The biggest threat facing PayPal in 2010

When I was preparing to talk to Scott Thompson today, I asked if there were any questions others wanted me to ask him. Richard Baker responded with the question: “What is the biggest threat facing the business in 2010?” While interviewing Scott, I did have the chance to ask and he said, “It’s not from the outside but from our own ability to execute on plans and commitments that we’ve made…The threat to this business is if we don’t fulfil our aspirations because we don’t execute on our commitments.”

And if you look at how much PayPal has changed in the past year, this is an understandable statement. In the last two months alone, there has been the addition of new markets including Israel and Brazil, the release of a number of APIs to developers with more to follow in the upcoming months and a new push into the mobile market.

That’s not to say, of course, that there is no competition. With the growth of the ecommerce market, there are not only the long standing competitors but those in the digital goods, micropayment, and social realms. Likening PayPal business practices to a football match, Scott commented that PayPal is good at playing offence. “We play offence, that’s what we do. We just don’t know any defensive plays, we don’t know what the set is for that, how to execute so we play offence.” He went on to comment that the best offence for PayPal is to make aggressive commitments and then to deliver against them.

“The truth is, if we look at what they’re doing to compete against us then we’re actually looking in the rear view mirror. We lead and we’re playing offence in the lead, and to take a look back and to imagine that someone is catching us or doing better than us, then it’s just distracting us from pushing this game forward. I think it’s all about us doing what we intend to do, what we said we’d do, and we’re committed to do, and that’s the best strategy.”

2010 will be an interesting year to see how PayPal keeps up with the demand of the changing market. This is just the beginning of this new chapter of growth and change so the question is, can the ever growing team at PayPal keep up with the momentum they’ve created?