PayPal CEO, South County resident Schulman talks about tragedy that propelled him
LEE — At a picnic table in the empty Lucky's Ice Cream parking lot, I mentally review the questions I'll ask one of the most successful businesspeople I've ever interviewed. I consider asking him about the old bootstraps myth of starting in the mailroom and working your way up to CEO. That might be too cheeky.
But it turns out the legend is true: You can start at the bottom rung and wind up the CEO of PayPal with a net worth of more than $140 million — that's what Dan Schulman did.
It also turns out that Lucky's doesn't open until 2 p.m. on this Tuesday and it's noontime.
I dial Schulman's cell and suggest we meet instead at Joe's Diner, the only eatery I can see from the parking lot. I've always meant to stop at Joe's, a setting reminiscent of Norman Rockwell's "The Runaway" (a portrait of a kindly police officer sitting at a luncheonette counter next to a boy with a red handkerchief bindle). Schulman, 61, says he's game and has had a visit to Joe's on his mind for a while, too. Schulman has lived in Berkshire County with his family — wife, Jennie Kassanoff and children Molly, 25, and Jake, 24 — for nearly two decades. Born in Newark, N.J., Schulman was introduced to the Berkshires as a boy when his father was a camp counselor in Otis.
Joe's is every bit as nostalgic and quaint as a Rockwell fan would hope. The 1950s decor is clean, neat and hasn't been updated in years. Affirmative signs are hung around the counter — "Welcome friends!" and "Stupid mistakes are made by others; we only make unavoidable errors" — alongside photos of employees and diners, past and present.
The menu includes Americana staples like pie and roasted pork. Tanglewood musicians eat at a tall table while men in neon yellow, landscaper's T-shirts dine in a booth. I love it, but a quick worry passes by: Perhaps Joe's isn't up to the standards of a millionaire.
Schulman enters the diner wearing a green/gray T-shirt and jeans. He has curly chestnut hair and an athletic build. He smiles as his brown eyes search the scene and he shakes my hand.
"This place is great," he says as we sit in the tall table by the Center Street-facing window.
Joe's serves ice cream, but it's lunchtime and I'm feeling the need for something heftier than a cold dish of sweet cream. Schulman is happy not to indulge in ice cream — he normally wouldn't, he says, noting that he's committed to healthy living and trains in martial arts daily. But he was willing to make an acception for The Eagle's "Ice Cream With " feature. I order "totchoes" (nacho toppings and chili layered over tater tots) with a seltzer and Schulman gets a lemonade. The totchoes are magnificent: crispy and spicy with a meaty, smoky chili finish. The aroma is too tempting; Schulman and I wind up splitting the app.
We talk about what Schulman wanted to be when he grew up (a fireman or a cowboy), as well as his early jobs, such as lifeguard, busboy, sales associate. I ask Schulman about his rise to the top of a Fortune 500 company: When do you feel like your career began to take off? Do you remember if there was a moment or time when things seemed to shift and you were really on your way up?
Schulman looks down at the table. It's kind of a sad story, he says, do you really want to hear it?
After graduating from Middlebury College in 1980 with a bachelor's degree, Schulman took a year to backpack across Europe with $120 in his pocket. Following that he started his career at the New Jersey Bell Telephone Company/AT&T in the sales department as an assistant to the sales team.
"It was the lowest level possible to be in the Bell system," Schulman says. He still has a photo of his first paycheck from Bell. He was paid biweekly and earned $208.31.
Schulman, who also has an MBA from New York University's Leonard N. Stern School of Business, says he was focused and worked hard at Bell, progressing through the ranks of salespersons and management. He was a district manager when tragedy struck his family in 1986: Schulman's 19-year-old sister died suddenly from a brain aneurysm.
Schulman retreated from work while he grappled with despair. It took him months before he was able to return.
When he got back to the office, Schulman learned that his team had run smoothly and had been successful while he was away. Before his sister's death, Schulman says he would have gone to his bosses and taken credit for his team's work, but after, he had a new perspective on life.
"Before that, I hate to say it, I would have taken credit for everything. That gets you ahead," Schulman says. "But I couldn't take credit and I felt grateful to my team."
It was a turning point. Schulman's career accelerated. Instead of being seen as unnecessary to the company, his value increased as engineers and other employees sought to work with Schulman. This was also around the time "Ma Bell," a subsidary of AT&T, split into smaller companies as part of an anti-trust settlement with the Justice Department. Schulman stayed with AT&T instead of working in one of seven regional "Baby Bells."
"It was a straight line up after that because now I was known as someone that wasn't going to take credit for what you do, I'll give you the credit," he says. "People wanted to work for that."
Schulman had been with AT&T for 15 years when he first heard the future calling — and it wasn't from a landline. It was the mid-1990s and cell phone technology was beginning to enter the market. This was going to be the death of long-distance calling service, Schulman says, and he didn't want to be in a shrinking business. Schulman switched to running AT&T's e-commerce division, which at the time had 150 employees and a $10 million budget. It was too small an investment in future technology and much to his father's chagrin, Schulman quit AT&T. He was 39.
"My father thought I would never match that" he says, "but one thing led to another. I put one foot in front of the other."
Schulman went on to be CEO of Priceline.com, the discount travel and lodging website that had William Shatner as a longtime spokesman. The web was the Wild West then, Schulman says. It was a small community of people investing and working on the technology and flying by the seat of their pants.
During this time, Schulman met business magnate and founder of Virgin divisions Richard Branson. They hit it off and Schulman became CEO of Virgin Mobile USA.
"We were close friends and I learned a lot from him," Schulman says. "He's an incredible entrepreneur and a deeply caring person."
When Virgin Mobile USA was sold to Sprint in 2009, Schulman decided to make a career change: he was going to run a campaign to represent New Jersey in the U.S. Senate. He went to American Express CEO Ken Chenault to seek his support, but wound up instead going to work for the credit card company. Schulman could make more of an impact as a business leader than a politician, Chenault said.
"It took him six months to convince me," Schulman recalls.
Thirteen years after acquiring it, eBay spun off PayPal in 2015 and the new owners went searching for Schulman to be its CEO.
In the Berkshires, Schulman and John Donahoe, who at the time was the CEO of eBay and is now chairman of PayPal's Board of Directors, took a walk through the woods. At the end of the walk, Donahoe asked Schulman to lead PayPal.
Schulman says he was excited to join PayPal because of its wide reach to all kinds of people across the globe. PayPal was developed in 1998 by its founders: Max Levchin, Elon Musk, Peter Thiel, Luke Nosek and Ken Howery, when online banking and money transfer services Confinity and X.com merged. In 2000 PayPal made a deal with eBay to facilitate money transfers between the online auction house's users. eBay acquired PayPal in 2002, but sold it in 2015.
Today, Schulman is particularly proud of PayPal's loan program. It's one of the top five capital lenders to small businesses in the country, Schulman says. In May, the company announced that, to date, PayPal has loaned $10 billion to small businesses since 2013.
The way Schulman describes it, PayPal's lending sounds like advocacy banking: The services are targeted at people in so-called "banking deserts," those with the least access to banks and financing. When considering whether to award a loan, PayPal's lending division investigates a person's history with PayPal and not necessarily their credit scores from monitors like FICO.
Most of PayPal's loans are made to low-income earners, people of color and women, Schulman says. In 70 percent of PayPal capital loan situations, the recipient's business sales increase by 22 percent, he says.
As a digital platform, PayPal does business where traditional banks can't, and with fewer bricks and mortar, fees can be reduced on services such as checking and money transfers. PayPal could be a truly mobile banker extending financial system access to people who have been shut out due to poverty, bias, geography or credit history.
"If we can take advantage of advanced technology and mobile phone software, we should be able to do these transactions at a fraction of the traditional cost.
"It's a really powerful example of what PayPal can do," he says.
With a few totchoes still on our plate and Schulman's lemonade down to ice, I ask for advice on how someone could have a career like his. There's no substitute for hard work, he says. Luck plays a big role in success, but a person needs to be prepared for when fortune comes his way.
"I hope people don't have to have a tragedy to appreciate how much they can do every day," Schulman says. "Even if you can't do all the things you aspire to, that shouldn't stop us from doing what we can do."
Kristin Palpini can be reached at firstname.lastname@example.org, @kristinpalpini on Twitter.
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