The Secret to Negotiating; Making $50BN for Yahoo on Alibaba

Oh, I’m so happy to be here. I know it’s a long time in coming. We made it happen in the end,

Aren’t they always unconventional?

Alright. Now this sounds terrible because it’s so trite, but one of my first memories of playing as a kid is playing bank teller Barbie. I had this pink Barbie convertible, and David Cassidy I’m like a seventies kid, so this is, like, 1976. David Cassidy would pull up as a customer, and I was the bank teller. And so I know that sounds totally ridiculous, but it’s in fact true. And so I come from an incredibly entrepreneurial family. Everyone in my family started their own companies. I’m the only person to have worked for anyone.

I got lucky and that I knew enough to know I didn’t know anything. And so I started my career at Goldman Sachs, but then evolved to pretty entrepreneurial components of any company that I worked at, where I was building a team, building a company, building new products. I always stuck with financial services because I loved math. I loved the idea of inventing in a really old industry, and I loved building businesses. That’s the theme that always exists in my life, and total entrepreneurialism.

If you come to one of our banks in Kansas City I run a bank, and we actually have physical locations that are pretty gorgeous in Kansas City. And there is a vault in our Lee’s Summit, Missouri location that is absolutely stunning. And so you look at it and say, there should be a movie that happens inside this vault because it’s pretty cool looking. The door is gigantic, and it’s old school looking, and it makes you feel like you’re grounded in a lot of history when you go there.

We’ll put a we’ll put a special place for you in the vault.

Oh, now we’re gonna go deep in psychology because I am absolutely running from my childhood. So I had a very unusual childhood in the sense that I ended up moving out of my house when I was 14, sent myself to boarding school, and I got myself out of a household of chaos. So when you’re in that kind of environment, you have to stand up for yourself and be independent on your own. And so I was always involved in entrepreneurial endeavors and making sure I could support myself and get myself to a different place in the world.

I saw the dreams of building businesses that my parents established, but then also knew that I had to survive on my own. And in order to improve my own life, I was just gonna have to do it on my own. I only went to three years of high school because I needed the work. I needed to put myself through school. I left high school as a junior. I went to college. When I was in college, I ran a bunch of businesses that helped put myself through college.

When you’re stuck in that kind of environment as a kid, you learn what grit is, and you learn what entrepreneurialism is, and I ended up having a drive to succeed to get myself out of that environment that I think is unending. I wanted to be successful. I wanted to be independent. I wanted to have a lot of things that didn’t exist in my family. My entire career is built off of that foundation. What do you think grace is? Oh, grit is like an intensity around needing to be independent and needing to drive yourself forward and pick yourself up and just brush yourself off and get back on the train and go.

It’s one of those things that I try to teach my kids. There is unfortunate a curse of kids growing up in a level of comfort. I try to make sure my kids understand you gotta work. You were independent. You were putting yourself through school. You were gonna have your own jobs. You gotta work to have extra money. They’ve gotta learn that they’ve gotta build their own career without the benefits of their parents providing so much comfort that they lose their own self esteem.

The only expectation I recall from my parents is that around education. They were very education focused. And the only place I remember my parents ever talking about was University of Pennsylvania. You’re gonna go to Wharton. And I was a very entrepreneurial kid, as I mentioned, and my parents just drilled into me that I was gonna go to Penn. So I only wanted to go to one school. I went to that school. I applied to that one school. I love that school. I think I owe that school my entire life.

That was really the only expectation they had for me. I think everything else I had to build on my own around what I wanted to achieve in my life and who I wanted to spend time with. The other thing that happened to me really young, and again, I think it’s a function of reacting to my childhood, was that I met my husband when I was 18. And my husband came from one of these super classy families, and he’s a very generous family. They were all so erudite and wonderful.

His mom studied Shakespeare, and his father was like an old school lawyer. He taught me about longevity and relationships and good people. Like, you wanna spend time with good people, that is foundation and a great reaction to my childhood where I met people who had a really high integrity, and I just wanted to spend time with them and live in a world of excellence. And that’s what I saw from him that was a total reaction from my childhood, which was the exact opposite.

All of his parents’ friends were all married for decades. They had friends for decades, and they were true to who they were. They stayed loyal to the people that they associated with, and they were all kind of people of high integrity. I love that, and I gravitated towards it. It’s the same reason why I went to go work at Goldman Sachs when it was a tiny private company, but it stood out among Wall Street players as being this high integrity firm that focused on excellence in their clients.

My husband’s relationships were the same way, and I was mesmerized by that as a kid who grew up in a broken home. I wanted to be like those people, and I was gonna leave behind broken relationships and make sure I put myself in a different world to watch and observe and see what I could glean from people who seem to excel at building trust with other people, and I kind of love that as a kid.

I think there can be a bunch of different dimensions around that where people have incredible raw intelligence and able to actually create outcomes that matter and make a difference to a company. And so I focus on not the work they’re doing, but the outcomes they drive and how they drive it as a vehicle for looking at who’s an absolute killer. Who has good instinct? Who has good judgment? And what do they deliver for us?

I focus on what I think the person’s innate skills are as a human, not what jobs they’ve had in the past. Someone could be amazing at people skills, and you could pull someone from sales and get them to be a recruiter. It doesn’t matter that they had a totally different function. That function has a certain level of underlying experiences that attach to it that often attaches to where someone’s true spike is in who they are. That may have nothing to do with their resume. I remember when I was at Square, I ran HR, and people used to look at my background, which was extremely financial.

Right? I worked in private equity for twenty years. I’ve always created esoteric financial products. And then I ran HR for a decade at two tech companies. I used to say my best skill was that around understanding the good in people and what they might be good at in their jobs. That had nothing to do with finance. But if you really abstract what private equity is judgments about people, where you need to place them in their jobs, and what levers of growth you give them in order to help them grow a business, that is recruiting, And that is leadership, and that is HR.

And so as much as someone might look at my background and say, oh, you’d be an amazing CFO, I was like, no. If you truly understand what I’m good at, I’d be an amazing head of HR. I think the most important thing you can do is just understand everything outside of someone’s resume. What are they truly good at and what do they suck at? And if you focus them then on a job, that’s what matters.

So you spend a lot of time with people, both in a personal setting as well as in an interview setting. I like to go case studies with people and see how they operate in a real world experience. That helps you understand how they operate on the fly and what they’re good at and not good at. And then I also spend a lot of time on things that have nothing to do with their resume. And I often start with a question of, tell me what your life goals are.

Like, when you look back at your life fifty years from now, what do you want to have achieved? And then what do you think you’re truly amazing at? Please don’t give me anything that shows up on your resume. And what do you think you suck at? Disarm people in an interview by saying, let me tell you what I suck at. You might look at what I’ve done and say amazing finance. But in reality, I’m horrible at, like, accounting and math on the fly. I can’t do it in my head.

That has never been my skill. But when it comes to, like, intrinsically understanding what motivates people, I love to just have these questions of curiosity and get to know people and understand what drives them so that I know what job to give them, where to put them in a company. And that’s how I spend the time in interviews, not tell me about how you let’s add x y z company. And I just don’t wanna know anything that shows up on their resume. I

I made a lot of mistakes when building some of the functions at Square around hiring for domain knowledge. But when we were building out banking and lending at Square, it was a pretty new concept. We were trying to find particular expertise in a product set that really hadn’t been done before. Fundamental mistake there. And in reality, I now index away from domain knowledge than I ever did because a lot of what we’re creating hasn’t been done before, or you want first principles thinking. And I would rather focus on things like raw intelligence, judgment, curiosity, grid, ability to manage ambiguity, rather than looking for things like domain knowledge or operators with prior scale.

That’s another big mistake where you assume because someone had a lot of zeros around the output that they created at a big company, that means something. And I would rather look for people who are scrappier and have an ability to just manage an ambiguity than I would someone who’s been an operator, a high profile company at scale. I ran HR at Yahoo, and one of the observations from Yahoo, because there’s an incredible at Yahoo, is that anyone who went to Yahoo was grittier than a lot of the people who worked at higher profile companies that were just minting money.

And when you came to Yahoo, you had to work a little harder. And so I find places like that are incredible places to go higher where people might have a little bit of a chip on their shoulder. They might have to work harder. They might have to be scrappier than places where gold falls from the sky.

Yeah. I’m a pretty intense twenty four seven kind of person. You will get emails and Slacks from me at any hour, including in the middle of the night. But I think it depends on the kind of culture you’re building. You have to set up a culture where you don’t build entitlements into the way that you operate. And I think that’s really important from the first 20 people that you hire to lay out the foundations for the focus, the intensity, and the inspiration of what you’re trying to build.

But but you have to be pretty disciplined about your team. Weed out people who are not hitting the goals. And you, as a manager, have the honest to set goals and OKRs that drive the team forward. I had this experience in COVID in developing p, and we developed p, this is at Square, in a crisis. And we ended up with a core team of people working on it, and then we literally got the entire company of Square to volunteer for us to be loan reviewers twenty four seven during that period of time, and people were inspired by the mission.

I’ll never forget the discussions with people all over the company and how they were motivated to wanna kill themselves in ways that I find incredibly inspiring because they knew that they were attached to the mission. They just wanted to change the world. They wanted to see outcomes that were incredible, and so people were willing to roll up their sleeves and do the work.

First, I focus on the long game with people. I really care about their career. And it could be someone who is multiple levels down for me. I don’t care. If I’ve built a relationship with someone and I wanna help them, I will take a twenty year view of how to build their career and know that they’ll show up over time. The second thing I do is I focus on them to my own detriment. And I will send people to business school. I’ll send them to other companies.

I will want them to go learn something even if it gets in the way of our road map. I’ll move them to other departments if I think it’s better for their career. I genuinely believe that’s the way to build that kind of followership where people trust that you have their best interest at heart. And I have so many examples of this where I’ve sent someone at a business school even though they were my best person in a particular field. And then I pay attention to true, just genuine principles of being a good human around the understanding of who they are, being honest with them, listening to them.

I spend a lot of time listening to people I work with. Sometimes they just wanna vent. And sometimes they need a little bit of a smack where I’ll say, yeah. I gotta call bullshit on you. I don’t see it that way. And I think people appreciate that honesty and the relationship that drives because I think they know that I want them to be better as a professional. And then finally, I guess I’d say I hope that I inspire people. I work hard myself. I try to do best for people.

I I put my heart and head into everything I do. And so hopefully, means something to people, and that I’m not just phoning it in. I clean the coffee pot in our office in Sunnyvale because it’s dirty. And when I see it’s dirty, I’m not above it all. I could do that and then move from that to a meeting at the Federal Reserve. And I have no issues going from one end of that spectrum to the other. I might just try to do whatever needs to get done.

I don’t think of it as a zero sum game. I think there’s always ways to be creative in getting an outcome that enables both parties to feel good about something. And that doesn’t mean that every point is gonna be a love fest where everyone is super happy, but it means that you can make trade offs in what’s absolutely the most important things to you and what can you give up. I try to focus on understanding what someone needs, truly understand what’s the outcome that they need.

Do they need to look good? Do they need a certain economic outcome? When do they need certain economic outcomes? And I think if you’re really creative in first understanding what’s driving their decision making process, it could yield a lot of optionality in what you negotiate for. I don’t see things as black and white as an outcome. I think it yields good long term relationships, and I think it yields great economic outcomes.

Oh, they can be jerks. They think, like, it’s their way or the highway. There’s only one way to get to the right answer. And I think sometimes people overplay their hand around leverage. You may have all the leverage in the world, but you gotta decide, do you need to have an operating relationship with this person? So having that negotiating leverage is only gonna burn the relationship. And I think there are just so many per interpersonal relationships in the way that you need to manage these things.

And so I think you have to draw that into the components of the discussions you’re having. I’ll give you an example. I have investors. This is in Lead Bank. And I wanted these investors because I thought they’d make us more disciplined as a group of founders. And I the smarter and better they were, brainpower. I wanted their advice, and I wanted them to kick us in the ass. We had a lot of leverage when setting up this company because I was also willing to fund it myself.

And the only reason I was taking folks was because I wanted their brain. And when we set the terms for our investing rounds, I was very comfortable letting our investors get a lot of their way on a lot of different components of the transaction because I knew I needed certain things. I needed a structure that was appropriate for a bank holding company. I needed something that was gonna get us approved by the Federal Reserve, and speed mattered. That was more important to me than the last percent of economics that I could derive from our investors.

And I also didn’t want economics to drive the outcome of our deal. It’s an upside down way of investing and bringing in investors to around, but I knew what was important to me. And then I understood what was important to them. I was focused on something very different than them from an outcome point of view, and we were able to negotiate quite easily because I was willing to give them things that they cared about because I wasn’t willing to budge on things that were going to make the long term operations of my business more successful.

I didn’t want them to have terms that were gonna make a bank more complicated to operate over the long duration of of our business. And that’s the way I negotiated it.

Economically, some of the best deals I ever made were around Alibaba, and that’s a situation where we had no leverage. It probably generated $50,000,000,000 worth of economics to Yahoo shareholders. This was while I was at Yahoo. I was on the board of Alibaba. Unfortunately, it was a deal that was struck that was selling half of Yahoo’s economics back to Alibaba at the IPO. And this is massive economics. I had the goal of trying to get some of those economics back even though a written transaction was executed and that the economics were contractually obligated to be given up at the IPO.

I went on a singular mission to get equity back. And I would always say to the Yahoo board, equity is good. Equity is good. I have one goal. And so I went and worked with the Alibaba team. There were pretty bad relationships before my arrival between Yahoo and the Alibaba board and shareholders. I went to rebuild those relationships that we had a foundation for trust in order to renegotiate some of those deals. I worked really hard at that. I spent every other week in China for several years.

I showed the shareholders of Alibaba that I was gonna put their interest first so that when I went to negotiate and get equity back, they trusted that I had done right by them for their business. I had let them do things that they felt I didn’t have to let them do. And as a result, they were willing to give me back some of the economics on behalf of Yahoo shareholders. So the economic yield of those transactions where we had absolutely zero leverage were extraordinary, and I will forever be proud of it in order to create something out of nothing.

I was involved in dealing with a lot of the financial less in managing them between Alibaba and Alipay and the banking licenses at Alipay. And as an American who grew up in Atlantic City, New Jersey, I have to say it was a pretty surreal career experience. The people at Alibaba are extraordinary. As I was watching what was happening in China, there was a lot to learn as an American company with regard to the velocity of invention, the creativity that they had, the way that they were able to deploy financial assets against transactional data.

And I know we drew a lot of inspiration from that in what we built at Square because we had seen what was being built at Alipay with firsthand insight and were able to look at that and draw inspiration from it. It was an unusual career experience and an unusual insider’s view in being able to draw experiences from Chinese financial services into US products.

Oh, personal deals that I’ve done in the last year. I’ve made some pretty disastrous trades with the changes in the financial market. I can’t say that I’ve done best for myself not selling quick enough, and I think people usually are great at investing and selling, and I think I’m guilty of that myself.

Yeah. There’s a risk there’s an entire game theory of risk management around exiting, and I think some people are incredible at it. Some people are not. And I think that drives returns in venture and private equity. And there are some folks who are absolutely incredible. Like, think Cotu is an investor of mine. And I look at Philippe Lafont, Thomas Lafont, the way that Cotu manages risk, and I am mesmerized by their ability to understand market dynamics and react to it in really smart ways. They aren’t enamored by the companies that they invest in.

There’s a lot to be learned around watching people like that.

I think they’re great at following trends, understanding when they see breakages in the market, and not being emotional about the need to sell or the need to make different trades. I think they have an intuition and an data science driven expertise that very few people in the world have. I see that with incredible money managers and risk managers, and I think there’s a real skill around it.

Yeah. Fintech is an industry that’s driven off of financial services as a whole. And thankfully, from a fintech point of view, most of the market cap in fintech is over 50 years old. It’s incredible when you look at industry and banking as a whole, how old it is and how concentrated it is. There’s 23,000,000,000,000 of assets in the banking system. The top five banks hold 41% of that. And so there’s so much room for invention in fintech, starting with that level of control, centralization, and age around the financial products that drive our markets.

I think about it from an industry point of view and like a sub subgrouping within fintech. I think we spent the last ten years iterating on revenue within fintech. We’ve been incredible at top line revenue. You could look at companies like Audience, Square, Stripe, say, wow. They have taken the idea of the inbound of a transaction and made it incredibly frictionless. They have abstracted away all of the pain associated with collecting revenue. The place where we haven’t invented nearly as deeply is that around expenses. It’s much harder because the fractionalization of that market is much deeper.

And so I see the next ten years of interesting companies being developed around expenses, expense management, and then infrastructure.

So within expense management, right now, when you want to manage your entire p and l, all of the components of how things get paid go out in very different ways. You track it in different ways. You pay it in different ways. You get invoices. You have to manage it differently. You have to pay out people differently. You have to pay out people in different countries. You have to pay out in different companies. You have to pay out people. Again, people are in different countries, different states.

And so the complexity around every component of that stack is extraordinary. And there really aren’t companies that have made it easy that are operating at scale. If you think about a company like Square, all of the innovation has been around taking in the inbound transaction. Right? We’ve made the actual transaction at countertop super easy. Great. That’s revenue. Everything below that in how you manage your p and l is still a hot mess. There isn’t an organized way to do that. You might think of accounting software, but accounting software is the tip of the iceberg on a ledger.

It’s not the management of, are you sending out checks? Are you sending out invoices? Are you sending out credit cards? And you have the same amount inbound. And so all of that is gonna get abstracted away by companies who are able to streamline how that p and l is managed from an expense point of view. That’s what I mean by expense management.

If you think back to fintech, it’s not that old of an industry. When Jack created Square was 2009. So we’re in a market that is fifteen years old. And so I think the first batch of invention was really around the first and easiest part to tackle around revenue. And in the last few years, companies are starting to build creativity around expense management. Mello is one of these companies that I love. Topalti is one of these companies that I love that are really just starting to invent around that market.

And then I think there’s also investment around infrastructure, and you needed the infrastructure to be more sophisticated in order to really get to these underlying components that are now getting more and more sophisticated. Both of those markets are things that I think will be really interesting in the next ten years.

Well, you can ask that question to every bank in The United States and in the world. Why didn’t JPMorgan create Square? I think in some ways, they have so much embedded infrastructure and benefits associated with the system that they run that in many cases, they don’t decide to disrupt themselves. I And think these companies will be incredibly disruptive to lots of incumbent members who have lots of tentacles into the ecosystem of how money is paid out.

Old school infrastructure companies. Large financial services companies have understood that they need to innovate. I think the question is, can they do it? And they all need to disrupt their own products and set up teams around their own disruption. And I think if you’re willing to do that, they have the chance at being able to build the next stage of products that are inventive. If they decide that they just wanna manage their business for cash flow, they will die a long term death.

Companies like PayPal, Square, Adyen, and Stripe are kind of incumbents. Like, you can’t say that these companies at the scale they operate in aren’t incumbents. And I do think you see different levels of invention at companies like Square that still manages to build many multibillion dollar products within its own organic infrastructure. Stripe as well. And I think there’s a magic to the way that they do that that I think is very important to learn. And I think those kinds of companies will continue to innovate. I think Goldman tried to disrupt themselves, but they did it in a market that they weren’t good at, which is consumer finance.

They just had to restructure that business, and I think they’re learning some important lessons about focusing on things. And don’t focus on something that you have no insight into. They’re learning some tough lessons right now.

So there’s always room for someone to innovate on what you’re doing. And if you are not disrupting yourself, someone else will. I think no matter who you are, there’s always for your product to be disruptive. I look at what’s happening right now with AI and a company like Google, which I consider to be one of the most interesting scientific companies ever created. And out of the blue comes ChatGBD. Like, it’s incredible. I think you always have to be willing to disrupt yourself. Two of the things I like to do that are really important in a culture of disruption is making sure that you have who are well regarded, and someone is a star and the highest performer can be an IC.

You don’t have to be a manager in order to be considered amazing. That’s super, super important. Because this idea that you need to, like, keep growing teams in order to become more powerful in a company is like a culture killer on invention. You could have people who are incredible, who are just incredible operators in their own, and they need to be rewarded. The second thing that you need to do is to take people out of jobs that they have succeeded in and give them an idea.

And if you can do that in a company and a person is rewarded for coming out of this huge job and starting over, that is incredibly powerful. Because there’s this historic convention that power grows with the number of headcount that you have underneath you, and that absolutely is a cancer in a company. And so when people get rewarded for invention and creation, small and being entrepreneurial around teams, that is absolutely magic in a culture or company no matter how big it is.

I don’t agree with micromanaging at all, unless there’s someone who needs to be micromanaged because there’s a particular performance issue. I am a believer in setting direction as a leader, and that you hope that you’re hiring the right people who know how to get the job done in their own way. I don’t focus on the inputs of how they do it. I focus on the outputs of what gets done. I am not a micromanager, maybe to a fault. People I work with, I absolutely trust, but I like to hire certain kinds of entrepreneurial people and let them run.

And so I I don’t ascribe to the theory of micromanagement.

Yeah. What’s happening in the crypto market has been an important moment because I think it’s causing everyone to step back and take take a moment to think about what real models are in the business that are gonna drive real businesses and real outcomes. Is a product of a bull market? And I think we’re gonna revisit on first principles businesses that are gonna change the way financial services take place. And so I think the air comes out of the balloon, and you go back to first principles thinking, you go back to constraint, and you get disciplined about what you’re gonna operate.

There are some components for us as a bank that are also interesting. We understand how to assess risk in the crypto market, and we have been able to onboard those crypto companies that are super high quality companies that are getting unbanked, we have benefited out of the derisking in the market. And we have been a net beneficiary of the scrutiny in crypto. And fundamentally, I’m a long term believer that we will find use cases that have benefit over the long term. I don’t think we’re there yet on any use case, frankly, that I think will have longevity in the market.

But I do think the underlying technology is super important to experiment with and to explore new ways of building financial rails. I think it’s worth the investment.

We’re absolutely suffering in The United States as a result of that. And you have heard the leaders of the largest crypto companies call for more regulatory oversight because the place that we’re in today is really You don’t know whether you are going to be governed by the SEC or another regulatory body coming in and saying, oh, you can’t do that. Sorry. We didn’t have a rule for it, but we’re gonna stop you right now. And that kind of compliance doesn’t work for companies that are trying to build within guardrails and rules.

And so I do think regulatory clarity is probably the most important thing for the crypto industry today. And what we’re seeing is the politics amongst the multiple regulatory bodies that operate in the financial services system, trying to figure out first what the genuine nature of what each of these products are, and then second, who should regulate it, and then how. I do think they let it get to a scale with no regulation, and I am eagerly looking forward to regulatory oversight that provides clarity to the industry.

So I think we see it already. Companies that were funded in 2020, 2021 have done everything they can to streamline their cash flow burn, and they have used 2022 to try to achieve product market fit. They are now suffering the consequences in many cases of upside down cap tables. And so where you have environments where they’ve raised more than their company is worth, they need do another round that is upside down for current investors, in many cases, they will choose to pursue m and a exits and try to yield an outcome to investors that can be positive.

And a positive outcome in some cases can be a shutdown. It could be a sale. But all of those yield a rationalizing of the market. And given the increase in funding that happens, I think there’s a 10 x increase in funding over the last few years, you will see the rationalizing of this market with companies that just haven’t achieved product market fit. I know we look at a lot of m and a opportunities for Lead Bank. We’d love to buy some technologies that we haven’t built yet.

Where we can find that in companies that haven’t been able to succeed, we would love to bring those founders into our company. So we’re always opportunistic to look at it, and I don’t think we’re alone as someone who is a well funded, highly profitable company in fintech. It’s a really interesting market to be able to look at startups like that that just haven’t been successful.

I do think it’s really hard to build a consumer facing neobank if you don’t truly have an advantage or a use case that is differentiated. Like, today, debit cards are a dime a dozen. There are table stakes for any fintech at this point, and there are only so many beautiful designs. That is a really tough business model to try to gain users, particularly after Apple changed their ad models. I think if you’re solely operating in the digital ad market, you really need to have a unique product that stands out amongst your peers.

And so I do think there are many where I just don’t see the differentiation in the product to truly stay on the time or their features. They’re not companies. They should be integrated into other products that can help build LTV. Because I do think we ended up where people built companies out of features, and I think those will disappear over time.

I think we go through these cycles of bundling and then unbundling. You attack a horizontal, and I’ll use Square as an example. Square attacked a horizontal point of sale. It went all the way across every industry, and they were gonna serve customers with the same product set. And then from that grew a whole series of verticalized solutions. Shopify is one. Stripe is one. Toast is one. And you started to get verticalized products that went after the horizontals. But then you find that the verticals aren’t broad enough from an LTV point of view in order to serve a market.

And again, you start to go into this bundling phase where now as you see people talking about killer apps, like we’re gonna have one consumer app is like many people’s obsession. They’re obsessed because they’re trying to build LTV, particularly in a rising interest rate market where the cost of a lot of products and financial services got more expensive. So you have this idea. Once we get a customer in, we’re gonna sell them a whole series of product and build this super app. And you go through these movements of bundling and bundling across the market.

I first of all, I think you have to start in a place where you have the right to have those products. Not every verticalized solution has the right to be a broad based financial services ecosystem. And so depending on where you start, I think you’ll have an easier or harder time building out multiple products that your customer base wants to use. I don’t see a broad market for super apps. I think there are a few players out there who have shown that they could build multiple use cases around their product.

I gotta go back to Square because I know it so well. Cash App is, to me, the most brilliant example of that. Cash App, at least, has shown that they have multiple verticals that people wanna use with a broad based consumer ecosystem. Nubank in Brazil is another one. Broad based ecosystem of products that consumers wanna use. I do think there are certain companies who’ve shown an ability to do this, but they’re few and far between. And I am not betting on many of these companies starting up today from very narrow vertical solutions to be able to achieve that.

You know, you mentioned two great founders who have incredible consumer instincts, seeing what consumers want and maniacally focusing on it and going after it. I remember in 2017 yeah. It was end of twenty sixteen when Jack wanted to put Bitcoin into Cash App. And he, two engineers, sat on the 6th Floor of fourteen 55 Market and wouldn’t leave the office until they were able to build that product. It was inspiring to watch. Like, he had a point of view about what the future was going to look like with Bitcoin as a part of that, and the power of what that could achieve for consumers, no matter how many naysayers thought it was crazy at the time, he wasn’t leaving the office.

And I do mean that literally until that product was built. I think there’s a power to that kind of conviction in having a hypothesis and building back to it. One of the things I love to do is take a point of view about, okay. So what will the future look like? This is something that we did a lot of at Square. I have a hypothesis about what the future is. This is what I believe to be true. And if that is true, what does that mean today?

And what does that mean that I need to build? And if you have that type of thinking embedded in your product development cycles, I think it helps you add conviction and execution to creative ideas around how you see the future unfolding. Super important to do. You could live in a world where you’re shoulda, coulda, woulda, or you take those ideas and you actually put execution resources against them.

Yeah. That sounds great.

I don’t really have any regrets, to be honest. I look at everything I did wrong as a learning experience. I just look at it as a battle scar. I could regret stupid things that I’ve done. Like, I can remember stupid things I did over my career where I’m embarrassed about my own behavior. I pissed someone off. I said something dumb. I really did something misguided. I think they’re all really minor in the grand scheme of a life. You have to look at the totality of your behavior and just make sure you get better every year.

There are so many things I’ve done with my kids that I regret. But, like, fundamentally, do I believe I’m a good parent? Yes.

I’ve changed my mind on my willingness to try psychedelic drugs. I am so squeaky clean. I think my biggest vice is my obsession with carbohydrates. And I read Michael Pollan’s book, and I am truly inspired by his exploration of psychedelic drugs. And I have not gotten up the courage to really go out there in the way that he did, but I really would like to. Like, I look at what’s happening with PTSD, with veterans, with people who have depression, and I really wanna learn more. And as I said, I’m always someone who wants to learn and do something that’s new, and that is something that I would really like to try.

And because I’ve lived in a very constrained, controlled way, and not intentionally, but I have. I’m like a girl scout. That’s the one area of my life that I really would like to explore.

I don’t think we’ve seen any use case where it has benefited or created a detriment for income inequality. Today, the use case that you’ve seen most prevalent is that around investment speculation. I have yet to see it really move the needle for society. Even in places like El Salvador where you’ve seen governments adopt it as a currency, it really has not created an environment where it is used day in, day out as a core tender type. And I think what crypto means is that around access, and I do think access will create dynamics where it will reduce the number of underbanked people around the world.

But access can be created in lots of different ways even outside of the crypto market.

By the end of twenty twenty four, I think we’ll be in a better place. We’re in a bit of a market of volatility and uncertainty because we have this tale of inflation that has really plagued us for the last few years, and the Federal Reserve trying to control that with a dramatically different raise in interest rates in the way that they have ever done. The slope of the interest rate raise has been extraordinary. And interestingly, we are at a fifty year mark on unemployments. And so there’s this odd moment of uncertainty where the Larry Summers predicted that you needed to have unemployment being at a five or 6% for a persistent number of years in order to bring down inflation.

Yet, we’re at this weird inflection point in the market where that’s not happening, yet inflation is coming down. So I think 2023, we’re still suffering through the uncertainty about whether there’s gonna be a recession, how deep that recession will be. And once we get the uncertainty out of the market of the next two quarters around unemployment, around inflation levels, I think that will start to create a more even market that there’s less uncertainty out there for players in the market.

I am not worried about the state of the economy today. Unemployment is an incredibly successful marker today to watch, and we still have such strong numbers that underpins the success of the economy. There are notes in the market that show weakness. It could be total credit card balances. It could be savings rate levels. It could be auto defaults and things that are starting to mark more debt. But I don’t see widespread fear in the same way that I did a year ago when we were sitting last December that I actually was truly worried about the state of the market because of the signals around inflation.

When the Fed was signaling that inflation was gonna be temporary, I think you had to sit there and look at what was going on in the economy and just scratch your head. They’re like, really? I don’t know how that could be. But I think we’re in a much better place today.

Oh, what I took away from Jack was the power of listening. He is the most extraordinary listener I’ve ever seen. He can sit through meetings and just listen and then synthesize in his own way what he heard or his own point of view in such a simple and powerful way, and I really appreciated that. I think he also has such dignity in the way that he operates. I find it so impressive the way he treats people even that he disagrees with. I think he’s a truly remarkable person, and I will always be inspired by how he lives his life, what he’s built, and I I loved spending time with him.

The final one,

I think Lead Bank will be one of the biggest innovators in fintech infrastructure in the world. And I’m excited about what we’re building across banking products. I’m excited about the customers that we work with. They are a plus plus players in the fintech and crypto market. I think we’re going to continue to change the way banking is operated in The United States. I’d love to be multi country.

I’d love to be deep in compliance banking products so that people could come to us for a full slate of banking services that when they wanna onboard into the banking system in multiple countries, they could come to us and have it be really easy and know that they are working with a partner who will help them build at scale in a way that is existentially safe and sound for their business.

Oh, thank you. Thank you. I’m so happy to be here.