00:36:16 · Jackie Reses
[00:36:16] S0: Oh, it was a disaster. Honestly, the worst job I ever had was being the head of HR at Square. So I ran these financial services products and I ran HR. And the HR job at Square could have been okay, but for the fact that Jack is running Twitter and any time that there was drama at Twitter, which was like every day, you know, people at Square would have a hissy fit about something that was going on at Twitter, but we couldn't do anything about it. Be like, Jack, you know, Laura Loomer locked herself to the office today at Twitter. What are we gonna do? He'd say, what do you mean what are we gonna do? This is Square. He'd be like, I know, but everyone at Square really cares about, like, what's happening a half a block away. And he'd say, like, you know? And so you're literally sitting there with your arms tied behind your back. You don't know what you can say. He won't say anything. And it was almost like, weirdly, Twitter never would be said at Square. And people would talk about some controversy, but we didn't talk about Twitter. And one of the things I found incredibly frustrating was even today, like analysts or reporters will say, Twitter CEO Jack Dorsey reports earnings. And you're like, no, Square reports earnings. You know, Square's CEO or Block now for a long time now. Block's CEO reports earnings, but, like, everyone loved the drama of Twitter. And Twitter was really fun to hang out with in Soho, but Square was where you got the stability and the steady love and the family that, was just steady Eddie over a long period of time. So it was quite the experience, but that conflict of not being able to control what was happening at Twitter was just like an impossible, impossible job. I used to call their head of HR, it was also their CMO, Leslie Berland, who was a friend of mine. Leslie and I would get on the phone on a regular basis and we would have the, oh God, what are we gonna do about this now? And so we had some amazing moments of camaraderie. And the two companies, a lot of the executives thought of ourselves as cousins. So if we would have dinners together, we would have very funny moments of just making fun of Jack because we all considered ourselves like the family. And so that was a really fun experience.
00:38:45 · Jackie Reses, Molly O'Shea
That was actually a more fun experience than just having one company to run, is like the chaos of having this cousin on the side. That is so wild. Yeah, and they got into so much more trouble than we did. It was like being able to look at your hot mess of a sibling and be like, What are you people doing over there? You're always up to something. And we would be dotting our I's and crossing our T's like the financial nerds that we were. [00:39:14] S1: Yeah, you're silently working at your desk, and then you open the door, you go over there, and everyone's screaming at each other. [00:39:19] S0: Well, silently working, but we're making debit cards and point of sale systems and loan products. They're in the sexy hot mechs of American and global culture. And we're talking about whether our debit card has our logo on the front or the back and how thick the metal is. It was like the contrast couldn't have been more extreme between the two companies. Even our executives, we were such nerds compared to them. They were like the cool kids, a half a block down the street. And even in technical jobs, somehow they always seemed to be much cooler than the Square execs were. [00:40:03] S1: I guess maybe that's a good way to ask. So as you've seen through different tech cycles and through many different lenses of companies, how do you discern through hype and then also durable innovation over time?
00:40:20 · Jackie Reses
[00:40:20] S0: Oh my god, there's so much hype. Interestingly, being involved in the crypto business, because we're one of the most active banks in the crypto industry. We operate in an industry that feels like hype and momentum is kind of the underbelly that has kind of catapulted the industry from 2009 when Satoshi wrote the white paper all the way through to today, where it's a multi trillion dollar established set of industries on a global basis. And I think the characteristic that I look for mostly in crypto products, and I think the discerning kind of framework to look at for hype in general is like, is there a real use case? Like, does this product actually add durable value? There's so many things in my industry where you kind of have to scratch your head and say like, yeah, but I don't understand why that makes something better. Like, is this better? Or is it just like a different version of doing that? Because if it's not making an experience better, a product better, I'm not quite sure why there would be product market fit for that experience. And I think AI is at one end of the spectrum where the mass adoption, I think, makes it so obvious to see where there's value being created and people are using these tools to really change the world. And then crypto is somewhere in the middle where you have big parts of crypto that have lots of hype and momentum attached to it and less of a durable use case. And I think we're really starting to see a breakout between those products and crypto, for example, where there is a use case and durability, and those products which won't stand the test of time. And so I think the framework that I've applied to crypto is probably the same that I'd apply to any other product.
00:42:21 · Molly O'Shea
[00:42:21] S1: What did you think about the debanking situation that was going on?
00:42:24 · Jackie Reses
[00:42:24] S0: Okay, I don't believe there was debanking. I think it's a crack of shit. I think it's an absolute crack of shit. Let me just say this. There's 5,000 banks in The United States. We have a lot of red states. Are you telling me that in lots of red states, including where my company is headquartered, which is Kansas City, Missouri, those banks were not willing to bank, for example, conservative companies? I think you have to believe that that's not true. That's one piece of the debanking argument. Second piece of the debanking argument, you can't bank crypto companies in the 2022, 2023, 2024 framework time period. Well, let's think about this. There are lots of crypto VC firms. When those VC firms were wiring money into the portfolio companies that they were investing in, were they bringing it in a wheelbarrow of cash? Or was it being wired to somebody's bank account? I think I heard bank account. And so as we go and fund crypto companies of that era, they were being funneled into bank accounts. Now, it might not be the banks that everybody wanted to use, but there were plenty of banks that were funding and supporting the corporate accounts of all of these companies. And so then you have to ask yourself, well, were these companies actually getting debanked? So let me tell you what was happening. So what debanking actually means is that banks transitioned out of offering crypto products or risky products like adult entertainment or something like that. Why did they choose to do that? They either didn't have enough density in their client base, the juice wasn't worth the squeeze. Like, you don't have enough density of clients, so you don't go hire specialist compliance teams. You don't go hire specialist finance teams. That yields you pulling back from an industry. You go, it's just not worth it for me. I don't have enough clients. That was one thing that happened. That's legit. That happened to lots of companies, but that is not systematically debanking. That's choosing not to invest in the industry. The second thing that happened is that there was an era when digital asset companies were less mature. Some of them had chosen not to pursue all of the legal and regulatory issues that you need in order to comply with banking regulations. If you're not gonna comply with US banking regulations, guess what?
00:45:05 · Jackie Reses
You're not gonna be able to keep your account at every bank. And so a lot of companies, depending on what they were building, the infrastructure that they were building, there were parts of that infrastructure components that like wouldn't have met a KYC standard. KYC is know your customer. And those clients were removed from that bank's system. So they were technically debanked. But if you're not willing to follow some of those KYC requirements, I'm not sure you should be banked. And so there's lots of logic as to why that happened. And then there might be cases where a bank just decides to not include executives in a particular industry, or they choose, they don't want the risk associated with something. That is their prerogative, and banks can make decisions based on their own reputational risk. Now, whether we all see reputational risk in the same lens, I think that's up for judgmental debate. But thankfully, you have 50 states and 5,000 banks. And there are plenty of people who would take a pro and a con of each side of those judgments and be able to offer services to many of those people who say that they were excluded from the banking system.