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PayPal’s CEO on Creating Products for Underserved Markets

Source | hbr.org | Dan schulman

About a decade ago, when I was the CEO of Virgin Mobile, a colleague and I accepted an unusual challenge: Spend 24 hours living on the street in New York City as a homeless person would, with no money or credit cards, no cell phones, and just the clothes on our backs. Virgin had been supporting a charity for homeless youth, and during an employee event someone from the charity told us that the only way we could learn about the importance of its work was to experience the lives of the people it was serving. I agreed to do it. It was one of those experiences you never forget. We panhandled, and I wasn’t very good at it—it took me six hours to solicit enough money to buy a little food. Most people looked right past me, as if I were invisible. We spent a lot of time trying to find a safe place to sleep—we kept getting kicked out of places, and eventually we ended up in a skateboard park. I lived like that for only 24 hours, which of course is nothing—and it was during the summer, so the weather wasn’t terrible—but it was enough to give me a large dose of empathy for people who have to live on the street.

High Costs for the Poor

A few years later, when I was leading a division at American Express, I joined my leadership team in a variation on that experiment: We had to spend an entire day paying bills and moving money using methods available to people without bank accounts or credit cards. We stood in line at storefront check-cashing places, which are often in dangerous parts of the city. We went to retail establishments to pay utility bills with cash. We wired money. Managing finances this way can feel like a part-time job because of all the time spent in lines, and it’s very expensive—the fees are extremely high. We came away with a newfound appreciation for how costly it is to be poor, which helped drive our work at American Express to create new payment systems for people without access to traditional banks.

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