00:15:38 · Jackie Reses, Molly O'Shea
[00:15:38] S0: Yeah, so Goldman was amazing and I had a few twists and turns at Goldman. I invested at Goldman, which was super fun. I worked in equity capital markets for a stint for this legendary executive and management committee member named Eric Dobkin. And, you know, I had just such an amazing experience there, but I wanted to invest on my own. I was always really entrepreneurial. So like my fear with Goldman was that if I stayed there, I'd never leave. Like at the time it was private, and it was an amazing place to work, but I had to go pursue this entrepreneurial dream. And so I ended up at Apex and I founded the media group and there were great investors there like Orin Zeff, who's actually one of my current investors in my company who led the tech group. And we went and tried to build, you know, a media technology practice. And so at least I had this entrepreneurial opportunity within the context of a broader private equity firm. I think private equity at the time was interesting, but didn't satisfy the itch. And I really was entrepreneurial. And my entire life, I just really wanted to own my own company. Like I always had this dream that I wanted to like own the wire hanger company or the box company, Like something that no one really knew. I mean, I guess I own a bank now, so maybe I've achieved that. [00:17:12] S1: I think you I may
00:17:14 · Jackie Reses
[00:17:14] S0: just thought, Oh my God, that's gonna be cool. You own this thing that's just so institutional. And so I wanted to be an operator. And so when I went to Yahoo, I was very lucky to transition from deep finance to tech. And even though I had run my own teams in finance, that's a really hard transition to make, and very few people have actually made it at senior levels. And so when I moved to Yahoo, the first job I was offered was the head of HR. And that to me was like a total head scratcher. And I remember thinking like, why in the name of God would anybody hire me to be the head of HR at a tech company? And when I was flying out to California and thinking about it, I was like, what about what I am good at screams HR? This makes no sense. And the more I thought about it, the more I realized that I actually had the skills from private equity. This is like an abstraction, like step back and say like, what's a private equity executive good at? So they're good at legal, finance, accounting, tax, structuring, all like the very pragmatic skills that actually get the deal done. That's great. You also get people who are more junior than you to do those things the more senior you get. So they're executable. Now in the world of AI, they're all really executable. The part that is not executable, though, is the judgment part. Like you're sitting in a boardroom, you own a company, and you and a CEO and the board are trying to sort levers of growth. And so when you're evaluating how to go build a company, you're looking at capital allocation. Capital allocation comes in the form of people, and it comes in the form of dollars. And so you have to go figure out what businesses are gonna grow, and how you're gonna build the people and teams to allocate to those businesses in order to supercharge them. That is something that someone in HR could be really good at. So when I was going to Yahoo, Marissa had said to me, well, now that you're coming, you can't come and not run M and A. You can't come and not run BD. There were things that were obvious that my background led to. And so before I even started, I ended up with a whole series of teams that led me to become the chief development officer versus the head of HR. And that function ran a search affiliate business. It was like a third of Yahoo's revenue, but that revenue was deal driven.
00:20:03 · Jackie Reses
Okay, I've done deals my entire career. That makes sense. Running BD and M and A, well, that's all deal driven. Running HR. HR in the context of Yahoo was deeply driven by restructuring, if you go back to that era of Marissa when we were restructuring the company. And so ironically, it led to kind of a skill match around the HR side. And so people don't think of HR as an operational job, it really is. And I ended up restructuring the company and helping to refactor and reorient different businesses and put leaders in there that were the best leaders for the types of growth that we needed to achieve in each of those businesses. We bought a bunch of things, you know, we divested of some assets. Then we took Alibaba public, which was a capital transaction that was just monumental at the time and unprecedented for a US public company. And so those are the types of things that were logical for someone with my background to do. It also gave me product experience because I got to go build the search affiliate business for Yahoo. So that was a great training ground in order to learn how to go build products.
00:21:23 · Molly O'Shea
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00:22:53 · Jackie Reses
[00:22:53] S0: I guess just to peel back on Yahoo a bit, for those who don't know the lore and the deep history of Yahoo, what was going on at this point in time? So, it was a hot mess at this point in time. And there were multiple CEOs. There was an activist investor who had come in and demanded Alibaba be divested. And the core business was struggling at best. And it was a company that had not invested in mobile products at all. So you can imagine their apps on an Apple device, yet they hadn't really built out the quality of those apps and the breadth of those apps based on Yahoo's core product offering. And so they had mail, they had search, and they'd just done terrible search deals, where they'd basically given up the search business with what I describe as without gaining any terminal value for it. So they did a BD deal, otherwise known as they didn't sell it, so they didn't get multiple for it. And so they had to go figure out business by business how to maximize value. There was Yahoo Finance, Yahoo Sports, Yahoo Homepage, Mail. And so all of those assets needed to be shined, built more as a mobile first orientation. And then the Asian assets, so Alibaba and Yahoo! Japan, had to be sold, restructured. And in the case of Alibaba, where we were being forced to sell a huge part of the stake at a discount, my goal was to go recapture some of that equity. And so without any ability legally to go do that, I set out on a path to go try to get some of Yahoo's equity value back and pull back from some of these deals that were done before we got there. The whole thing was like a hot mess. Everywhere you look, there was like challenges across the business lines. And Marissa focused on the core business, and I focused on Alibaba, Yahoo! Japan, and then some of the deal mechanics and tax mechanics, which were, if you recall, some of the biggest challenges the company was facing around the tax bill associated with the Alibaba stake. That also, it was pretty unprecedented. I think it was gonna be one of the largest tax bills ever paid in corporate history. It was pretty surreal from a cap gains tax point of view. Okay, so the deal that you worked on, didn't that lead to 40 to 50,000,000,000 in equity value? Well, we took Alibaba public, so that yielded incredible value to Yahoo shareholders. That was a deal Jerry did.
00:25:48 · Jackie Reses
And what I ended up doing was pulling back billions of dollars of equity that we were gonna be forced to sell, that we were not forced to sell after doing different transactions, and then executing a deal between Alibaba and Alipay that helped pull back, again, tens of millions of dollars of value back to Alibaba shareholders. And so the sum value of that was pretty phenomenal. And I think it's because of the growth of both Alibaba and Alipay that we were able to recapture tens of billions of dollars of value. Was pretty unprecedented at the time. How does this then lead you to Square and Jack Dorsey? Jack's the best. So I was working at Yahoo, and out of the blue one day, I get a phone call from Jack who said, I've heard about you and I understand you run HR at Yahoo. Can you explain that to me? I was like, I don't understand this phone call. It was so funny to just get a phone call and ask about my job. And so we talked multiple times about what it was like to run HR as an operating person and not a traditional HR person. And that was a model that hadn't been used that much within Silicon Valley. And he was really curious about it because he thought that HR should have more of an operational bent to it than a lot of traditional HR leaders deployed. And I think he also trusted the function as an advisor. You know, at the time I called, when I ended up going there eventually, and I felt like I was more of an advisor than a business advisor than, you know, what a traditional HR person would do. And so he asked me whether I would come to Square. And at the time it was before the Alibaba IPO, and I didn't think I could leave before the Alibaba IPO. And so I felt like my job wasn't done at Yahoo. So I waited for the Alibaba IPO. It was amazing. Then we reconnected, and I ended up where I was in the middle of this huge tax transaction for Yahoo. There was a massive capital gains tax bill, and I was tasked with trying to solve how to manage that. And the complexity of that, again, was just unprecedented. And so I set out with lawyers you know, like five different countries to go figure out how to solve this massive tax problem. And it was a really cool problem. And when faced with something that's pretty unprecedented and hairy, like I run straight into that fire. It was like, it had my name all over it.