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Igniting Creativity and Leveraging Failure with Michael Todasco of Paypal

“Storytelling is so critical to the leadership process that we need to understand how it works at a high level, a corporate level, and a lower level, as well for any individual team. Within the innovation lab, everything starts with story.” -Michael Todasco, Senior Director of Innovation at PayPal

Why do stories matter to the innovation process? What values can be instilled in innovators who share stories? How do innovation leaders inspire creators to tell and share their success and failure stories?

Senior Director of Innovation at Paypal, Michael Todasco, joins us to share how inclusion in innovation can increase the creativity of employees and transform the innovation process within a company. He believes that when it comes to seeing an idea to fruition, storytelling is essential at every stage. To him, Charity Water’s promotional video, The Spring, is a moving example of the power of story.

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Mike Todasco is the Senior Director of Innovation at PayPal responsible for increasing the creative output of employees across the company. Teams in the Innovation Lab are building experiences in AR (Augmented Reality), Blockchain, and Robotics. Prior to that Mike spent time at PayPal in Product Management, Product Marketing, Product Launch and Product Analytics roles. Before joining PayPal he was the Founder and CEO of the eCommerce marketplace, Sketch Maven. Additionally, Mike spent over four years as the Director of Strategy, heading up mergers & acquisitions and strategic planning at NewPage, a portfolio company of the private equity firm, Cerberus Capital.

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TRANSCRIPT

This episode is powered by Untold Content’s innovation storytelling training. Increase buy in for your best ideas in this immersive and interactive, story-driven experience. Where your teams refine storytelling techniques for their latest projects, prototypes and pitches—and get inspired by 25 epic examples of impactful innovation stories. Learn more at untoldcontent.com/innovationstorytellingtraining.

Katie [00:00:00] Our guest today is Mike Todasco, the senior director of innovation at PayPal, and he is responsible for increasing the creative output of employees across the entire company. Mike, I’m so grateful to have you on the podcast today.

Mike [00:00:13] Hey, Katie. Thanks for having me.

Katie [00:00:14] So tell me a little bit about your personal story of innovation and what led you to PayPal.

Mike [00:00:20] Oh, boy, my personal story of innovation, like probably with most people in this line, it starts when you’re a little kid. When you’re a little kid, you are innovating, you’re building staff, you’re making connections that adults wouldn’t otherwise see or anything like that. And this wasn’t anything unique to me. This is something that we all have. And, you know, just I think sometimes maybe later in life we need to re-embrace that inner child that we each have in each and every one of us.

Katie [00:00:47] I love that. Can you paint a picture for us of a couple of moments that, sort of, you remember from childhood where you thought, gosh, I really love invention?

Mike [00:00:58] Wow. Yeah. I mean, look, my parents probably when I was 10 years old, got a Sony video camera. This was like a Super 8 movie camera.

Katie [00:01:13] Yeah.

Mike [00:01:13] And they got it for whatever traveling and things like that or whatever you did with a movie camera back in the 1980s. But like I took this thing because I’m like, this was amazing. And I got all my friends and we made movies and we did talk shows in our garage and we did all of these kinds of things. And like, I did this for years.

Katie [00:01:35] I love it.

Mike [00:01:36] This was back in the day where, like, I was like literally editing between math and I had multiple VCRs hooked up. You know. I wasn’t splicing tapes. I’m still envious of kids nowadays with all their smartphones and like, my gosh, they could just edit these things digitally. But—and I sound like an old man when I’m saying that. I guess I am. But like that was one of my first experiences of really just creating something from nothing and building a narrative around it and having so much fun doing it. That was one of my most fun things that I ever got to do when I was a kid.

Katie [00:02:12] So deep down, do you sort of wish that you were a YouTuber?

Mike [00:02:16] Yeah. Oh, my gosh. Yeah. Don’t we all? Like we all want to be influencers, don’t we? I mean, I was reading something where I think with the Gen Z folks, like that is like the number one job that most people in Gen Z want is to be an influencer, which of course like wasn’t even necessarily a concept back when I was growing up. But like, yeah, there’s something—and I love that. I do actually watch a lot of YouTube myself. And I love the concept of somebody just being able to pick up the camera who has a unique story and be able to tell it. I mean, that’s the beautiful thing about YouTube, is the amount of knowledge that is being passed across geographical boundaries and all this kind of stuff like it is immense. When I want to go deep into something like YouTube, candidly, is the first place I turn to learn more about it.

Katie [00:03:07] You know, I don’t disagree. You know, everything from—especially, I think, when it comes to issues like parenting or even politics. It’s really interesting to sort of dive into people’s personal—like things that they might not reveal about their everyday lives. Even with your closest friends, sometimes it’s hard to sort of break down that barrier. But sometimes people can be quite candid to strangers. And it’s helpful.

Mike [00:03:33] People are candid. And the other thing that’s amazing is just the long tail of it. Like I remember I was changing something on my car. And it’s like a 2011 Nissan. And this was a little while ago. Literally, I pull up YouTube and there is like the exact same car. There’s a video for the exact same part that I wanted to change. And I mean, that’s the beauty of it. The long tail, like almost anything you imagine almost any problem that you are having, someone else has had it. And you have this extremely shareable format where people can kind of put that up and maybe it’s not polished, but it still was able to save me a whole bunch of time from figuring some things out because someone else who had that problem wanted to share that with others.

Michael Todasco Quote

Katie [00:04:20] I fixed my insinkerator, like my garbage disposal in my sink, by myself. And I swear, thanks to YouTube, and I did a little dance about it and I called my mom. I was very proud of this moment. But that’s neither here nor there.

Mike [00:04:34] Fixing an insinkerator is not an easy thing. So no, you should have done a little dance.

Katie [00:04:37] It’s kind of intimidating.

Mike [00:04:38] Yeah, absolutely.

Katie [00:04:39] So fast forward a bit. You got your B.S. in finance from University of Illinois and you went to Cal Berkeley School of Business for your MBA and you founded Sketch Maven.

Mike [00:04:51] Yeah. So even to take a step before, like the great thing about like being in innovation and all that. Like there is no like role that defines what you’re going to do. I mean I started off my career as an accountant. I mean, basically, I had a green visor and everything, like I was a stereotypical accountant in my career. I moved to do some environmental strategy stuff, some private equity. And then, yeah, I went to Berkeley, did an MBA there. And the first thing I did, as most people do when they’re done getting their MBA. They decide they’re going to create a comic book business. And that is, of course, what I did. And no like this came from my childhood. To be clear, like so I was very much—I grew up in the 80s and 90s when sports cards and like comic books and collectibles and like that were in this crazy boom.

Katie [00:05:47] I remember those days.

Mike [00:05:49] And like, oh, yeah, and it was amazing. I like didn’t know how lucky I was to be growing up at that time, but I was like 14 years old and I was making a lot of money in this and I didn’t know—I thought I was brilliant. Little did I know that this was just a bubble, and any fool could have been making money for a while until the bubble pops and then all the money goes away. But it was still really cool to be part of that. And I learned a lot about business. I was doing conventions and things like this. I was selling and, you know—

Katie [00:06:20] As a teenager?

Mike [00:06:20] Pretty much paid my weight. As a teenager. Yeah. I mean, that’s pretty much how I mean, this was—this would have been before eBay and before even Yahoo! Auctions, which, believe it or not, was actually a thing back in the mid 90s. So it was before all of that, like, yeah, I was selling at conventions as a teenager. I knew a lot about comic books specifically. And I always had this one memory of being a kid, going to a convention and seeing an artist that I really liked there. So at a comic book convention, there often the artists who make the comic books themselves that are there. And I remember seeing this one piece of artwork that was the cover of a book I loved. So what happens in cover in comic books? Like literally the artists will draw the page, they’ll draw whatever. And then that gets mass produced. But there is only one of that original piece of artwork that exists. I remember seeing it as a kid and it was like, I don’t know, a couple hundred dollars. Fast forward. I’m adult. I have some money. For whatever reason that occurs to me. I’m like, I want to buy that page, you know? And so I go on eBay, not there. I go on all these other sites, I go on some forums, all this other kind of stuff. And I came to the realization that like for certain collectibles, especially collectibles, like original comic book artwork, when there is only one of something that exists in the world, it is really hard to find that thing. You know, if you want to find the Mona Lisa. Yes, everybody knows where that is at. But for things where there are millions and tens of millions of certain collectibles, but there’s only one of each. That’s really tough. And so that’s what Sketch Maven was. I was scratching my own itch. It was building an online marketplace for original comic book artwork with the goal to expand into other unique collectibles that were underserved by eBay. Like, I mean, I had everything from shoes to all this other stuff on my product roadmap, which, you know, shoes weren’t as big of a thing in 2009 as obviously they are now. But there was a lot of underserved niche markets that I could build a model for. And so that was kind of the vision for Sketch Maven.

Katie [00:08:35] So how did you get original buy-in for a Sketch Maven? Did you seek funding at the time? Did you self-fund? How did that process of sort of getting energy behind and support for the idea? How did that emerge?

Mike [00:08:51] It was a ground game. Honestly. Like and look, to be clear, like Sketch Maven never took off. And I had a bunch of successes and I had a bunch of failures. And dare I say, without that, I would have never made it to PayPal, which I’ll get to in a moment. But, you know, to get that initial buy-in for what I was trying to do, it was really a ground game. So I was actually on the board of the Cartoon Art Museum in San Francisco. So I was able to make connections through there. I was going to conventions. I was emailing people. I was spending just all my time just selling, selling, selling. Trying to—you know—and the hard thing about a two-sided marketplace is you need to be building a market for both the buyers and for the sellers. The sellers are not going to come if they’re not buyers there. The buyers are not going to come if the sellers aren’t there. That’s the hard thing with the two-sided market. But so yeah. I mean so I had a whole bunch of tactics and techniques to do that, brought a whole bunch of quantity of artwork on there. And just started to build this out. The resources I used were actually from a company called oDesk–oDesk is now Upwork. They were kind of a fledgling company at the time. This would’ve been like 2008 when I really started this concept. But I was able to hire some developers from overseas to build this out. And to be abundantly clear, I have never built a website before. So, I didn’t know what I was doing. And it’s sometimes hard to deal with teams on the other side of the world when you don’t know exactly what’s going on. But I learned really quickly. And look, it was an amazing experience. Like I said, I had many wins. I had some good press coverage. I loved seeing things get sold and, you know, all this other kind of stuff. And but, you know, a lot of things didn’t succeed. You know, I remember the first time when the site was being attempted hacked. I was getting targeted, and the site was not as secure, dare I say, as it could have it. This was the days before Stripe and Braintree and all of these other ways that you can more easily process payments on a site. And no credit cards were actually compromised. But like, you know, we were getting hacked all the time, and actually it was my sister in law who told me because I was really down. I’m like I don’t know how to handle this. I’m like, I’m getting hacked. Like literally all this stuff is happening on the website. And her response to me was like, well, at least that means that you have a site that people care about.

Katie [00:11:26] That’s right.

Mike [00:11:27] I was like wow, what a refreshing look at the hack. You know, you’re only going to get hacked if people think that there’s something of value in there. And I never thought of that. Like if I didn’t make anything of value, I would have never had all of these hackers on there. And it was just a very refreshing take.

Katie [00:11:42] Yeah. And you were not at all alone. That was sort of, you know, the speed of innovation in cyber security was not necessarily keeping up with the speed of innovation in technology. And so, you know.

Mike [00:11:54] That’s right.

Katie [00:11:55] Everyone was sort of asking that question at that time. And it was a challenging time.

Mike [00:12:00] Absolutely. It was a completely—I mean, this was, you know, a little over 10 years ago. But in technology terms, it was a lifetime ago. Now you have, like I said, companies like Braintree—full disclosure it’s owned by PayPal—and other ways where you can very effectively process payments, not have to worry about anything with that. But there’s even movements. The no code movement. So companies, like Bubble.io and others, that are basically giving the tools where you could actually make really creative websites. But you don’t have to actually be a programmer yourself, which I was not. Again, keep in mind, I was an accountant with a green visor. That was my background and like to recreate something like that today. Like, that’s really exciting to me. The whole no code movement means that you don’t have to have a degree in CS or spend all this time learning how to develop something in JavaScript or whatever it might be. For most basic websites, you can just use these tools and you could build it out in a fraction of the time that it would have taken 10 years ago.

Katie [00:13:10] It’s so true. And it kind of loops back to our original conversation around influencers and how the speed of, you know, being able to get technology to be accessible and then get platforms that can allow for that same accessibility. It’s incredible to see how, I think, overall we see an increase in the level of empowerment at the individual level. People feel more empowered to be able to have a great idea and give it a shot. There are more resources than ever for being able to at least try.

Mike [00:13:42] One hundred percent. I mean, look, what we’re doing is removing the gatekeepers. Back when I was growing up, there was, you know—when I was really young, there was basically just three channels where you could see video content and then there were VCRs and cable and all this other kind of stuff. And now you have—I don’t know the exact number—but millions or tens of millions of hours of content being uploaded to YouTube at any given time. Like it is astronomical. Just the influx of content and what that means for creativity and innovation just around the world. To be able to hear these voices, to see people just build their websites easily. You don’t have a gatekeeper being an engineer to say, well, you’re going to have to pay me $50 an hour to build out this site. Well, no, you can actually make a pretty decent MVP minimum viable product by using, you know, various different no code tools. And see is this a site that’s going to resonate with people?

Katie [00:14:48] You mentioned creativity, and I love that in some of your sort of bios and your personal descriptions, you say you’re responsible for increasing the creative output of PayPal employees across the company. Can you give us some insight into what that looks and feels like?

Mike [00:15:05] Yeah, I just want to empower people to be more of what they want to be. I know that sounds so corny, but work with me here for a second.

Katie [00:15:18] I’m leaning in.

Inno Storytelling Training Ad

Mike [00:15:19] But I really mean that. Look, there is—again, we are all—there’s a Maya Angelou quote of like, you know, we’re all creative until, you know, we’re four or five. And then we have that creativity just knocked out of us. And be it’s because of how our school is structured or parents, basically, you know, how we act. And believe me, I’m a parent as well. I’m sure I act in ways that suppress my kid’s creativity all the time without me even realizing it. Like, you know, we’re taught that. And what I try and do at PayPal here is everything I can to get people to embrace that because we have twenty-five thousand employees at this company. And in those twenty-five thousand brains, there are some brilliant ideas. There are some, you know, our next billion-dollar product is in there. The next thing that we can build that is going to, you know, drastically improve the lives of the next 100 million customers that we’re going to be able to introduce to our platform. It’s in there somewhere. It’s my responsibility and it’s the responsibility of management to tap into that brain trust. And so there’s a lot of different ways we do that. One I will just throw out there is we’ve created this concept of a global innovation tournament. This is something that’s been done at many companies in the past, but as many things, we have our, kind of, unique PayPal twist on things. And we held it last year and we’re going to be holding it again in a few months this year. And the concept was we went to, you know, we had nine senior leaders from around the globe put forth problem statements, things that they were struggling with, things that they wanted. A lot of, you know, ideas. They wanted PayPal brain trust working on. And the ideas in the problem statements ranged from how do we increase our customer acquisition rates, you know, five times what the current level is today to how do we use our products and services to help our customers fight climate change and kind of everything in between. 

Katie [00:17:42] Yeah.

Mike [00:17:42] And so this is a real diverse set of questions and we put it forth to all of our employees around the globe. And it was amazing. Ideas just started flowing in. And it didn’t matter if you’re an engineer or an executive assistant, a designer or a lawyer. Like everyone was on the same platform. All ideas were welcome. Like, it didn’t matter what your background is because we wanted all of these ideas. So we got all of these ideas, you know, and then the very first thing that we had to filter these ideas down is we actually have an internal innovation token, which I could talk about later, within PayPal that all employees have access to. And we let the employees make the first cuts. We effectively said you can invest in these ideas. So it was basically like angel investing. So anybody’s idea, you can invest in that. If that idea wins the tournament, becomes a finalist, you’re going to get a real nice return on investment using these tokens that we have. And then there’s various other stages. We built out the ideas, we actually did an internal podcast interviewing people about the different stages and how to build a business and all of these contests. And it wasn’t only the people submitting ideas. The entire company went along for this journey and it was extremely exciting. It was extremely empowering. And, you know, that’s just one example of how we try to be more inclusive and empower everyone at PayPal to be more innovative. 

Katie [00:19:22] How did you get so much organizational buy-in for this? You know. Did you gather thousands of people together in a room? Did you blast this out during huddles or virtually? How did you sort of spark that?

Mike [00:19:35] This is going back to my Sketch Maven days. There’s a lot of ground game in this. It was starting out. Like because initially, this was just a concept. We had never done this within PayPal. Again, the innovation term and concept existed, but nobody could picture it. Like we had a vision of what we can do and we needed support. So the first thing I did was I reached out to a senior leader who is extremely friendly with the things that we’re doing in innovation. And I said, hey, I could really use your help here. Can you be the first person to, kind of, put your name on this? Give me a problem statement. We’ll work with you directly. Like let me craft it with you. Like, could you kind of be the archetype? He signed up for it. Once he signed up, he had that out there. I went to a senior leader number two. I said, hey, senior leader number one is participating in this. I know you know each other. How about you provide something? All of sudden, senior leader two is on board. Then we’re starting to actually get, you know, build the support there. You know, suddenly we have, you know, nine leaders who are on this. Then we take it to, you know, our CEO and some of our executive staff and say, hey, all these leaders are doing this. Can you sacrifice an hour of your time a couple of months from now? We’re going to have a finale and you could be the judge in the finale of this. And he was on board. So then we got the CEO and all these other people on board. And then you’re starting to get a groundswell. So before we had one idea submitted. We had this whole structure. We were able to get this leadership buy-in. And then once you have all of these people effectively signing off and saying, hey, this is cool, I’m participating. We had them send it out to their orgs. We did a ground game. We reached out to other people and other sites. We have innovation labs all over the world and we just started promoting like crazy.

Katie [00:21:33] I love it.

Mike [00:21:34] And that built this groundswell. And I’m really excited because that was the first year we did this. This year is going to be the second year. So now we actually have a brand for ourselves. Now we have leaders coming to us saying, hey, we want to participate in this. And so it’s completely different. But like. And that’s how you start a movement.

Katie [00:21:50] Absolutely. Tell us about some of the storytelling strategies that you heard among employees, especially the ones that, sort of, earned those early tokens that they needed.

Mike [00:22:01] Yeah. So one of the things we did was for every person submitting an idea, they got more of these tokens. Again, the tokens, and we call them wow within the company, so these wow—every employee just by being an employee you get some. You get more by, you know, submitting ideas in a standard idea portal we have or even doing things like donating to charities, using our internal PayPal gifts platform. All of these are things and many more are ways you earn these tokens. But one of the ways we did it was—

Katie [00:22:32] Oh so these tokens are, sort of, already something that the organization understands and uses.

Mike [00:22:37] Yes.

Katie [00:22:38] I see.

Mike [00:22:38] We launched the token system about six months before we launched the tournament. So there was already that familiarity that people had.

Katie [00:22:46] What is the actual currency of the tokens? Do you exchange it for something? What is the—

Mike [00:22:52] Yeah. Let me say more. So it’s actually—so it’s a blockchain based token system. It’s actually based off—so it’s an interim private blockchain, how we run this within the company to get a little bit technical for folks out there. And what we do is we give you all these ways—like I said, where you earned this. There is a newsfeed just like you would see in Venmo, which is PayPal product, where you would see all the activity in the company. So if you go to this page on our internal website, any employee will see everything that’s going on in the company because you could p2p this to other people for just, you know, doing you a favor. You want to give somebody kudos or whatever it might be. There are many ways to do that. And then finally, you get to redeem these for either swag or cool experiences. So exclusive wow swag that you can’t get anywhere else or experiences which run the gamut from having me wash your car, which is one thing, so. And you can take pictures and post on social media channels. Part of that came from the fact that—

Katie [00:24:01] How many employees have taken advantage of that opportunity?

Mike [00:24:06] Yeah let’s just say too many. Way too many right now.

Katie [00:24:08] Is there a certain hashtag that we can research to see these photos?

Mike [00:24:14] Yeah. The reason behind this is because I don’t ever wash my own car. And this can be kind of gross and disgusting. They’re like, well, how about you wash ours? So I agreed to do that. I even got my daughter involved. She’s six. She’s adorable. So she would actually do drawings for people. She loves to do drawings and things like that. So people will say like, hey, can you do a drawing of X. And she will do her darndest to do that. And it comes in a little frame and all that.

Katie [00:24:40] This is funny. My five-year-old’s favorite—my five-year-old daughter—her favorite thing to do is wash the van. She’s like, can we clean out the—

Mike [00:24:46] Wow.

Katie [00:24:46] If she does something special and I’m like, you get a reward, honey, you did so good at that thing. She’ll say, let’s clean the van.

Mike [00:24:55] I need to give her some of these tokens to do my job of washing cars for other people.

Katie [00:25:00] They can start their own business. It’s going to be great.

Mike [00:25:02] That’s right. And it ranges from that. And it’s frankly a way for our leaders to, like, show a different side of themselves. So my boss, for one, is actually very passionate about tigers and tiger conservation. You can actually do a whole session with him to learn about tigers. And he actually even cares for tigers as part of that. So you could actually do that. You could go to sporting events with people and you can even do Krav Maga, which is basically a type of karate, with our CEO. So we have leaders at all levels of the organization and it’s also mentorship and things like that are in there as well.

Katie [00:25:40] Oh, my goodness. Yeah. And it’s fun.

Mike [00:25:43] It’s fun. I mean, exactly. We let every senior leader basically show a different side of themselves in a way that maybe most employees don’t typically see. And it’s just another way to connect all parts of our organization to each other. And so that’s what the platform is.

Katie [00:25:57] Beautiful. OK. So stories. What did you hear? What sort of helped with that initial buy-in for some of these ideas at the ground level?

Mike [00:26:07] Yeah. So here is the really cool thing about this. Like we said, so there was all of these ideas and you know, and we had brainstorming sessions and some people worked as a group. Some people worked individually. There’s all these ways they’re inspired to get these ideas. But I think the most exciting stories were from that second phase of the process. And in that second phase, if you remember, that’s when other people invested in your idea.

Katie [00:26:32] Yes.

Mike [00:26:32] And basically the top 100 ideas that raised the most wow would be the ones that made it to the next round. So there’s clearly some competition here. And this made people get really creative as part of the process. I saw people who basically made their own CRM system. Like literally they had this whole system of like email addresses. Here’s email one I’m going to send email number three. They were doing mail merges depending on the response that they were getting from other people. You know, because they were getting a status of who was investing. Like people I saw just hovering around each other’s desks, putting posters all over their campus with QR codes. And it was so fun because people were allowed to be as creative as they wanted to be, to get other people to support their vision. And then the really fun thing and the unique thing about how we did this innovation tournament is then. So for some of these people, like one of our finalists, they probably had about 80 people invest in their idea. What that meant was that they had a group of 80 that wanted to see them win and wanted to see them succeed. So as they were building out this process and this product, if they needed somebody to help edit a video that they wanted to a promo for, probably one of those 80 people had the skills and was willing to help. Or, you know, they needed to just bounce some ideas off this group. They could send out a survey to those 80 people and get some immediate feedback on their product. And that was really one of the cool things about this.

Katie [00:28:15] Yeah, I was thinking of like user testing, too. Yeah, that’s really neat.

Mike [00:28:34] One hundred percent. And that’s why, as I said before, we had these podcasts that went along with it, and in these podcasts they would actually—so we had our PayPal Ventures team, which does like venture capital investing for PayPal. They actually explained the whole world of venture investing at this phase of the process. So this was a way to educate our employee base of like, hey, this is how things like this work in the world. And this is how it’s going to work in wow and this is how it’s parallel to the rest of the world and the types of investing that we see in Silicon Valley and around the world.

Katie [00:29:07] Wow. That’s incredible. You know, so much of what you’re speaking to that this particular strategy of a tournament and building community in this way and building a culture of innovation in this way, I would imagine that it had an incredible impact on motivation among your teams.

Mike [00:29:25] Yeah. Yes.

Katie [00:29:25] Can you kind of share a little bit more of your insight as to why having a personal stake in innovation but also getting confidence and being able to share and communicate your concept and get buy-in for it. What are your thoughts on how that impacts the motivation of the innovator?

Mike [00:29:45] Yeah, it’s a great question. And frankly, that is what drove me to take the job that I’m in about 40 years ago. So I started PayPal in products, jumping around between a bunch of different jobs as a product manager, product analytics. One of my jobs here was leading what was a function called product launch. And so I was leading a team in there. And I remember when I first sat down with my team, again, this is just something I’m passionate about. I asked every single one of them. I think there are 10 people at the time. Do you think of yourself as being a creative person? And I remember this so vividly. Like so I asked everyone in the very first meeting I had about half said yes and half said no. And that drove me crazy because, I’m like, we’re all creative beings. Again, this function is half like program management, half product management. It’s one where you just have to be scrappy and entrepreneurial because the whole job of product launch within PayPal at that time was to just get a product a customer loves out the door. That was our mission as a team. Just do whatever it takes. Find a way to do it. And so you do have to be really innovative and really creative in some ways to get people to potentially do their job or get people to do things that are outside of the scope of their job. And you got to find ways to influence. And so for those five people on my team who did not view themselves as being creative, it became very much my obsession to get them to truly realize that they are. 

Katie [00:31:16] Yeah.

Mike [00:31:16] That they have it. That creativity and innovation is not something that is just for, you know, the people who wear, you know, bright colored clothing or just walk around with MacBook’s or whatever. I mean, this is something that we just are as human beings. This is what got us, our species, to where we’re at today. And so I would do things with that team like —and they hated me in the beginning, to be very clear. But I think they grew to appreciate this. 

Katie [00:31:49] Really? Were they uncomfortable?

Mike [00:31:49] Well, you’ll see in a second why they hated me. I’m exaggerating slightly for effect here. But what I did with them, every staff [00:31:57]meeting—so we had a weekly staff meeting. The first thing that I would do is I would cold call on somebody and I would say, tell me something creative that you’ve done in the past week. [7.7s]

Katie [00:32:06] [00:32:06]Nice. [0.0s]

Mike [00:32:06] [00:32:06]So for a person who is not creative or innovative—I should say does not perceive themselves to be that—that is really stressful. Right. [7.3s]

Katie [00:32:15] [00:32:15]Yeah. [0.0s]

Mike [00:32:15] [00:32:15]So I am literally putting them on the spot here. But what am I doing while I’m doing that? I am forcing them to, the entire week, think about opportunities where they are being creative, where they can be creative. [14.2s]

Katie [00:32:30] Absolutely.

Mike [00:32:30] And more so even just recognize that. So it wasn’t even within your work. I remember one person telling a story about he was having problems getting somebody to come to his meetings. And this was a key person and this person was just not showing up. He did a little bit of research, found out about this person and found out that this person really loved a certain type of donuts. It was not too hard to get. And lo and behold, so the person on my team got in a little bit early, made a special trip before coming in and changed the invite. So it’s said real big and bold, hey, I’m going to be bringing in donuts from X for these meetings going forward. And that was just one little subtle way to amazingly have that person start to show up to the meeting, like, look, that’s not always going to work. But like to me, I’m like, that is creativity. That is innovation. To be able to, like, dig a little bit deeper.

Katie [00:33:28] Yeah sure.

Mike [00:33:28] But it wasn’t always work related. One of the people on my team was from Los Angeles. And so he very much knew about traffic. And so he actually, one day when I cold called on him, told the story of how he took this weird winding route into work, going through the airport even, and just like cutting through and doing all of this crazy stuff that was not on Ways or anything like that to be able to get into work five minutes faster. And like, again, so this was just a tool. And that’s why I said my team hated me in the beginning, because when you hear that and you think, well, I’m not creative and like you’re going to cold call on me to say something I’ve done in the past week on this. But this was just one tool where they really got to recognize that. They got to recognize that, yes, I am creative and it’s not just at work, in my personal life and all of these other things that I do. I am a creative being. And again, that was very much the inspiration. So having this team of 10 and doing it with them. You know, when I had this opportunity to do this kind of at a PayPal level, I jumped on it because being able to do—just, you know, for twenty-five thousand what I used to do for ten. That’s what gets me excited. That’s what gets me, frankly, every Sunday night. I’m super stoked to come into work the next day because I have the opportunity to do this.

Katie [00:34:54] Tell us some of the stories coming out of your innovation lab now.

Mike [00:35:00] Yeah. So what we’re doing in the innovation lab now. A lot of what we focus on are proof of concepts and prototypes. So many things that are outside of the scope of normal delivery teams within PayPal are the things that we’re very much focused on. [00:35:19]And within the innovation lab, we do it in a very unique way. It’s basically—we don’t have full time engineers; we don’t have full time designers and all that in innovation here at PayPal. It’s very decentralized. So people work on these projects in their spare time. These are passion projects. So we get to build with people in the company, really cool things in areas that they’re not yet familiar with, but they get to learn. [26.8s] So we get to work on things like augmented reality. We get to work on things like robots or maybe even TV commerce. We’re the place within PayPal—if anybody has an idea that doesn’t neatly fit into anything else within PayPal—we’re the place to come to because we can help give them the support and the backing. And our only filter that we have for these ideas is if you have a great idea and you want to build something, as long as you can convince a team of people to join you, we’ll help with that. Well, we’ll help at least connect you with people we think might be. But if you could get a bunch of people who are crazy enough to spend their time to work on this with you, that means that that’s good enough of an idea for us. And it’s something that we want to support. [37.6s]

Katie [00:36:34] I love how the purpose and the structure of the lab also mimics the tournament. And so you’re sort of fostering that kind of thinking across the entire enterprise. And then if they’re ready to take it to the next level and start to build or think about scale, it sounds like that’s what the lab is there to help support.

Mike [00:36:56] That’s right. I mean, we’re there to, you know, initially we’re there to build up just the basic skill sets in our company for a certain area. And we’re there for the company to learn. So when we started doing things in AR, for example, several years ago, we were doing the first augmented reality projects effort within PayPal. And we learned from that and we iterated it. And we had, you know, I think when we started there were about 10 teams at the same time working on projects and they were on different platforms. Some were using Android based, some were using a Microsoft HoloLens somewhere. You know, they were using all of these different experiences and they were learning from each other. It was almost like a six-month collective hackathon that was being done within the company.

Katie [00:37:39] I love it.

Mike [00:37:39] And that way, we are just all learning from each other. And then, you know, when we start to see the potential as a company, maybe these proof of concepts of these ideas, they kind of graduate. They move from the lab and they actually become part of the delivery team. That’s going to be then building these things at scale. That’s the basic model that we follow.

Katie [00:37:59] You know, I think, I’m imagining the role that story plays in each phase of these kinds of engagements, you know, trying to get the lab to offer support, to understand your idea well enough to be able to point you toward and connect you with resources. And then the sort of pull strategy that the innovator needs to use—and I say the innovator, right. It could be any employee, not just the formal—

Mike [00:38:23] We’re all innovators. So they’re one in the same.

Katie [00:38:25] Exactly.

Mike [00:38:26] That’s right.

Katie [00:38:26] Yes. And so the storytelling that needs to happen to sort of get buy-in and get energy around the idea and then that critical point where there might be use or there might be an opportunity to collaborate with product to bring it to scale. Tell us what sorts of storytelling techniques or relational techniques have you seen work well, in that moment? Taking something from the lab and bringing it to implementation.

Mike [00:38:56] Yeah. You know about storytelling in general. Like, [00:39:01]you can’t underestimate the power of story in an organization. I mean, it starts at the top. Our CEO, Dan Schulman—if we, you know, anytime he has a chance to speak to internal, external audiences, he is talking about PayPal’s mission to democratize financial services around the globe. And this is a story that resonates with each and every employee within the company. [25.0s] It gives us purpose for what we’re doing. You know, we’re not just like a button trying to make checkouts like that much more efficient. I mean, [00:39:35]there is a higher purpose in everything that we do as a company, and that needs to filter down to the stories for the organizations. And, you know, for every leader on every team needs to have a story about why that team is there. [15.7s] I actually—I teach a class in leadership at a local college here. And one of the weeks is on—it’s actually on both humor and storytelling. So I kind of combine those two. And the four-hour class.

Katie [00:40:05] Awesome.

Mike [00:40:06] But like [00:40:06]storytelling is so critical to the leadership process that we need to understand how it works at a high level, a corporate level and a lower level as well for any individual team. And I think within the innovation lab, the thing that drives story for us, well, I think everything starts with story is what I would say. When we were first doing our first proof of concept, we had not really done this within the company and there was really no charter for us to do this. So what I had to do and what this team had to do is like—so there was a team that wanted to work on a blockchain project. It was a really cool project that they were working on and we could see like potential for the business and so forth as part of this. [00:40:54]But there was no precedent within PayPal, so we needed to create that precedent through story. [4.6s] And what that meant was we needed to put these people on a stage. We needed to, kind of, track their journey through the company. We needed to, dare I say, make all people who weren’t participating in this project with that small team a little bit envious maybe of what they were working on, because then they could say, well, I could do that or I want to do that, too. And then they start to work on whatever their passion project is. So, you know, whenever you’re starting something new in a company, I think it’s great to embrace that. And to just bring this full circle now. So, you know, what started with this blockchain project four or so years ago has actually evolved to all these other proof of concepts and prototypes. And now we’re actually building a, you know—I’m currently hiring a full-fledged blockchain team. So it’s actually moving from innovation lab to actual delivery team. And who are the people that I choose for that team? The first people I reached out to are the ones who are working on all these projects part time. They’ve built up the skill sets. Imagine that they’ve been doing this in 20 percent of their time. If they could do all this awesome stuff, imagine what they could do 100 percent. And that’s, you know, part of the storytelling process. And that then just reinforces all of the other things. So as, you know, blockchain moves from the innovation lab to being its own standalone thing within PayPal, whatever the next technology that takes its place. This is a story that I’m going to be using again and again and again to reemphasize, to say, hey, this could be you. This is the journey that we want to follow. 

Katie [00:42:34] That’s incredible. So it’s creating belief and culture and seeing sort of, I think, it has to do with also building a culture that’s comfortable with a pace of change. You know that’s not afraid of it. That doesn’t feel threatened by change, but that embraces it. And so having stories like that, where you say, this didn’t used to exist. And look at all the things that needed to happen for that to happen. And now you can dream bigger as a result of that.

Mike [00:43:04] And, to build on that point, Katie. And not only being embracive of change, but also knowing that part of the innovative process means that you are going to fail.

Katie [00:43:16] Yes.

Mike [00:43:16] [00:43:16]And what failure means is not, again, you shouldn’t fail for the sake of failing. But that is just how we learn. Nobody, when my six-year-old has a spelling test, if she just looks at the words once then she’s not just going to get it right that first time. We’re going to work on it at dinner. She’s going to get a couple of words wrong. She’s going to learn. It’s going to iterate, and she’s going to be stronger and stronger. This is just how human beings operate and this is how organizations need to operate. [27.2s] You know, one other interesting storytelling piece that we’re actually working on right now is we’re building a physical PayPal graveyard. And so what that means is—so we’re building a scaled down version—and Ben and Jerry’s, for full disclosure, was the first company I actually heard of that did a physical version of this. [00:44:03]We’re doing a scaled down version of part of our campus. And in that scaled down, kind of, tabletop version of that campus, we’re going to have these QR codes that people can scan and there’s going to be this like little monitor in the front and it’s going to talk about the PayPal products over time that didn’t work. And there’s two main things I want to convey through this story. One, just because things didn’t work in the past does not mean that they’re not going to work today. [27.7s]

Katie [00:44:31] [00:44:31]That’s right. [0.0s]

Mike [00:44:31] We had all of these ideas. This should serve as inspiration. And two, the most important thing is we need to learn from this. We should not. When things don’t work, you shouldn’t just sweep it under the rug. [9.7s]

Katie [00:44:42] Right.

Mike [00:44:42] You need to go out there. You need to tell people about why this didn’t work, because somebody might have an idea of how it could work or somebody else might not make the same mistakes that you made from that. And so this is just a very visible way of just, of building a physical object that is going to serve as a story, as a reminder for all of us at PayPal to know what came before and how we can build, you know, even better things in the future.

Katie [00:45:12] I love the creative approach to that. I think, you know, there’s a lot of talk in the innovation community about how we can make sure that we do tell stories around failure, that we’re not ashamed to do that. And, you know, bringing it to life, it’s one thing to sort of create an Excel sheet or a Google sheet full of, you know, the list of the things that are on the shelf and have an institutional memory for it. But bringing it to life —there’s something that’s physical, that’s interactive, that has story elements to it. I think that that’s even more powerful and will create even more awareness and an institutional knowledge around the history and probably spark some really interesting conversations and thoughts from teams as they sort of look at that together. 

Mike [00:45:57] 100 percent, Katie, I mean, look, building physical things is fun. We like that. I mean and especially at PayPal—look 90 plus percent of what we do is in the world of zeros and ones. Like we’re building cool products and all that. But it’s not actually physical, it’s not tangible. So we have a small team of volunteers who is signed up to actually make this physical structure. And it’s cool to be able to do this. And we’re even learning about like different scales of like models for like train sets so we can put little figures in there and at all that. What’s the right scale? It’s fun to do all this research. And look, is this going to lead directly to any product? Like, no, we’re not going to get into the business of doing this. But is teaching this team how to build something amazing from scratch? And it’s going to be teaching a great lesson to any employee who’s going to be able to walk by this and actually observe and learn from our past failures.

Katie [00:46:53] It’s incredible. I am so grateful for the time that we’ve spent. It’s flown by. I have a million more questions I wish I could ask you, but I know that we need to wrap up. Would you share any advice that you would give to people who call themselves innovators? Right. Not necessarily wearing that label in your job title but do call yourself an innovator. Could you give any advice in terms of, especially storytelling and how to sort of pull that lever and have that as a skill that you use to be bold and get buy-in?

Mike [00:47:29] Hundred percent. Yeah. Look, I think storytelling is the most powerful thing that you have to get other people on board. If you are just creating great or innovative products and nobody is using them, well, that’s not doing anybody any good in society. You need a strong story around that—and you probably need a strong story to build that team, to convince the team that your vision and what you want to build is stronger than whatever other alternative that they have. So, you know, [00:48:04]what I would say to people is just learn from the best storytellers out there and especially to go outside of your core domain. [8.2s] Look, there was actually a podcast recently on Masters of Scale about Charity: Water and its talk specifically about their power of storytelling and specifically around a video that they made called the Spring. And the Spring, if no one has seen it, watch it. It is a beautifully produced 20-minute video that is effectively a commercial for Charity: Water. I don’t think it mentions Charity Water until about 11 minutes into the video. To be very clear, but it’s an amazing story that is just so inspirational and so empowering that you want to give and not because you feel guilty, because you feel it’s the right thing. It is the right thing to do with your money to do that. And to learn from that, to learn from fiction, to learn from comic books, to learn from wherever it is. Like look at all the stories in the world around you. Take from that and apply those stories to what you do with your teams and what you do within your companies. And if you can really embrace that, it makes you unstoppable.

Katie [00:49:26] Mike, thank you so much. I will link the Spring video in the show notes. And if you have any other links you want to share. We can coordinate. And I would love to include those as well. I’m so grateful for the time that you took to talk with us today.

Mike [00:49:41] It was my pleasure. Thanks so much, Katie.

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