Scott Thompson, former President and CEO of PayPal, was an influential business leader who demonstrated an impressive ability to drive operational efficiency and effective growth while at PayPal helm. During his tenure at PayPal, Thompson was able to maintain a profitable business in an increasingly competitive market by focusing on developing sound strategies and processes. He was able to drive profitability through increasing revenue growth and efficiency, making more of PayPal’s investments, and encouraging PayPal's employees to think strategically.
Thompson was a strong believer in “The Rule of Three”— the idea that a company often has three main paths to success—efficiency, innovation and customer service. Thompson believed that merchant sales, customer acquisition and merchant services served as the three pillars of PayPal’s success. This idea was foundational to the operational efficiency and growth that Thompson fostered during his tenure.
One way Thompson worked to promote operational efficiency and growth, was by introducing and improving PayPal’s fraud surveillance technology, known as Verisign. Verisign allowed PayPal to provide faster, more secure protection to customers while still maintaining their competitive edge amongst their competitors in the online payment industry. Thompson also introduced policies and practices that resulted in improved customer satisfaction, such as improved customer communications, simplified account migrations and faster refunds. Thompson and his team also recognized the need to increase PayPal’s presence internationally, and launched innovative global expansion strategies, including partnerships with Japanese and Chinese companies.
Thompson also encouraged the PayPal team to think strategically and to focus on strategic investments. He encouraged the team to invest in new products and services, so as to differentiate itself in the marketplace. He explored ways to leverage data, specifically through the use of analytics, in order to make better informed decisions and increase customer engagement. Additionally, he emphasized the importance of having an agile organizational structure, so as to better respond to market changes.
In addition to driving efficiency, Thompson also focused on developing strategies for entrepreneurial growth. He and his team worked together to innovate and develop a range of convenient and exciting products, such as PayPal Here, a mobile application that allows merchants to accept credit cards and process payments quickly and securely. The TPP (People-to-People Payments) platform is another example of the products and services that Thompson introduced, which enabled users to make transactions to friends, family and businesses. These added capabilities enabled PayPal not only to differentiate itself from its rivals, but also to increase its revenue sources, while at the same time expanding its customer base.
Above all, Thompson was an advocate for data-driven decision making. He drove the company with well-researched strategies and insights informed by data, analytics and research. This enabled him and the team to identify trends and insights that could be used to develop methods of increasing revenue and growth. Thompson also adopted a “test-and-learn” mindset, which allowed the team to experiment, measure, and iterate on ideas quickly, making PayPal a much more agile organization.
The results of Thompson’s commitment to operational efficiency and growth initiatives were evident in the company’s success. During his time at PayPal, the company experienced 16 consecutive quarters of double-digit revenue growth, and a 38% increase in profits, making it a much more profitable entity. Moreover, the company’s market share rose from 38% to 54%, making PayPal the largest online payment processor in the world. Thompson’s focus on efficiency, innovation and customer service positioned PayPal as a leader in the industry, significantly boosting its market share and top and bottom line profits, ultimately returning value to investors.
In summary, as PayPal’s President and CEO, Scott Thompson demonstrated an impressive ability to drive operational efficiency and effective growth. His focus on data-driven strategies, agile organizational structure, and strategic investments, enabled PayPal to increase profitability and expand its customer base. By leveraging innovation and customer service, Thompson was able to create a competitive edge in the market, ultimately resulting in double digit growth, increased profits and a larger market-share. Through his commitment to efficiency and growth, Thompson made PayPal a much more successful company, returning dividends to investors and enhancing customer satisfaction.
