I don't really believe that we are solely about for-profit. I believe we have a bigger responsibility as corporations, and we need to address that. And we have so much power to go and do that. I mean, it's really an unfair sort of thing. We can attract incredible talent, we have great resources to apply to this. I think our whole mission and vision is about democratizing financial services. It's 20,000 people; there's a lot of gusto and passion around it. Focus on one thing, we should be able to make a difference in the world. Now, we can't do it alone. We need to partner with regulators, we need to partner with governments, we need to partner across the industry. But I heard it at a panel right before this, and I agreed with the person who said: we need to figure out how we come together as an industry and take the best assets that we have — the best assets that maybe a traditional financial institution has — bring them together and put out value propositions into the market tailored to certain segments of the market that neither of us could do alone. And I feel like — and I said at Money 2020 — this is the moonshot idea of our industry. This is our time to go after this. Because think about what we can do. You know, your kids always say, "What do you do?" — "Oh, yeah, if you go to..." — and they know I work for PayPal, and actually they love it, so I'm in good shape on that. But like this is the thing that you want to say to your friends and your family: that we made a difference in the world. And the thing that gets to me about this crisis that we face is: it is solvable. I really honestly believe it is solvable. I wouldn't throw myself into a problem that's not solvable, and there are a lot of them out there. And I'm not saying that any of us can solve it, but even like I always say inside the company: if we can solve it for one person, that's great; but if we can solve it for a hundred people, it's amazing. But we actually have the ability to, maybe together, solve this for millions, tens of millions, maybe even hundreds of millions. And imagine the energy that that could release into the world and the changes that that could make. And to me, it's exciting to think about it. And the world is moving towards mobile, it's moving towards software, it's moving towards platforms. You know, we've got more power now in the palm of your hand than — name the metaphor — the early moon lander has more power than a crazed supercomputer in 1990. Things are changing in the world, and we have the ability to do things and imagine things that have never been done. And I think in financial services that's especially true. We need to imagine a future that may build on the shoulders of what we have, but it's different, fundamentally different — not for everybody, because there are different segments of the market. But for the underserved market, we should be able to do things that make their lives much simpler and easier, much more secure. And we ought to be able to take some of that $170 billion that they spend and return that back to them so that they can save and be ready for emergencies and help their kids to go to college or to get an education. So we should be able to do that. I mean, there's no reason why we shouldn't, and we should not excuse ourselves if we don't.

Well, first of all, what's the best way of answering this question without the expletive? No, yeah. Here's the thing: there's not a dichotomy between putting customers at the center of everything you do and being a great steward for shareholders. In fact, I think it's the opposite. I think if you don't do that, you're never gonna deliver what the potential of your company is. You're not thinking about end-to-end solutions, full end-to-end solutions, the pain points of the marketplace. And you're just putting out a product or doing something on a short-term basis. You're never going to build a great, enduring company over the medium term or the long term. And so to me, I don't think there's any conflict between those two things. And when we talk to our shareholders, I'm very upfront with what our mission and vision is. We just had an investor meeting with a room even bigger than this, because there are a lot of investors who are interested. And I lay out exactly what the vision and mission is, what we want to do from a platform perspective. They're very interested and think there's tremendous opportunity in PayPal, PayPal teaming with others and serving the underserved market, because they know it's a huge marketplace out there. And if you can do it in the right way, it can be a very profitable marketplace as well. And you know, a lot of people say to me, "Oh, you seem to be an activist CEO." I say no, I'm just trying to be a responsible leader of a company and a responsible citizen. I really don't feel like I want to be an activist; I just feel like we have certain responsibilities. We actually have the opportunity to make a difference. And when you do that, you attract the best talent to your company — by far and away. Like one of the great surveys we just did at PayPal six or eight months ago, it's something like 96% of people at PayPal are proud to work there. Wow, that's a huge thing. And why are they proud to work there? Because they know we're trying to make a difference, and they know we'll stand up for our values. They know we've got a very inclusive and expansive mission, right? Democratizing financial services is making sure that managing and moving money is a right for all citizens, not just a privilege for the affluent. They want to make that happen, and they know since it's expansive and inclusive, that we stand for diversity inside the company as well. My favorite quote about diversity is that diversity is a fact, but inclusion is a choice. And we need to make that choice to be an inclusive society, inclusive company. We are a better company as a result of that. We are a stronger company as a result of that, and we will have better results as a result of that as well. And so I feel like being that kind of company, being that kind of leader in a company like that — every shareholder should go yay, I love that. That's the right thing to do because they deliver outsized returns as a result of it.

Yeah, we're gonna do like my parents did to me: they're gonna shame you if you don't. I don't think it's gonna be hard, honestly. I don't think it's hard. I also heard on the panel right before this — you know, I think the time has come right now. I think it was a lot earlier quite some time ago, but we've got 3.6 billion people in the world right now that are connected to the internet. It's going to be half the world's population. You've got the vast majority of people who are going to have smartphones in their hands. You can buy a smartphone in India now for $25. You've got governments that are really — like the Modi administration in India — really thinking hard about how do you — well, they think a lot about inclusion, but they're beginning to think about health as well. But really, how do you create a whole software stack to drive digital payments and take out middlemen and make sure there isn't leakage in the system? So I think we're at the right time and place right now. We're fortunate about that. And we're also all really fortunate to work for companies that can make a difference. I think, no offense, whoever made this table — I'm sure it's a great company, and I'm sure they're very proud of how sturdy it is. But you know, you're wondering "so rubble already?" This is like, it's not gonna make the difference in the world. But we can make a difference in the world based on what we do. Financial health — that foundation to be sure that people feel comfortable and confident and can dream a little bit about what could be — is something we can make the difference about. And I think we're really fortunate about that. And you know, as I go around the world and I'm involved in a lot of forums now around the world, I'm involved with a ton of regulators around the world. We speak exactly this. Because every government, from the Chinese government to the Mexican government to the US government, all want that their citizens are content, that their citizens can move ahead, that they can create vibrant economies. And we should be able to help on that. And if they can't take that underserved market and bring them in, there's unrest that can occur. They can't maximize what they want to do as a government. So we're right in the middle of where we could be in our time. It's an exciting time. So I'm sure there'll be somebody up here next year who will inspire you and me and everybody else as well.