Why PayPal bets on open-source

The old way was to spend a lot of money on limited software and hardware. The new way, as PayPal’s Bill Scott, VP of next gen commerce found, is to scale out with lots of low-cost hardware and software. Open-source enables this, and to marvelously good effect.

Scott, a firm believer in lean engineering, stands by the fact that it’s the secret sauce that fosters innovation and efficacy.

Lean engineering, simply put, is becoming a part of the experimentation and learning cycle. The idea is to have rapid iteration and get feedback from customers quickly.

“We talk about lean startup and lean UX, but without engineering being lean in the way they think in partnering, we can’t really see that happen. Because engineering – they’re the ones who create the bits. So we tend to take engineering and make it just a production machine,” believes Scott.

Also read: Why enterprises embrace open source

There’s simply no way around it. If you want to be the next “disruptor” on the block, it’s imperative for your engineers to be part of the understanding of requirements; for them to know what they are doing, and why they are it, so they can go: “I’ve a better idea.”

“The premise of lean startup is all about being able to invalidate your ideas. You may have a lot of great ideas, but when we get down to implementing it, you may figure that’s it’s not all that good. So it’s really all about failing fast and learning fast,” explained Scott.

The next question that pops in our mind is: What’s lacking in the industry right now?

For more on Paypal read: PayPal ropes in the Bounty Hunter

“I think we’re trending in the right direction, but there are a lot of engineering organizations that think of themselves only as a delivery machine. I can tell you that there have been many companies who reached out to me to ask: How do I get my engineers to where they want to be a part of the overall process?” said Scott. “So, I think, in the engineering culture, the thing we’re lacking most is to associate yourself as a partner in the forefront for the process.”

And this is precisely why a lot of his passion revolves around getting engineers to wake up to the fact that they have product, design, and business folks who want them to be part of the solution.

How open-source cracks the case

“I think that open-source is key. One of the things we decided earlier on, when I got to PayPal, was we wanted to make sure that our technology staff was so full of open-source, and so part of the open-source community that anybody who came into the company just knew how to use it,” explained Scott.

Scott calls it the “Googleability” of framework. Maybe some framework should be proprietary to the company. But, a lot of the stuff doesn’t have to be.

“So, it’s using open-source, it’s giving back to open-source. We’re working in an open- source manner inside the company. And that’s a big win – we call it inner-sourcing,” said Scott.

PayPal essentially is an open-source office, dedicated just to the mission of how to get all teams to think of themselves as an open-source entity inside the company.

An important factor to consider is that, when you have an open-source community, you need to have a contribution model. You also need to be able to move platforms to where they can support the model.

“And we’re not there yet, trust me. Some of the teams are doing real good, while other teams are struggling. It’s an ownership thing, really,” he added. “What I’ve seen is that a contribution model can get messy. People are going to push some code that is bad – this huge mammoth code that turns out to be a nightmare and the team has to deal with it.”

“So you have to have policies around smaller changes and test tolerances. That’s something we’re working on and we’re seeing a lot of success,” beamed Scott.

Obstacles you might come across using open-source

Some of them are standard ones – can you trust the code? What kind of bugs could it have?

“We’ve got a handle on that. You have tools to help you think through and scan the code. But it’s more of a mindset, an acceptance in the organization to allow that, and that’s why we created an open-source office,” explained Scott.

A key thing, he believes, is to hire people who have an open-source mindset. You can’t say, “Okay, cool, we got open-source in, now let’s make it into something totally unrecognizable.”

So, who bears the cross?

“The best change happens bottom-up and top-down,” believes Scott. “When I joined PayPal, our CTO at that time, James Barrese, said: Come join us, and lead a pirate band for change.”

“Then we started the technology change from the bottom-up. We didn’t have to do a lot because we got the organization to be excited about it,” he added.

It boils to this: If you have a CXO who is mandating the change, it will have some success. But it’s better if you have key people whom the CXO has hired to have that mindset.

This is because he or she gives the air-cover for that change to take place and also communicates the message to the top rungs in the organization.

What PayPal has in store for next gen payment

Scott believes that PayPal is not just a payment destination, it’s a fabric. With its acquisition of Braintree, for example, or Venmo, which is a payment experience, PayPal’s new mantra has switched from “How to get everyone to use PayPal” to “How to meet consumers and merchants where they’re at, in a way they want to be met.”

“It’s like when you have that delightful experience, just in time, with a new-found freshness. That’s the magic we’re looking for. For example, every time someone uses Uber or Airbnb, that’s PayPal powering them,” beamed Scott.

“It’s not about getting people to use your product, it’s about solving their problems. If we forget this, if we become solely PayPal-centric, we miss out on opportunities. That’s what makes us what we are,” he concluded.