STACEY CUNNINGHAM

>> Craig Gould: Stacey Cunningham, thank you so much for joining me this week on the podcast. Stacey you are the former president of the New York Stock Exchange. You’re currently still on the board of the exchange. And I wanted to talk to you today about your leadership journey insights on topics like leadership strategy, culture, innovation. But I like to start these conversations with kind of going back and asking people where was their first job? And I’ve had lots of interesting answers about bagging groceries and you know, milking cows. But Stacey where, where was your first job?

>> Stacey Cunningham: Well, first off, Craig, thanks for having me and I guess I’ll skip over the Kool Aid stand and the babysitting, jobs. My first paycheck where I received a printed paycheck was at a sporting goods store in my hometown. So I was still in high school but working, working at a sporting goods store after school and on weekends.

>> Craig Gould: So were you into sports when. Nope. No.

>> Stacey Cunningham: No, that’ll be a theme for me. I just go try, try different things. It was, it was, you know, I, my first job, like many of my jobs found me versus the other way around. And so it was something that, that came up as an opportunity and I said, sure, I’ll, I’ll, I’ll go do that just to make some extra cash. then my, my first full time job was working on the trading floor of the New York Stock Exchange as a summer intern. That also was, was not something that I went looking for but, but found me, which is a, yeah, I actually was looking for a job waitressing and no one would hire me because I didn’t have any prior waitressing experience. And so I was a very cliche moment, but had a family. My father was in the industry and he said, well, maybe we can find someone that can help you get a summer job. And so I Worked for summers on the trading floor and that was the beginning of what was to come.

>> Craig Gould: Wow. One of my previous guests just a couple of weeks ago was, former chief strategy officer for a food service company and her first job, she was working back of house at a restaurant. Even though she wanted to work front of house, but because she was a brunette, she had to work the salad line instead of being a host.

>> Stacey Cunningham: Oh my goodness, that beats me. But I really think I would have been great. And I guess I think even then I was interested in waitressing because I’ve always, I’ve always had a passion for food and culinary arts and those types of things, but it was, I would have been a fantastic waitress. They really missed out.

>> Craig Gould: But, you, you wound up utilizing your, your people skills in lots of different ways. So. Yes, way, way beyond waitressing. So your, your dad had experience, you know, as a trader, right? Is that where that job found you?

>> Stacey Cunningham: Not. No, not really. Other than the fact that he did, suggest that perhaps I might try the internship, but I was not attracted to the industry. In fact, I didn’t expect I would like it. I really thought of it as just a summer job. And you know, it was less popular in that time back in the mid-90s to have full blown internships the way many college students are doing today. It just wasn’t quite the same process. So when I, when I ended up going to the trading floor, I just thought, this is going to be one summer and over. And as soon as I got down there, I was shocked by what I found and how much I loved it because my father never talked about what he did for a living. I remember going home after the first day and saying, why didn’t you tell me that this existed out there? And it was so amazing, amazing. And it was so much fun. And, I think he thought to himself, oh.

What attracted you to trading floors as a college student

>> Craig Gould: So, so what was it that attracted you? was it. I don’t want to put words in your mouth, but I imagine there’s a certain amount of energy on the floor that just can’t be. You’re not going to find anywhere.

>> Stacey Cunningham: Yeah, there, there is an energy. The, the pace is very interesting to me. You know, attractive to me that things moved really, really very quickly. And that’s just the way, you know, people always tell me that I talk too quickly. And so it worked well for me on the trading floor because everybody talked, talked pretty quickly. The camaraderie in the floor, the community was a lot of fun there. They also shared a passion for food on the Trading floor. So. So we focused a lot on eating. And, you know, in the beginning, it was. It was more fun for me. And I didn’t. I didn’t understand that trading floors were like that. And that energy existed as, as my, As I evolved throughout my career, I started to realize the purpose of what was happening and what we were actually doing down there, which became really attractive to m. Me later on. But it was just fun as a college kid going down and just kind of seeing that. That pace. I also am a bit of a procrastinator, and so it was a healthy environment for me because there, every moment was the last moment. You always had to work as quickly as you could. And so, you know, it’s not too dissimilar from a restaurant kitchen to go back to that. And you see those similarities there. And that suited me very well to just think, I got to go in and do. Do as much as I can do as quickly as possible. And at the end of the day, call it a day.

Was it an open environment or were you still demanding respect from people

>> Craig Gould: I don’t want our conversation to revolve around gender, but, you know, I do have a question, because the first female on the trading floor was only like, 20 years before you started working there. Was it an open environment, or were you still, you know, having to demand respect from people?

>> Stacey Cunningham: I feel like I can answer that question differently now, with the benefit of hindsight, than I may have answered it back at the time. And you mentioned Muriel Siebert was the first woman who was a member of the New York Stock Exchange. She became a member in 1967. So it only took 175 years to get one woman to be a member at the New York Stock Exchange. And it wasn’t easy for her. When I got down to the New York Stock Exchange in the early 90s, I didn’t. I didn’t know Muriel Siebert’s name. I mean, I probably should have because she, she was a force on Wall Street. But like I said, I wasn’t. I wasn’t into finance when I got down there. So I didn’t even appreciate what she had accomplished and what she had done by. By breaking open those. Those. Those doors to women. But she had such a profound impact on my career because I never would have been able to show up down there without thinking about the fact that I was a woman. And I didn’t think about it. I knew I was outnumbered. I knew there were more men on the floor. For my own personal experience, it worked in my favor. And I think a lot of times being outnumbered has Pros and cons. And if you can find a way to emphasize the pros and minimize the cons, then it becomes an asset instead of a weakness. And I had a higher profile than many of the men on the trading floor because people noticed when I walked up there just weren’t that many women around. And so you, you were much more to gain somebody’s attention and get help from them and learn. And so I, by the end of my first summer, I was actually doing some of the job that full time employees would do. And I don’t know that that would have happened if people just didn’t notice me right away. Maybe, maybe it’s my personality because I wanted to. Hard to say.

>> Craig Gould: Yeah, I mean, it’s interesting because, I mean, there are lots of opportunities for people to see your successes, but that also means that people could have also been looking to scrutinize you also.

>> Stacey Cunningham: Yeah, they, they do. And, and there, there was, there’s noise and, and I remember talking to my brother at some point in time about how I just never experienced the fact that my, I was a woman being tough down there. And he said, yeah, you did. You just tuned it out. And I did. And so I think if you can, and I guess that’s what I refer to as minimizing the cons. You know, if you can tune out the noise. And not that anyone should have to do that. But I’m only helping myself if I can. Right. So if I can find a way to minimize. I did not have aggressive behavior that I had to deal with. I will say I by and large was treated with respect and helped. And so my experience was very, very positive. I could probably count on one hand the times where I felt like, wow, that person really thought of me differently and treated me differently because I’m a woman in a, in a negative way and I still know their names.

You spent 10 years on the floor and then there was a break

>> Craig Gould: So you spent 10 years on the floor and then there was a break. Can you talk a little bit about that period in your life and what you chose to do and why you chose to do what you did and you know, what were the benefits and what you carry with you from that time?

>> Stacey Cunningham: Sure. Like I said, I loved the trading floor from the moment I got down there. And so those 10 years I learned so much and I really loved the environment. But there comes a time where you reflect on where you are and where things are heading and whether or not it’s still the right place for you to be. And at that moment in time, while I still loved the New York Stock Exchange. It was clear to me that there were elements of technology, adoption of change, resistance that was prevalent. And it felt to me that it wasn’t the right place for me anymore. And there was a, movement at the time. There were new leadership coming into the exchange. They wanted to make broad based changes and there was so much resistance to that change. And it’s a theme that we see all the time. I’m going to see it right now with AI. People are scared of AI and what it’s going to do to their job. Instead of thinking, God, how can I use this to my advantage and make myself even more indispensable. That was what was happening on the trading floor. There was so much resistance to using technology to make us stronger that it, it, it felt like the right time for me to go look for the next thing. And, and by the time I finally decided to actually leave, I, I wasn’t sure what that was. And I find I can think about that better when I’m not in the middle of doing something. And so I took some time off. I decided to go to culinary school because I just, I knew I would enjoy it. I love to eat. I figured I’m always going to love to eat. It’s a skill that I’m, that’s not going to go to waste and I’m just going to do that for fun. Now there are tons of magazine articles that, that talk about the fact that I went to go become a professional chef. And that actually was never the plan. It really always was just a break. And, and I, I do that and I have done that throughout my career when I’m ready for a change. I find for me personally, and this isn’t the same for everybody that it’s, if I ha, if I can afford to take some time to myself, I’d like to do it. I don’t think we’re promised time on the back end. I love to travel, I love to see the world. And when I’m working, I’m kind of all in. I’m not great about work, life, balance. So the way I balance it is when I’m in between things, I try to take some time for myself and learn something new. So that break was all about culinary school.

>> Craig Gould: It’s interesting because I think for a lot of people, at that age, in those circumstances, they would have thought about going to business school. But maybe the clutter of all of that learning and pouring yourself into business school wasn’t what you needed. Maybe you needed to catch Your breath from 10 years on the floor.

>> Stacey Cunningham: Yeah. And just find a passion. I mean it comes back a little bit to what, you know, what, what do you love to do and why, why are you doing what you’re doing every day? And those, those things. I think about that a lot. I think about what goes into your job satisfaction. And I sort of evolved how I think about those things based on my own personal experiences and where I felt most excited about what I was doing. And so I have a whole theory on what drives us in work. And I think it’s important to take time to just have fun too.

>> Craig Gould: So what is the theory? What do you think now that you’ve had some time to sort things out? Because you know, even before we were recording, you know, I was telling you about how I’ve thought in recent years about passions versus strengths and how do you apply yourself and where do you get the most satisfaction?

Different people value different components m more than others

So what is the theory?

>> Stacey Cunningham: So I think there are a number of contributing factors that go into job satisfaction and I think they’re generally the same things for everybody, but different people value different components m more than others. And so I think of it like a graphic equalizer and you can turn up the base and turn down the, you know, you sort of adjust it for, for your own preferences. But I think that’s contributing value being valued, which is not the same thing. Just enjoying the work. So you talk about art or passion, then that must be really high for someone who’s an artist that they just absolutely love the art or the camaraderie. The people that you work with, learning and growing kind of all put that into just enjoying the, the day. Work, life, balance, compensation, power and prestige is sort of the lat. The sixth one. And I think everyone has their own ideal mix. So somebody who really wants to be a public states person, perhaps power and prestige is high for them and they’re willing to take other trade offs in order to get that. I think you can work outside of your own ideal mix but not for very long. And so if you don’t actually enjoy the work or you don’t feel like you’re valued or contributing value, if those things are important to you, you’re going to find yourself pulling back. And so that’s where I think, you know, for me personally, being valued and contributing value are important to me. I’ve had jobs where I didn’t have that much work to do and they were paying me to come in and not really do anything. It was my least favorite year of work Because I wasn’t giving it, bringing any value to the table, and that’s not rewarding for me. So I want to know that I’m contributing something, and that’s what I feel really good about. And so just going through that and finding that perfect mix is fine. And like I said, you can work in a role outside of that perfect mix, but after some amount of time, you’re going to start thinking about where are you going to go next? Because m. Maybe somebody can, extend it by paying you a lot more money or giving you so much flexibility that you can have a home life that’s more, you know, that you prefer. But usually over time, you’re going to want to get back to what your, what your ideal mix is.

>> Craig Gould: Well, just hearing you say that, it just makes me think that it’s hard enough for us to figure that out for ourselves. But, you know, when you’re a leader, you may have to figure that out for members of your team. You can’t figure out, why they’re not being more productive or why they’re unhappy. And trying to figure out whether this person is in the wrong role or they’re not climbing higher up on Maslow’s hierarchy of needs because of whatever their role is. It’s. It’s hard trying to do that for yourself, much less for trying to identify that in other members of your team.

>> Stacey Cunningham: Yeah, yeah, I think that’s really important. that’s something I would say I’m lucky enough to do pretty well, is to recognize where, where do individuals on my team. And this is, this is where I think the individual becomes unique from the rest of the team because different people are driven by different things. So if you can not only know that for yourself, but start to recognize, how can I motivate this person who has so much to bring to the table? What, where can I make them a better version of themselves and really excited to be here? Then you’re getting the most out of the team. And frankly, that’s what I saw my job as doing, is putting my team together and figuring out how to make them the most successful that they could be. That meant hiring people better than me, hiring people with skills I don’t have, and setting them up for success, and to set them up for success. It doesn’t look the same for everybody. that’s not something that I always saw throughout my career, that acknowledgement that different people need different things, different employees need different things to be really successful. It’s a little bit of a softer side of Skills, I don’t think I saw that on the trading floor a whole lot. So their communication styles in companies, certainly on the floor, that were pretty consistent across the board. And I think that’s one of the reasons why you do see fewer women in senior roles. Because you need to have a different conversation more often with women to convince them to take opportunities. Obviously, I’m generalizing. It’s not always the case, but it is often the case case that women will turn down opportunities if they think that it’s going to be too hard to accomplish at home or, you know, as well as what they’re doing at home, or it’s, it’s, they don’t have all the skills they need to do and problem solving that out with them and saying, hey, I think you’d be great in this role. Let’s, let’s talk about how what we need to do to make it happen is so much more effective than just throwing out one, you know, one, idea for a promotion. And, you know, maybe they raise their hand and maybe they don’t.

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When you first went to NASDAQ, your role was focused on customer outreach

Now back to our conversation.

>> Craig Gould: 2007, you go to NASDAQ and so when you go to NASDAQ, what does that role look like? are you. Because, I know that in my mind, technology becomes a bigger and bigger part of what you bring to the table. What was the role at nasdaq?

>> Stacey Cunningham: My initial role at Nasdaq was part of a team that worked with constituents and stakeholders that weren’t direct NASDAQ clients, but they were influencers of NASDAQ clients. I wasn’t in that role for very long. just about a year. I did reference a role where I didn’t have a lot to do every Day. But anyway, so I, I shifted into a different role and that was working with the, client facing teams for their trading customers. So the large customers that were trading on Nasdaq, our job was to try and get them to trade more. And so having an understanding of what the differences were for different markets, New New York Stock Exchange, nasdaq. So they’re, you know, many equity exchanges out there that are trading and people don’t always realize that. I think they very often think if a stock is listed on nasdaq, it’s traded on Nasdaq, or if it’s listed on the New York Stock Exchanges, traded there. And largely in part because of regulation changes that came about right in 2007, that changed. And so trading became much more competitive. And it occurs not only across 16 different exchanges, but lots of other places outside of the exchange space as well. And so we were competing for that order flow and to grow that, that overall market share, which was the first time I actually worked in the exchange for an exchange itself. So when I worked at the New York Stock Exchange, I was on the trading floor, I was working for a trading firm, wasn’t an employee of the New York Stock Exchange. So my background was really trading for that first 10 years that then when I worked at Nasdaq, it was really on the customer side of the, for the exchange and understanding what do people who are trading on the exchanges need and how can we help them? How can we change our products and services to attract more of that activity with us?

>> Craig Gould: So how did that prepare you for the next step?

>> Stacey Cunningham: Well, what I found is that in conversations with our customers, so many of what they did want in order to trade more effectively with us was technology advancements. so I found myself sitting in the room with the technologists a lot of times trying to figure out, well, you’re saying we can’t deliver this thing that, my customer wants, why can’t we do it? And I found that going between different product teams and technology teams and trying to figure out what the blockers were that was preventing us from introducing new things. If I could solve those problems, then I could go back to my customer and say, fine, we can do this. And I loved that aspect of it. So I really liked the engaging with the teams which, unknowingly, prepared me for. When I was at NYC and later went on to become the chief operating officer and led our technology replatforming, I had very strong opinions on what that should look like because I had spent so much time and Energy trying to figure out how do we develop new things for our customers and balance being really nimble so that we could have a simple technology system that allows us to make changes quickly but feature rich at the same time. And there’s a balance. Right. If you can only do one thing, you do it really well and it never breaks because it’s so simple, that’s great. But if your customers want it to do some other things, then you need to introduce some complexity. But you don’t want to go too far down that spectrum either. And so that, that balance is so important when you’re running the world’s markets. They need to, they need to be pretty simple in order to operate effectively all the time. And that’s really important and top of mind. So finding that, that sweet spot is something I just enjoy doing.

>> Craig Gould: There’s a saying that I’ve kind of held onto over the years, which is change only occurs when the pain of not changing exceeds the pain of changing.

When you rejoined in 2012, there was some resistance to technology

I feel like that’s kind of where you stepped back into NYSE in 2012. Right. Within a week and a half of you joining the exchange was acquired by ice. You spoke about your first tenure at nyse, how there was kind of a, disconnect between the people in technology. When you rejoined in 2012, it sounds like the time was right to rectify that.

>> Stacey Cunningham: Yes. And when I talked about it the first time, a lot of that was people in the trading floor community who were nervous about adopting technology in a way that might make them irrelevant. And so there was some resistance to technology. There’s always been technology advancements at the New York Stock Exchange going back to the beginning of our, you know, 230 year old history. The, the I mean we have a letter hanging on the wall from Thomas Edison who said, I have this new technology, it’s going to be great. I want the New York Stock Exchange to use it, I’ll pay for it, but I just want to see it. And that was the ticker tape. You know, he. So there was always new things coming. That wasn’t so much the issue at the time, it was one, the resistance from, from the users of that technology and also the the way it was integrated with what was happening. And so technology was side by side with people. Instead of finding it so that the faster the technology got, the harder it was to keep up with it as a human being. Instead of really integrating it in a way where it made the people stronger, we became the weak link. When I was on the trading floor because we just couldn’t operate any faster. What we saw change was really largely a little bit of a shove from the regulations. That said it’s going to be competitive now. We had to make sure that we had the right tech to compete. So when, the New York Stock Exchange reached out to see if I’d be willing to come over there, I mean, I grew up there, I loved the nyse. And their message was, we’re really reinventing this place, come be part of that team. Which was very exciting for me. What I didn’t realize was that the pace was probably not going to be so exciting for me. I, was lucky, frankly, that ICE came in and acquired the New York Stock Exchange because we had a much easier time very quickly renovating what we were doing at the exchange and evolving it as part of a much bigger company. So when the NYC was now only a part of ice. You know, one of the challenges of being a public company is you have quarterly earnings reports and you need to, you need to make sure that you’re ready to tell that, Tell, your investors what you’ve accomplished the quarter. And if you’re spending a lot of time ripping out all your technology, it can be a challenge to navigate. So we had the, the air cover and the support of Jess Brecker, the founder and chair and CEO of ice, saying, go ahead, do what you need to do to do the hard work to really get this where we want it to go. And I could not have asked for a better opportunity. And, that’s, you know, you talk about sayings around change, and I feel so strongly that periods of change have the greatest opportunities, and it depends on how you react to them. So if you look at change and you think that this is a bad thing and you resist it, you’re more likely hurting yourself than if you say, wow, this is a great thing. Yes. It’s not what I thought. It’s a little bit uncomfortable. And I’m doing things, you know, things are happening in a way that wasn’t what I expected. Like, I just quit my job and 10 days later we were getting acquired. It was, it was really, it was really a wonderful time to take the opportunity to sit back and say, I now have support of a large organization saying that we can really turn this into what, what we think it can be. And, you know, that takes taking a step back and saying, what do we do? Well, let’s invest in that and do that more. What do we, what are we not doing that we ought to be doing? And what are we doing that we’ve just been doing for 200 years and we can stop doing it, you know. And so the thinking about your business that way, I think is a helpful exercise. And it’s really easy to do that at a moment of an acquisition or a corporate action like that. It’s harder to do it every day. But you need to find reasons to take that step back and say, ask yourself the question, like, should we still be doing what we’re doing and are we focusing our energy in the right place? And so that was, I feel, very fortunate. I think every good career, every successful career has an element of luck. And that, that timing was very lucky for me.

>> Craig Gould: Well, I would imagine that, a lot of those changes involved more electronic trading. And by the end of the decade, that was a crucial part of the market being able to continue operations during the pandemic.

How do you prepare for a Black Swan event like that

Can you talk a little bit about how do you prepare for a Black Swan event like that?

>> Stacey Cunningham: Yeah, well, you have to be prepared for what is unexpected all of the time in that, in that space. Right. If you’re in the financial markets, no one, no one calls you and says, next week we’re going to have a crisis. Make sure your systems are ready to scale up. You don’t know when it’s coming. You never know when it’s coming. And so you have to be ready for anything to occur. And when you do have market events that are major market events, like what we saw in the early days of the pandemic, we’re not talking about volume spikes that increase 20 or 40%. We’re talking about three times, four times what your busiest days ever looked like. And so you really need to have a technology platform that can scale at will market volumes, including, you know, how many different messages that an exchange is receiving, throughout the day to buy, order, sell, sell orders, canceling prices, changing, all those things are processed even if it doesn’t result in a trade. There’s half a trillion messages on a busy day that the exchange is processing. So that’s being ready for that is really important also you have to be ready for things like business continuity plans and running remotely. We didn’t expect, when we were doing all of the work to plan for those scenario planning events that we were going to be closing the trading floor in 2020, having three times our record volume at level activity, everything happened all at once. Every tool we had of the box we had to pull out and use. And it all worked. And when people look back and they say, you Know what are you most proud of? It’s that we did the work. Even when you weren’t sure it was going to happen, it’s fun to work on a new product and launch it. You know, you’re going to launch it, you see what’s going to happen. It’s not as much fun to work on business continuity planning, you know, but it’s really important that it works when you need it. And I’ll never forget one meeting I was sitting in. We had a weekend test where the whole industry is supposed to come in and test these, some of these circuit breakers that would stop the market if it falls 7% and no one was showing up for them, you know. And so I said, I said to the team, this better work if we ever need it because people are counting on us to maintain investor confidence during a time of stress. So we actually changed our rules to require customers to show up to that test. And they did. And then I felt really good about that when we triggered a market wide circuit breaker. And it actually worked the way it was supposed to work because people had actually tested it. And it’s not the most fun projects, but they’re just as important.

The New York Stock Exchange appreciates the human capital more than ever

>> Craig Gould: Can you talk about how on the backside of that did you learn to appreciate the human capital in a new way? Having seen the technology implemented, I always.

>> Stacey Cunningham: Appreciated the human capital and I believe that’s one of the strongest differentiators of the New York Stock Exchange Exchange because regardless of how sophisticated our technology is, is. And when we, when we replatform the, the New York Stock Exchange and all of the equities and options exchanges that the NYC runs, it’s the most sophisticated trading platform, most scalable trading platform that exists, among exchanges. And when we, when we rolled that out and so it was very sophisticated but at the same time we still have people who are engaging with it now in a way. And I talked a little bit earlier about how that there’s a difference between technology and people side by side and integration. So the traders on the floor are using algorithms to trade. They’re not matching buyers and sellers the same way I was when I was working on the trading floor back in the 90s. But they’re using technology and they can adjust that technology based on market conditions. Not too dissimilar from the airline pilot who is, you know, planes can fly themselves, but you have a pilot at takeoff, landing, and when there’s periods of turbulence, they’re more engaged and more involved in really steering that ship. And that’s how it Works on the trading floor. We had a very unusual unexpected event when we closed the trading floor because we could now measure the difference to see what is it when the people are not actually there, how does that change? And so what we saw was our stocks still traded with less volatility because of the way our market model is designed in that every stock listed on the New York Stock Exchange has a market maker who’s responsible for trading their stock. When that was remote, we saw a difference. So stocks were more volatile but still better than the competitive landscape. And so you get to see the value of the human beings and they applied human judgment. I mean I’ll never forget there was a day in the early days of the pandemic when then President Trump had announced refilling the oil reserves. Right. Going into the market close. And, and there were spikes in, in trading that really was just because the market was about to close that we saw that it was one sided because people couldn’t come in and provide the other side of that trade. And so the people on the trading floor said well wait a minute, this doesn’t make sense. Like there, there are people who would come in and sell if it wasn’t 4:00. And so they applied human judgment and those stocks closed without volatility. So it was really that human capital is so important. And we definitely saw that during the pandemic. And I couldn’t be prouder of not just the New York Stock Exchange team, but the entire industry for really rising to the challenges that we faced.

Spotify wanted to do a direct listing, but SEC wasn’t comfortable

>> Craig Gould: That brings to mind, another time when the answer could have easily been no. And that’s when Spotify wanted to do a direct listing. Can you talk about working with them and figuring out what it meant for a company to do a direct listing? And you know, because I imagine at the point that they started talking about it, you were probably the chief operating officer, Right. And so you were probably in those conversations, correct?

>> Stacey Cunningham: Yes. And I will say it, I was a little scared because it’s unknown. And when you think about trying something new and removing parts of the equation that are long tried and true and trusted, it can be a little bit scary. It was exciting to work on it with them and think about, well, how do we solve for those risks? How do we figure out what this is going to look like? And I mean it was a year and a half before they finally went public based on when they first came up with the idea. And it was really driven by Barry McCarthy and Daniel Ek from M Spotify. Daniel’s CEO and Barry’s the CFO. And it was, I think, very brave of them to think about how do we go public in a different way? Because the reason we’re going public has changed from what the norm used to be. So when companies would go public and, you know, that’s what the New York Stock Exchange does, helps companies raise money so they can go out and change the world. And companies would go public primarily to raise capital. And then they had these secondary and tertiary benefits like liquidity for their early investors and employees, currency, so they can use their stock shares as, for M and A. the credibility and profile of a public listing could certainly help enterprise tech companies and raise their brand awareness. Those were secondary and tertiary benefits. Given the size of the private markets, those were. Raising capital isn’t the primary benefit anymore. You can raise capital in lots of other places now. Those reasons became the primary reason. So for Spotify, they wanted liquidity and they wanted currency. And they asked themselves, well, why should we sell stock at an IPO when we’re actually not trying to raise capital? And it’s a great. I very, very often viewed as a great IPO when your stock pops 100% on the first day. But if you ask Barry, he’ll say, not if you’re the one that sold it the night before. And so, he’s like, why do I have to do. Why do I have to leave that on the table? He saw the value in the banks, the investment banks in the process, but he wanted to, reward them for their activity, from a banking perspective and not so much from the raising capital perspective. And so they tried it. We had to get the SEC comfortable with it, which took a long time. And we had to work through addressing some of their concerns so that there was still the level of transparency that the public markets demand. And I won’t say that on, the day they went public, I didn’t have some, you know, knots in my stomach making, wanting to see it all go really well because there was a lot of uncertainty as to how the market was going to react. What they were doing was they were saying instead of having an IPO and having shares handed out to investors and then open the stock the next day, we’re just going to let the market determine our value. And that, that was, there was a lot of debate around what that might look like that morning. And so when, when we, when we finally saw the market price, it. It was less volatile than the average ipo, the average tech IPO and a Very successful story. And we’ve seen many companies follow suit.

>> Craig Gould: Sure. Slack, Zip, Recruiter, Coinbase.

>> Stacey Cunningham: yeah, there’s almost a dozen of them that have gone that way now. I mean, that’s not a ton, you think? I don’t. And it’s not for everybody. So I think there are many companies that do want to raise capital. There are many companies that would prefer to have. They’re willing to, they’re willing to sell shares in an ipo, even if it’s at a discount, if it gives them some control over who their initial investor base is and marketing themselves to companies. So I think what’s important is that it’s a new evolution, it’s a new offering, it’s a new product. And we were, excited to offer that to our customers who might want something different because our markets are changing.

>> Craig Gould: Seems like part of what made it successful for Spotify is just the ubiquity of the brand, that nobody needed to go out on the street and try to tell the story because all the investors had already been using the product.

>> Stacey Cunningham: Yeah, but Slack wasn’t a household brand and it wasn’t, you know, you knew Slack in the tech, in Silicon Valley, but not so broadly at the time. It’s become much more, you, know, it’s much more widely used now that didn’t have that household brand name to it, and it still was, was very successful. Palantir, you know, we’ve seen other, other companies go that way that didn’t have the same brand as Spotify. So again, I will say, when they went, you wondered, ooh, is this one going to be a little rockier? Because they don’t have the brand, but the market understood it well enough and it was again, less volatile than the average tech ipo. So really, really a very successful innovation in the capital markets.

Many companies are choosing to remain private rather than go public to raise capital

>> Craig Gould: What about the robustness of IPOs and the private capital market? The company’s ability to raise more than a billion dollars in the private market. Is that good? Is that bad? Is it indifferent? Back in the day, IPO was always the exit strategy. But it seems like, a lot of your unicorn startups these days really aren’t in a hurry for that liquidity event.

>> Stacey Cunningham: I think it goes back to that same point we were just talking about, is that if they’re not going public to raise capital, then they can wait. And if they can find liquidity in other ways or continue to engage with partners in other ways, and they’re going to, they’re going to take that opportunity, that balance is what I think is really important. There’s very great use cases for the, for the private markets and private investors and whether it be private equity or venture capital. And it’s easier to make some changes in a company when you’re private. It’s easier to focus on long term strategy when you’re private and to m, make some big changes that public investors might not have the patience for. And that’s one of the challenges of being, a public company. Now I do think we need to look at our public markets and say, why are so many companies staying private and what’s the downside of the fact that they’re staying private? Because it does have an impact and that balance is really important. And I would argue that right now it’s not quite balanced because there is, there is so much capital in the private space. And, and whether it’s just perception or reality, if investors feel left out of the success that we see in a company growing, it builds resentment. And so yes, you could argue that retail investors and everyday investors have access to private investments through mutual funds or through, through other means. but it’s not the same thing as buying it themselves and understanding that they got to share in this company’s growth. Amazon’s a great example. When Amazon was founded in 1994, they went public just three years later. Their valuation at the time after going public was, you know, something like $440 million. They’re now $2.2 trillion market cap. And that happened in the public markets. So if you bought a thousand dollars worth of Amazon back in 1997, it’s worth like two, almost $3 million today. So that’s shared success. Right? People don’t get mad about Amazon growing so big if they got to go along for that ride. And so that’s such an important theme because I believe that is part of what this country has really been built on is yes, you can build wealth, you can become whatever you want to be, but if investors are not sharing in that success, they’re going to resent you. And so I do think having, having more public companies earlier in their life cycle is important. There’s some other benefits too, because companies when they’re private don’t have the same level of transparency. They might have some bad habits that can grow with them as they’re growing in the, in the private markets. We’ve certainly seen that the public markets demand discipline, they demand transparency. There’s a lot of obligations that you have as a public company. Yes, it makes it more Challenging to be public, but you get, your investors get some benefits from the fact that you’re transparent and disciplined in the way you need to be.

Many companies that are public struggle with lens of the public markets

>> Craig Gould: Past couple of years you have been working as an operating partner in private equity. What is that like? Are you getting a different perspective of the capital markets and how is your.

>> Stacey Cunningham: Perception changing when you realize that many companies that are public struggle with the lens of the, you know, microscope of the public markets and they, you’ll talk to companies that have long term strategies but they’re tough to execute when investors are pushing against them. And that’s one of the downsides. That’s why I think balance is so important. When you look at the public markets. It is really hard to be a public company if you have to worry about your quarterly earnings and worry about complying m with, you know, all of the things that come from the legal and regulatory framework like disclosures and earnings reports and all of those things. It’s very expensive and it can be a distraction. So the private equity offers many companies that went public an opportunity to come out of the public markets, make some of the changes that are easier to make more quickly in a private setting and then reintroduce the company to the public markets and, and let them continue to grow there and really set them up for success. And you know, that’s one, only one profile of some of the companies that private equity invests in. But I certainly can see that perspective of how hard it is to be a public company.

Have you found your calling in private equity or what do you think

>> Craig Gould: What’s on the horizon for you? What’s the next chapter? I mean, have you found your calling in private equity or what do you think?

>> Stacey Cunningham: I mean I expect that I’ll go back to a full time operating role because I like to just completely dive into the mix and get my hands dirty. And I’ve been enjoying working with the Advent team. And you know, I certainly learned in that experience that not all private equity is created equal. They’re a great team to work with. I really respect their culture and that’s something that’s very important to me is finding cultural fit in an organization. I didn’t fully appreciate that early enough in my career that, that a cultural fit matters so much. And I, when I met the Advent team I could see that. So I really do enjoy spending time working with them on some of their initiatives. but we’ll, we’ll see what comes. I, I never feel too, I always, I always feel like I’ll know it when I see it.

Culture is about respect, challenging each other, encouraging

>> Craig Gould: So you know, you talk about the cultural fit. Do you have ideas in your head now on how you would create culture in that next operating role?

>> Stacey Cunningham: But I’ve heard people debate whether or not there should be a cultural fit. And people say, oh, there should be diversity. You don’t want a cultural fit. Or they don’t like that. I think a cultural fit is so important and you can have diversity of thought, diversity of personalities, diversity of engagement styles, but still fit culturally. For me, culture is about respect, challenging each other, encouraging people to be challenged, working together as a team, sharing that team goal, knowing that you win as a team and you fail as a team. That, that’s an environment that is just non negotiable in my, in my mind. Right. I, I’m not the kind of person that would enjoy working in a place where it was about who gets what next promotion or who has the bigger office or how many people do you have reporting into you versus somebody else? I just want to be part of a winning team and, and I want everyone that I’m working with to want to be part of a winning team and want to see that success. So that’s certainly a culture that, that I would take wherever I go. And, and it’s easy to, it’s easier to evolve a culture in an organization than you might think. if you have buy in from the top or, and you can build. It has to come from the top, though. There’s no way to change a culture if it’s not, if it’s not top down.

>> Craig Gould: It has to come from the chef. Right.

>> Stacey Cunningham: He certainly does it, certainly. But it’s so important. It makes you so much stronger. And I think it’s very often not fully appreciated. You see it a lot when businesses grow through acquisition and they have multiple cultures existing, in an organization and it breeds resentment. You really need to have people aligned.

So what is your go to dish that you take with you from culinary school

>> Craig Gould: So what is your go to dish that you take, with you from your days in culinary school, what did you become an expert at? Was it CIA or Karen Blue?

>> Stacey Cunningham: No, I went to the Institute of Culinary Education in New York. It was, less than a year program.

>> Craig Gould: Wait, did you say ice? I mean, is there.

>> Stacey Cunningham: I went from one ie to another, unknowingly, but it was, you know, I would call myself a, proficient home cook. I never worked in a restaurant, contrary to what you might read about me. so it’s, I like slow cooking. I like building layers in food. You know, braises and, and smoking, barbecue and things, things like that. It’s kind of my my go to. You also have a better margin for error when you slow cook.

>> Craig Gould: Well, I’m a Texan, so you’re talking to the choir.

>> Stacey Cunningham: Oh, yeah.

>> Craig Gould: Oh yeah.

>> Stacey Cunningham: One of my favorite client events was in Lockhart, Texas, when we just.

>> Craig Gould: Oh yeah.

>> Stacey Cunningham: And tried all the different barbecue places. And I think everybody missed dinner because we spent the day eating barbecue. But it was, it was fabulous. I almost cried smelling the air.

>> Craig Gould: Yeah.

>> Craig Gould: Stacey I really appreciate the time you’ve given me today to talk about your experience and your journey and, your wisdom. Thank you so much for being my guest today.

>> Stacey Cunningham: Oh, it was my pleasure. It was a fun conversation and I look forward to keeping in touch.

>> Craig Gould: Absolutely.