May marked PayPal’s inaugural Small Business Month, a program designed to allow our team to visit a variety of communities across the country to speak directly with small businesses and understand their pain points. We spent 30 days on the road talking about technology and digitization with merchants around the US and learned quite a bit about their businesses and what their goals are, allowing us to rethink our PayPal offerings and how we can better enable commerce capabilities to help them and create more opportunities for economic inclusion.
We embarked upon this effort in part because we know the positive impact that digitization can have on small businesses. From 2015 to 2016, small businesses using PayPal grew 22.9% year over year. In comparison, US small businesses (businesses with less than $5 million in annual revenue) grew 7.8% from 2014 to 2015, the closest comparison metric available. We also know that the digital marketplace is far more inclusive than the traditional marketplace - our research[i] found that small businesses in the heartland of America and in rural towns that use PayPal grew at similar rates to those on the coasts and in major cities. It’s clear that the Internet provides an unprecedented equality of opportunity but, underserved entrepreneurs may not have access to this or the digital commerce tools that could truly unlock that opportunity. It is our mission – and challenge – to better understand how we may leverage technology to bring more merchants online and into the global marketplace.
We learned a great deal from small businesses in our time on the road. Here are some of the key takeaways from the different events:
- In Atlanta, we partnered with Walker’s Legacy and learned that small businesses want to get their money fast and then put that money right back into their business. This was the most critical piece of feedback we heard and echoed throughout the crowd. They don’t want to wait 3-5 days but instead want it immediately. Additionally, the traditional financial system simply doesn’t work well for them. They don’t want to spend hours and hours filling out paperwork, so we need to continue developing innovative products where they can receive capital in minutes.
- We worked with Metropolitan Community College in Omaha to host small businesses at MCC at Do Space where we found that many PayPal merchants are looking for a full suite of small business tools – from invoicing to point of sale devices and more. They were hungry to learn what tools could help them get paid faster, allow them to accept new ways their consumers are paying and the different ways they could convert shoppers into buyers.
- When we visited Oakland, CA, we hosted Jose Corona from Mayor Schaff’s office and learned more about special programs hosted by the city that can be great resources for entrepreneurs who are just starting out. Small businesses can lean into existing programs and resources when starting out to help with the early days of starting a business. There was also very interesting dialogue around the importance of supporting diversity in entrepreneurship led by our friends at Kiva.
- In Washington DC, we partnered with the Global Innovation Forum and found out that small businesses are benefiting tremendously from crossborder e-commerce with customers from all over the world, and that their experience with trade is vastly different than what we hear in the political debates. Providing merchants opportunities to sell crossborder and providing resources for this, like the PayPal Passport, are business critical for the success of many entrepreneurs.
We also visited Detroit, New York, Minneapolis, San Jose, Portland, Louisville, Chicago, Tampa, and Houston throughout the month. And, we partnered with like-minded organizations who invest resources and insights for small businesses across the country, including SharpHeels, Bunker Labs, Revolution’s Rise of the Rest, Network for Teaching Entrepreneurship, the Manhattan Chamber of Commerce, and the Association for Enterprise Opportunity. We were truly humbled by the turnout and all that small businesses shared with us!
The biggest takeaway from the month is that we need an ecosystem of public and private sector partners to come together in support of our nation’s small businesses. No one player can solve all the challenges that small businesses face, but if we work to bring the best of our assets together we can unlock tremendous growth in the engine of our economy.