Social Activism at Work with Dan Schulman Ep1 | The Inflection Point | Salesforce

Dan Shulman 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. 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. This is unacceptable. 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 Shulman 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, when everything changed?

The moment that sticks out in my mind quite vividly.

And it's a tragic moment, but I think we all share that. We've all gone through tragedy in our lives. It was my. My younger sister died early from an aneurysm. 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. Like, that's how I defined it. And, you know, post her dying, I just became much more aware that every moment is a really important moment and.

That.

Recognizing 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, but she taught me an amazing lesson, and that probably was the most important inflection point in my life, for sure.

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 and in the position of leadership that you are in as the CEO of PayPal. 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. He was worried that I'd be the youngest person to ever have their picture in an FBI file. 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.

Oh, wow.

And my dad decided that he had to fly down to Mississippi and reverse that, confront the plant manager, who is 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? Seems so dangerous. And he said, we're defined by not what we say, but what we do. 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 it 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 to that kind of service.

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. And I did this twice. Once when I was the CEO of Virgin Mobile and we were supporting homeless youth, and we were working with an organization called Stand up 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 what that's like and the empathy that that gave me experiencing firsthand, it was only for 24 hours. It was like, not something heroic by any means, but learning firsthand what it meant to be invisible on the streets, what it meant to feel unsafe when you were trying to figure out where to sleep on the streets. 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. 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 a cash check 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 and how problematic it really is. And so once everybody went through that, then the products and services we were designing to help that it was done with not just, you know, it's done with a passion around doing the right thing for those populations that were struggling to get by.

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, 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. One of the key values we have is embracing diversity and embracing inclusion. 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 going to 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.

Oh, I'm sure you did. I mean, I was at the Wall Street Journal at the time and covering this, and it was quite the controversy. 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, where our employees knew that we would stand up for our values.

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 a 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 like, kind of earth shattering to you when you found closer to home, inside your own company, you 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, to tell you the truth. 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 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 had to measure this. And so we created a metric. We called it Net Disposable Income ndi. We work with academia, we work 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 aspire to other things, you need to target an NDI of 20%, which is five times what they were earning. Here we are a couple of years later. We slashed health care costs by 60%. We increased wages. We gave every single person in the company equity in PayPal so they can 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 might aspire to go do so. And if we do that better than anybody else, then over the medium and long term, we will maximize the return that we can give to shareholders.

Let me stop you for a sec, though. Doing all these things, lowering the cost of health care, 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 and any company can maximize profits next quarter. I am trying to build something that over the medium term, over the long term, is something that we could never hope to build if we weren't making those investments. I think 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 have paid off.

Well, that's for sure. When the pandemic hit, I mean, everybody was online all the time. And I have to say, my use of PayPal personally went up. And 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 because everybody's working from home. Our volumes skyrocketed. 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. 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 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 not, you know, is paying off. And so using that as a track record, then you now are trying to tell other CEOs, get in line, people, we need to be paying our employees a living wage. But how is that going?

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 want to 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. Like, 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 do that.

Do you think it is going to become the norm in capitalism now, stakeholder capitalism or not?

I think everyone is served better, honestly, and our companies are served better. Our political systems, like, if people don't have a modicum of financial help, how can we? And they think the system is working against them. How can we expect them to rise above their own self interest and 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, it needs to be more than two wolves and one sheep voting on what to have for dinner.

Now we've got to 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 knew 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.

It's funny you mentioned that you didn't know as part of PayPal. 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'm so happy to tell them.

No, no, that same company, you know, Venmo has experienced explosive growth over the last five years. You know, it's simple and easy and 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 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. I think you maybe still do this every day. This martial art of Krav Maga. Did I mispronounce it?

Nope, you did 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.

I couldn't do it.

You could do it. You would be very good at it. 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. And 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. And also the philosophy of knowing that if you're in a fight, the surest way to get hit is to stand still and to face off. You always have to move. And so there's 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 for so many years.

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. How, how do you get up after you've been hit? Because everybody's 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 tragedies, 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 and as a professional. 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, said, molly, don't worry so much about your next step, because whatever it is, it's just the next step on a long journey. And people always think that next step is so monumental and momentous and like, you know, the truth of the matter is, you know, when what's that saying, like, man plans and God laughs or something like that. And it's just sort of like, take a step and learn from it. Like, 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. Like, 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, you'll build on it. I think we just need to keep moving, keep adjusting, keep learning all the time. And I think the best way to.

Learn is to listen a lot. One of my favorite quotes from my dad was something like, you're born with two ears and one mouth, and you.

Should use them proportionately and take a.

Step at a time. Yep. Never stand still. Thank you so much, Dan. It's been such a great pleasure to have you and listen to your thoughts today. Thank you.

Thank you so much for having me. It was my pleasure as well.

Next time on the Inflection Point, I'll chat with president of Swarthmore, Dr. Valerie Smith.

I like to say that the liberal arts teaches us to contribute to the common good.

Have we made progress?

We have certain persistent problems that we have not yet been able to address and solve as a nation.

How do you feel about the future through the eyes of the next generation?

It is their responsibility to step up to the challenges of the moment. 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.