- Dan Schulman had his first foray
into social activism when his
mom pushed him in a stroller
at a Martin Luther King Jr. rally.
- My dad, he was worried that
I'd be the youngest person
to ever have their picture in an FBI file.
- Today, he's the CEO of PayPal.
Dan Schulman is known not
only as a financial innovator
but also as a steward of
financial democratization.
- My favorite quote on democracy
is that it needs to be more
than two wolves and one sheep
voting on what to have for dinner.
- Fighting for broader
inclusion and opportunity.
- I said we're pulling
out of North Carolina,
And by the way not everybody
agreed with our action,
I got plenty of death threats.
- He's called "The Moral
CEO", a title he's earned.
- We each can do something
that can make a difference
and I think we have a moral
obligation to do that.
- It's my pleasure to
have Dan Schulman join me
on "The Inflection Point".
- Thank you for joining us Dan.
- So nice to be with you.
- All right, let's start
at the name of the show
which is called "The Inflection Point".
Was there a moment in your life
which has made a tremendous
difference for you,
- The moment that sticks out
in my mind quite vividly,
it's a tragic moment but
I think we all share that,
we've all gone through
the tragedy in our lives.
It was my younger sister
died early from an aneurism.
I was still in my 20s when that occurred
and it really redefined just everything.
It was like a bomb blew up in my head
and redid all the wiring in my brain
and it really took me
from pre my sister dying
where a lot of life,
unfortunately was about me.
That's how I defined
it and yeah you know,
post her dying, I just
became much more aware
that every moment is a
really important moment
kind of the world beyond
yourself is so crucial
and so important and I
always thank my sister
for making me a better person.
I wish she was still alive
and I was a worse person
an amazing lesson.
- Wow.
- And that probably was the
most important inflection point
- That's, that's really poignant
and that was a few decades ago.
Since then you have been
making a lot of moments
more positive for so many more people
in the position of
leadership that you are in
But from the beginning you
have been pretty involved
in social activism as a youngster even
and then in the positions of power,
you have continued that to
be able to help other people.
Did it start when you
were in a baby stroller
with your mother taking you
to a Martin Luther King rally?
- I remember my dad telling
me this story later in life
that he was worried that I'd be
the youngest person to
ever have their picture
Both my parents were social activists.
They were both amazing role models,
very involved in their communities.
I remember vividly my dad was
in charge of a chemical plant
in Pascagoula, Mississippi.
This is in the early 1960s
and a person that worked directly for him,
a Black man was fired by
the plant manager down there
for drinking out of the
wrong water fountain.
- And my dad decided that he
had to fly down to Mississippi
Confront the plant manager
who was a very powerful
individual and say,
"That does not happen on my watch."
And I remember talking to
my dad when he came back,
I said, "Why did you do that?
And he said, "We're
defined by not what we say
That always stuck with
me and just this ability
to look at everybody with respect
and that everybody should
have equal opportunity
has always been just a
large part of who I am.
- Even before we get to PayPal
you've been taking actions on your own
to make sure that you had
the empathy and understanding
for what others were going through.
I think it was at American Express
that you went out when you were there
as a young executive and
you tried to cash checks
to see what that experience
was like for people
who were not part of the
financial services regime?
I mean they didn't really have access
- For me, for somebody to really advocate
for the products and
services they're building,
they need to experience
firsthand why they're doing it.
Once when I was the CEO of Virgin Mobile
and we were supporting homeless youth
and we were working with an organization
called StandUp for Kids and in
front of all of our employees
the director of that said,
"And Dan is going to spend
24 hours out on the streets,
"living as a homeless person
to understand firsthand
And the empathy that that gave
me, experiencing firsthand.
It was only for 24 hours right?
I was not you know,
something heroic by any means
but learning firsthand what
it meant to be invisible
what it meant to feel unsafe you know,
when you're trying to
figure out where to sleep
After that experience I could
advocate for homeless youth
and why we were doing this
in a way that I couldn't by
just understanding facts.
And I did the same sort of exercise
when I got to American Express
where we were trying to serve populations
that were outside the financial system,
that had to cash checks, stand in line,
that then had to stand in
another line to pay their bills.
And you understand that intellectually
that that's very difficult
but until you go through it yourself,
you don't understand how dehumanizing that
experience can be.
- Wow.
- And how problematic it really is
and so once everybody went through that,
and services we were
designing to help that,
but it was done with not just a,
you know it was done with a passion
around doing the right
thing for those populations
that were struggling to get by.
- Is, is that why it has made you as a CEO
much more sensitive to inequity?
I remember several years ago
on the North Carolina bathroom bill,
you were like almost the very
first to take a stand.
Were you scared for that?
- Companies that aspire
to be great companies
and I think PayPal's a good company
but we aspire to be a great company,
need to have a purpose
that they stand for,
a mission that they believe in
and then a set of values around that
that support that mission and you know,
one of the key values we
have is embracing diversity
And I felt that the bathroom bill
which allowed for the
potential discrimination
against somebody for
their sexual orientation
or sexual identity was
anathema to our value set
and I was watching the
Governor in my office
on my computer and he said something like,
"You know, a lot of companies
are talking about stuff
"but nobody's taking any
action and we're gonna be fine
"doing this bathroom bill."
And I literally walked out of my office,
down to the head of our
corporate communications
and I said we're pulling
out of North Carolina.
This is unacceptable and by the way,
not everybody agreed with our action.
I got plenty of death threats.
I mean I was at The Wall
Street Journal at the time
and covering this and it
was quite the controversy.
- Yeah.
- Most CEOs and companies
thought you were crazy okay?
And at the time, they did not think
that profit and purpose go together.
Okay, so they thought
why is he doing this,
sticking his neck out like that?
And by the way, Dan you had not been
the CEO of PayPal that long.
- I will say it was this moment,
one of these proud moments inside PayPal
that we would stand up for
our values and by the way,
that's tested every single year.
I don't know how any CEO or any company
thinks of themselves as not
part of their community,
not part of their country
and their economies.
We are all better off if
everyone has opportunity
and everyone has at least a modicum
of financial health and safety, because
it's crucial for our democracy.
It's crucial for our economy,
it's crucial for social justice.
- Then it must have been kind
of earth-shattering to you
when you found closer to
home inside your own company,
you were, heard that some
of your own PayPal employees
were struggling to make ends meet.
Especially you know, of how you feel
and what you've done your whole life
in wanting to make opportunity
for so many people.
- Yeah, well that was actually
a surprising result for me
I did a survey of all of our employees
because I thought the results coming back
would be really something
for us to be proud of.
Because you know, we're PayPal.
We pay at or above market rates everywhere
and you know, we're in
the fortunate position
to be able to go do that.
Even with that, what came back is 50%,
mostly our call center employees,
our entry level employees
but 50% of our employees
were financially stressed.
They were struggling to make ends meet
at the end of the month and we decided
we called it net disposable income, NDI.
And so we worked with academia,
we worked with a couple of nonprofits
and what they said to us is,
for somebody to be able to save,
for somebody to be able
to dream that their kids
will have a better life and they can do,
You need to target an NDI of 20%
which is five times what they were earning
and so here we are a
couple of years later.
We slashed healthcare costs by 60%,
we increased wages, we
gave every single person
in the company equity in PayPal
so they could enjoy any
successes we would have
in the market and today the minimum
that any employee has at PayPal is 16% NDI
and I hope at the end of this year,
we'll be quite close to that
20% target that we set up
because great employees
who are passionate,
who are financially
healthy, who are inspired
will serve our customers
better than any other company
who might aspire to go do so
and if we do that better
than anybody else,
then over the medium and longterm,
we will maximize the return
that we can give to shareholders.
- Let me stop you for a sec though.
Lowering the cost of
healthcare, giving them options.
Doing the you know, raising their income.
All these things cost you money.
It did have to hit your bottom line.
Did you just say I don't care,
it's the right thing to do?
- Any CEO at any company can
maximize profits next quarter.
I am trying to build something
that over the medium term,
over the longterm is something
that we could never hope
to build if we weren't making
those investments and I think,
you know if you look at our results
and you look at our
performance in the market,
I would say a lot of what
we've done in our investments
I mean when the pandemic hit,
I mean everybody was online all the time
and I have to say my use of
PayPal personally went up.
In part you had these very
loyal, happy employees
helping fuel the surge in your business.
- You know we went from
having, call it 60 offices
around the world to having
40,000 offices around the world.
- Yeah.
- 'Cause everybody's
the demand for our products increased
in terms of not just what we already had
but incremental services and capabilities
that we needed to put out.
And you know, I was so proud
of the way our employees
responded to that.
Actually the number of software
releases that we put out
increased by 26% year over year.
Even though we were working remotely
and that really comes from employees
that despite all the mental stress
they were personally experiencing
and the changes in their life,
understood just how important it was
for us to serve our customers.
And we, we really didn't miss a beat.
- Your stock has surged too.
So I think that for you as a CEO,
your philosophy of taking
care of your employees
And so using that as a track record,
then you now are trying to tell other CEOs
"We need to be paying our
employees a living wage."
- So there's a very fine line there Monica
which is you know, nobody really
wants to be told what to do
and nor do I really wanna moralize
because I know everybody's
facing their own pressures.
But taking care of our employees
really is a competitive
advantage for any company.
Each of us may not do
exactly the same thing.
I am, I'm all about employees.
Others about the environment
but what I do think
is really important is that all companies
and all leaders of
those companies stand up
and lean into the issues that face us
as a global society and
as a global economy.
We each can do something
that can make a difference
and I think we have a moral
obligation to, to do that.
- Do you think it is gonna become the norm
in capitalism now,
stakeholder capitalism or not?
- I think everyone is
served better honestly,
and our companies are served better.
If people don't have a
modicum of financial health,
and they think the system
is working against them,
to rise above their own
self interests and you know,
think about interests that
are maybe good for the whole
but maybe not for themselves individually
and our democracy requires
that my favorite quote
on democracy is that it needs to be
more than two wolves and one sheep
voting on what to have for dinner.
- Now we've gotta talk about Venmo.
I can't let you go without
talking about Venmo.
I mean for heaven's sake, like most apps
I learned about it from
my daughter who's now 22
but in high school I saw her you know,
they were all splitting lunches
and car rides with Venmo.
I didn't even know it was part of PayPal.
I just think Venmo is
great, PayPal's great.
Now I realize they're
all part of your company.
Tell me about Venmo and how
you envision it going forward.
- That's funny you've
mentioned that you didn't know
I gave a speech at New York University.
I thought a very inspiring speech
and one young man said you know,
"That was so great, but you know
"the company you really
need to worry about is Venmo
"because we all use Venmo."
And I was so happy to tell him
that we are the same company.
You know Venmo has
experienced explosive growth
over the last five years.
It's simple and easy, a social way of
of doing payments and managing
and moving your money.
It's less of a financial app
and more of a social type of app.
- But you have big plans
for it, I know don't you?
- We do, we're tremendously expanding
the functionality of Venmo
because the customers who use it love it.
- Exactly, well I'm one of those.
Okay so let me go to a topic
that is important to you.
That I think you maybe
still do this every day,
this martial art of Krav Maga,
did I mispronounce it?
- Nope.
You said it right.
- Okay you've been doing this
since you were a teenager.
So what are the similarities
between this martial art
and business and why do you do it?
And did you do it this morning
before we started chatting?
- I do it almost every morning.
So Krav Maga is sort of the
Israeli martial arts system.
It really means contact combat.
- That sounds scary.
- Yeah.
What I love about martial arts
is not just the physical element of it
but it's really the mental element of it.
It's the philosophy around martial arts
and really it is really the
ability to quiet your mind
in a very high stress environment.
One of the prevailing
philosophies of Krav Maga
is the best way to win a fight
is to not get into a fight.
So the art of de-escalation,
the art of being able to be humble enough
to walk away from something,
as opposed to confront it.
Also the philosophy of knowing
that if you're in a fight,
the surest way to get
hit is to stand still
- I could see that.
- You always have to move.
So there are so many of
these philosophies and adages
that can be applied to professional life
and as well as our personal lives.
That's a large part of why I've done this
- And you have a podcast that
you call "Never Stand Still"
which I guess is part of the
philosophy behind Krav Maga?
- Exactly, it's basically talking to CEOs
and athletes and musicians
and a number of different people on it.
How, how do you get up
after you've been hit?
Because everybody has been hit and no one,
I don't think has ever
had a straight line career
or life that just goes
up and to the right.
we've all had very difficult times
and it really is how do
people respond to that?
How do they get up, how
do they think about that
and what lessons can they impart?
- I know that you mentor people
and people always want advice from you.
Because you are considered
a values-driven leader.
You know you've got your podcast,
you're highly regarded as a person
What advice would you give
to people as they face now
this world that seems
more uncertain than ever?
What are the next steps I need to take?
- Yes, I was just talking to my daughter
about this yesterday
and what I told her is,
I said, "Molly, don't worry
so much about your next step.
"Because whatever it is,
it's just the next step
And people always think that
next step is so monumental
and momentous and like you know,
the truth of the matter is
you know, what's that saying?
You know, man plans and God
laughs or something like that
and it's just sort of like,
take a step and learn from it.
But what did you like about it,
what didn't you like about it?
What went right, what went
wrong and then that next step
you build on what that was and so to me,
I think that's a really important part
of not being paralyzed in life.
Just know that next step,
even if it's a bad one,
you'll correct it going forward
and if it's a great one,
I think we just need to
keep moving, keep adjusting,
keep learning all the time and
I think the best way to learn
One of my favorite quotes
from my dad was you know,
something like "You're born
with two ears and one mouth
"and you should use them proportionately."
- And take a step at a time.
Thank you so much Dan, it's
been such a great pleasure
to have you and listen
to your thoughts today.
- Thank you so much for having me.
It was my pleasure as well.
Next time on "The Inflection Point"
I'll chat with the
President of Swarthmore,
- I like to say that the liberal arts
teaches us to contribute
to the common good.
- We have certain persistent problems
that we have not yet been able to address
- How do you feel about the future
through the eyes of the next generation?
- It is their responsibility
to step up to the challenges
I was almost moved to
tears to hear the men say
this was the most rewarding
academic experience
they had had in their entire lives.