Vish Shastry

I lead product @wearehims. Built fintech platforms including Uber, PayPal, Visa, E*TRADE and Visa’s dev & payment platforms. ATL Braves fan. Views are my own.

[David Marcus @davidmarcus]

A few thoughts about PayPal, nearly 12 years after I left.

I woke up this morning to dozens of messages from former PayPal colleagues. It pushed me to finally speak up.

I never spoke publicly about the company after I left. Part of that was loyalty to John Donahoe, who gave me an unlikely opportunity, handing the reins of PayPal to a startup guy who, on paper, had no business running a then 15,000-person organization. But part of it was something else: I had left. I chose not to stay and fight for the changes I believed in. Speaking from the sidelines felt like armchair commentary. Easy opinions without the burden of execution. So I stayed quiet.

But twelve years of silence is long enough. And today's news makes it clear the pattern I've watched unfold isn't self-correcting.

I left PayPal in 2014 because I was deeply frustrated. We had executed a silent turnaround of a company that had lost its soul. We brought back engineering talent, shipped good products quickly, and acquired Braintree and Venmo. The company was on a tear. So much so that Carl Icahn felt compelled to accumulate a position in eBay and push for a PayPal spinoff. At the time, eBay decided to fight Icahn.

It was a difficult period for me, caught between what I felt was right for PayPal and my loyalty to the eBay team.

This is when Mark Zuckerberg approached me to join Facebook. The combination of his conviction that messaging would become foundational, the appeal of going back to building products at scale, and my growing exhaustion with the internal politics at PayPal and eBay eventually convinced me to leave and join one of the best teams in the world, one I had admired for a long time.

In the summer of 2014, I met John in a café in Portola Valley and told him I had decided to leave. During that conversation, he told me that Icahn had effectively won the fight, that PayPal was going to become an independent company, and he tried to convince me to stay on as CEO, but I had already said yes to Mark, and my word is my bond. There was no turning back.

After my departure, the board scrambled to find a replacement, and it took a few months for them to land on Dan Schulman. The leadership style shifted from product-led to financially-led. Over time, product conviction gave way to financial optimization.

Much of the momentum we had created still persisted and carried the company forward, mainly driven by Bill Ready, who came over in the Braintree acquisition and rose to COO. Under his leadership, Venmo grew exponentially, and total payment volume (TPV) accelerated quickly. But the shift under Schulman became more pronounced after Bill's departure at the end of 2019. With him went the product conviction that had defined the post-spinoff momentum. Then, for a period, COVID-fueled online shopping hid a lot of the company's new weaknesses.

During that period, the company made a fundamental miscalculation: it optimized for payment volume instead of margin and differentiation. It leaned into unbranded checkout, where PayPal had the least leverage, instead of branded checkout, where the margin, data, and customer relationship actually lived.

Visa masterfully structured a deal that effectively ended PayPal's ability to steer customers toward bank-funded transactions, which had been a core driver of PayPal's economics. Not long after, PayPal lost a significant portion of eBay's volume. Over time, it saw its share of checkout among its most profitable customers steadily erode as Apple Pay and others continued to execute well.

The same pattern repeated itself across lending, buy-now-pay-later (BNPL), and new rails.

On lending, PayPal missed the opportunity to turn it into a platform weapon. Products like Working Capital were conservative, short-duration, and optimized for loss minimization. Lending never became programmable, never became identity-driven, and never became a reason for merchants or consumers to choose PayPal over something else.

The missed opportunity in BNPL was even more striking. Klarna, Affirm, and Afterpay didn't just offer installment payments, they built consumer finance brands, persistent credit identities, and new shopping behaviors. PayPal saw the BNPL turn, entered the market, and had every advantage: distribution, trust, and merchant relationships. But BNPL was treated as a defensive checkout feature rather than an offensive category. There was no attempt to turn it into a core consumer relationship, no super-app behavior, and no meaningful differentiation for merchants. Others built platforms, PayPal added a feature.

The failure to lean into building and owning new rails followed the same logic. After the spinoff, PayPal had a once-in-a-generation opportunity to build a global, at scale payment network. Instead, the company focused on building on top of existing networks and third-party rails.

More recently, that mindset carried over to PYUSD. Technically, the product was sound. Strategically, it launched without a compelling transactional reason to exist. PYUSD had distribution, but no organic demand. It was not embedded deeply enough into flows to become a true settlement layer, a cross-border merchant rail, or a programmable money primitive. It sat adjacent to the product instead of inside the core of it.

Acquisitions during this period followed a similar pattern. Honey was not a strategic acquisition for PayPal. It added activity, but not leverage. It lived outside the transaction, monetized affiliate economics rather than payment economics, and never meaningfully strengthened PayPal's control of the customer or the checkout moment. Xoom solved a real problem in remittances, but it never compounded PayPal's advantage. It scaled volume without changing the underlying rails, identity graph, or settlement model, and as importantly, it didn’t cater to a high-value, high-margin customer archetype.

None of these were bad companies. They were just a wrong fit for PayPal and became unnecessary distractions.

The board eventually recognized the problem. In 2023, they brought in Alex Chriss, an Intuit veteran with a strong product background, explicitly to restore product conviction. It was the right instinct.

But Alex came from software, not payments. He understood SMB product development. He didn't have the muscle memory for transaction economics, network effects, or settlement infrastructure.

In hindsight, he also made an error: clearing out much of the leadership team that understood payments deeply. Executives with years of institutional knowledge departed within his first year.

This morning, Alex was removed as CEO. Branded checkout grew 1% last quarter. The board tapped another operator, Enrique Lores, the former HP CEO who's been on the PayPal board for five years.

I don’t know Enrique. And he might be a great leader, but on paper at least, he’s a hardware executive. For a payments company.

The common thread through all of this is incentive design. Once PayPal became independent, short/medium-term predictability beat long-term vision and ambition. Stock performance mattered more than platform risk and network opportunity. Financial optimization replaced product conviction.

I'm not claiming I would have made every call differently. Running a public company at scale involves tradeoffs I didn't have to make after I left. But the pattern, choosing predictability over platform risk, again and again, was a choice, not an inevitability.

Over time, the company that had every advantage and could’ve become the most consequential and relevant payments company of our time, lost its mojo, its product edge, and its ability to compete in a market that’s being rewired and reinvented in front of our eyes.

That's the part that's hardest to watch for a company I care so deeply about.

[Shams Charania @ShamsCharania]

Charlotte Hornets assistant Chris Jent is finalizing a deal to become the associate head coach of the New York Knicks under Mike Brown, sources tell ESPN. New York and Tyler Glass of CSE Talent negotiated terms for Jent, who returns to Knicks where he spent 1996-97 as a player.

[Vish Shastry @vishshastry]

@noyesclt They’re tolerant. Merchants often offer either point in time incentives for payment methods (e.g. get $10 back when you pay with Venmo) or evergreen incentives (e.g. 5% back for Target PLCC)

[Quiver Quantitative @QuiverQuant]

One stock that could benefit from a trade war between the US and China:

[Shams Charania @ShamsCharania]

Injury blow to Denver: Nuggets F Aaron Gordon will miss multiple weeks due to a right calf strain, sources tell ESPN.

[Quiver Quantitative @QuiverQuant]

Corporations spend hundreds of millions of dollars on election donations.

They often donate to both sides, buying political favor.

We've been writing code to collect data on this.

Here are some of the companies who have spent the most so far in the 2024 election cycle:

[Quiver Quantitative @QuiverQuant]

This is wild.

In October, we published a report on a suspicious purchase of Raytheon stock by Senator Markwayne Mullin.

He is a member of the Senate Armed Services Committee, which oversees the Department of Defense.

The stock has now risen 73% since then.

Look at this graph:

[Vish Shastry @vishshastry]

@noyesclt You'll see more merchants than you think adopting it, but mainly for negotiating leverage or fraud / chargeback rules. Consumers aren't likely to use it unless the experience standardizes across banks and improves significantly.

[Vish Shastry @vishshastry]

@shreyas We’re hiring for PM team leaders @wearehims - fully remote in North America. Join the 🚀🚀🚀 as we make people happier and healthier!

[Vish Shastry @vishshastry]

Saddened by a conversation I had with a new immigrant to the US today. He asked if he should be concerned for his child’s safety when going to school, how common school shootings were, and if private schools were safer than public schools. Heartbreaking first American experience

[Vish Shastry @vishshastry]

Saw this chart from @pkedrosky today - no better example of “your margin is my opportunity” with MSFT bundling Teams in enterprise deals. Still a bit misleading - we use Teams primarily for video so Zoom might be better comp

[Vish Shastry @vishshastry]

@iankar_ Not surprised bad marketing strategies are getting crushed. What strategies do you think are working well?

[Vish Shastry @vishshastry]

@will_lawrenceTO Payments is also a scale game - have to scale to millions of txns or you can’t make business cases work. Better make sure growth plan is part of pre mortem!

[Vish Shastry @vishshastry]

@will_lawrenceTO Great insights. Post launch activities are somewhat different as well. Bugs are harder to pin down - cause might be you or downstream processor / issuer. High quality ops & live support + root cause / AARs are critical

[Vish Shastry @vishshastry]

Man, the Lakers really won both the last season and this free agency ‘season’ - lots of savvy moves on paper. Kudos to Rob Pelinka ...

[Adrian Wojnarowski @wojespn]

Marc Gasol is finalizing a deal to sign with the Lakers, sources tell me and @ZachLowe_NBA.

[Lyman Stone 石來民 🦬🦬🦬 @lymanstoneky]

China's economic growth in recent years has been lower, compared to its income, than Taiwan, Japan, or Korea's was when they were at the same economic level.

[Vish Shastry @vishshastry]

Having masked and socially distanced fans in an outdoor venue has to be one of the lower risk and easiest to manage events in this pandemic

[Vish Shastry @vishshastry]

Embarrassing how anti science and ill prepared Santa Clara & Mtn View school officials are. Instead of mitigating & managing risk, it’s all risk avoidance, causing harm to working families and kids. NYC kids are back in school & healthy - why not ours? https://t.co/gcZL6y5k9T

[Vish Shastry @vishshastry]

Mfw I turn on the game to see LA hit a grand slam to go up 11 on the Braves in the first

[Vish Shastry @vishshastry]

That 9th inning rally by the @Braves was fun - @austinriley1308 kicking it off, @ronaldacunajr24 & Ozuna getting on, and another HR from @ozzie (caught by @Mark_Melancon_ no less!). They look loose and hungry! Go Braves!