john-lunn-hotseatThis post sponsored by PayPal Startup Blueprint. Pando retains full editorial control over the content of sponsored posts. 

It’s no secret: Up until 18 months ago, PayPal was one of the world’s largest tech companies that didn’t act like much of a tech company.

In response to constant gripes from the tech world and the rise of payments startups like Square, Stripe, and Braintree, eBay CEO John Donahoe finally decided to shake things up by named former entrepreneur David Marcus to head up the division. We’ve written at length about his efforts to change PayPal’s culture.

While PayPal solved the issues with one competitive upstart by buying Braintree, Stripe, and Square still pose big threats. Stripe, in particular, has recently raised a heady round of capital– buoyed by its good word of mouth in the tech and developer community.

PayPal isn’t going to cede this ground easily. Eighteen months ago, Marcus tapped John Lunn as the global director of developer relationships, and one of his big initiatives has been Startup Blueprint, a program that gives thousands of new startups $1.5 million in free payment processing, plus better customer service, helplines, and access to other tactical startup advice. Instead of investing in startups, it’s essentially letting them keep more of their money– and giving a cash-strapped startup a tangible reason to use PayPal.

The catch: You have to be funded by a short list of VCs and accelerators. Last week, they expanded the program to include 16 new venture funds and incubators. Partners include 500startups, TechStars, and SeedCamp– although not the granddaddy of all incubators Y Combinator.

In this sponsored Hot Seat Q&A Lunn talked to us about the challenges he’s faced trying to woo back developers to an aging giant that long neglected them.

Do you think PayPal has a stigma problem to overcome when it comes to developers? 

I think we’re doing it. One of the main reasons we bought Braintree was to get closer to the developer and startup community. We’ve gone from a state where we had almost all haters to a state where people are actually defenidng us in forums. A year and a half ago if we were on Hacker News it was all bad. Now, about half of the comments will say we are great. The feeling is we’re getting there.

What do you attribute that to?

Part of it is investing in customers service, making the APIs work, the battle hacks series, but honestly, I think the main thing is standing up and saying “we suck.” That is huge. It shows you are a human being. It shows that things aren’t working in this big corporate machine. As human beings, we are trying to make it better. People generally don’t get angry if you are trying to make things better.

David Marcus has described some of his changes inside the company as “shocks.” What’s it been like on the inside?

As an employee of PayPal, his approach has been hugely refreshing. We can actually feel proud of our products now. When you get told that you suck all the time, it’s hard to feel good about the company. Being at a corporate monster starts to get to you, and I feel like Marcus freed people like me up to get on with it. He said, “You know what the problems are, go fix them and don’t let anyone get in the way.” It kept me at the company. I probably would have left.

How could PayPal make developer relations better? What is PayPal not doing enough of?

We need more products for startups. We have to build what the next generation of startups are going to want to use and it’s probably not what we are talking about today. Things like the ability to do fingerprint payments. Extending our technology to wearables. We still need to make sure the platform is super flexible.

What do you think of the decision to keep Braintree a separate company?

I was one of the ones pushing for it. PayPal can give Braintree a platform to allow it to grow much quicker. For instance, PayPal has connections to banks all over the world. On that platform, Braintree can go across the world far quicker than its competitors. Last thursday Braintree announced an Ignition Program that gives every new startup $50,000 in free credit card processing. It was a limited program they did when they raised their series B, but they were able to launch it now and forever for every startup because they have a company with the resources of PayPal behind them.

But we don’t want to slow a company like Braintree down with all of our process.

SPONSORED: Accelerator? Help your startups go global with the first payments company dedicated to helping startups grow. Click here to learn more.

[Image via London Web Summit]