How PayPal Lost its Edge: When Money Becomes the Driver

"Matt, how much more money can you spend?" I didn't expect to hear that from a CFO.

“We have extra money at the end of this quarter,” he explained, “I’d rather reinvest it in the business versus surprising Wall Street and looking like we can’t manage our business.”

That made sense once I thought about it like an investor: Give me $1, I'd return $3 a year later. That’s a great investment! But a bad growth strategy.

CMOs and CFOs

Finance teams love CMOs because we have flexible spend. While other departments are stuck with fixed costs like salaries and servers, we buy ads and pay agencies on short contracts. When times are good, we can deploy cash fast.

I wanted to take this money – it’s tempting to pile up budget and headcount, to build my empire. But cash wasn't our limiting resource.

My biggest wins generated hundreds of millions in ARR without buying a single ad:

• We improved conversion through boarding flows

• Optimized referral loops

• And A/B tested customer service treatments to boost activation and reduce churn

Real growth came from fixing a broken funnel, not filling it with paid traffic.

As we grew, it got easier for me to find cash, but impossible to get engineers to make a real impact. Something had changed.

How PayPal Lost Its Edge

No successful startup starts out coin-operated. But companies get big and money becomes the driver, not the outcome. Leaders start thinking like asset allocators rather than builders. And departments become fiefdoms working for themselves, not for customers.

At PayPal, this started after the eBay acquisition. The founders left, and former consultants took over and filled the org with MBA thinking.

Spot this shift early – it’s the beginning of the end of true innovation.

My Advice to marketers

Earning finance trust was smart. That got me in meetings above my pay grade, and they defended me when I wasn’t in the room. But I should've used that trust to push for the resources I really needed – design, engineering and data.

My advice to CFOs

Money is just one lever, and often not a great one. Don’t just ask “how much can you spend?” Ask “Where is the bottleneck in our funnel, and how can we open it up?” The best marketers will show you data and ask for more than just money – help them get it.

I hope this helps!