Wednesday 25 April 2018

Meet Square's Irish CFO - one of the most influential female tech execs in Silicon Valley

As chief financial officer of Jack Dorsey's $20bn payments company Square, Sarah Friar is setting a pace that has helped the company to beat market expectations and triple the share price.

In a candid interview with Adrian Weckler, she talks about the 'glass cliffs' that women face in tech companies and why the cards are still sometimes stacked against them when trying to get to the top

Square chief financial officer Sarah Friar has the led the way at the tech giant which is now valued at $20bn – her 0.1pc stake in the company is worth $17m and she has sold $5m worth of shares. Photo: Adrian Weckler
Square chief financial officer Sarah Friar has the led the way at the tech giant which is now valued at $20bn – her 0.1pc stake in the company is worth $17m and she has sold $5m worth of shares. Photo: Adrian Weckler
Adrian Weckler

Adrian Weckler

Who is Ireland's most influential female technology executive?

The answer often assumes that it's one of the many female country managers for the top multinational firms in Ireland. But few have the power and influence of Sarah Friar, the woman from Tyrone who is chief financial officer to one of the world's fastest-growing payments firms, Square.

Having guided the company through a US IPO three years ago, Friar is now seeing Square expand rapidly to become one of the go-to services that small companies in the US use to accept payments using their phones as credit card terminals.

Her role is not purely to be a number-cruncher. She is also on point when discussing strategy, development and new products at the company.

Square, which was started by Twitter founder Jack Dorsey, has soared in the last year.

Its shares are up 200pc in that time and almost 100pc in the last six months, leaving it just shy of a $20bn valuation. (For context, this means it is now worth about the same as Twitter, which Dorsey also runs as CEO.)

Other than competent management and a relevant, functional product set, this rise in worth is based partly on the same kind of underlying factors that are elevating newly-formed unicorns such as Dublin's Intercom, namely that the world is moving online to make and accept payments. And for plumbers or builders or other self-employed people, taking that payment using an app - and without any hassle from banks about bureaucratic merchant accounts - is a godsend.

All of this has left Friar, an Oxford graduate who previously worked at McKinsey and Goldman Sachs, in a good place. Not only is she at the financial helm of one of the key players in the market, but her personal stake is doing nicely. In the last six months, Friar has cashed in shares to the value of $5m with a remaining holding of $17m (around 0.1pc of the company).

She is also in an increasingly authoritative position within the booming global payments industry, coincidentally alongside Ireland's other top tech exports, Stripe founders Patrick and John Collison.

Read more: 'The beating heart of the newsroom' - Meet the Irish woman behind CNN's social team

But she is still one of the few female senior executives at a Fortune 500-ranked tech companies. That hasn't gone unnoticed by Friar.

"I could pull out all the stats, such as the number of women who are CEOs in Fortune 500 companies, to show you that it's atrocious," she says. "Frankly, it hasn't really improved in the last few decades. Despite everything, we as women are still not clicking through into senior leadership. Progress is being made, but it's very slow."

As a senior chief financial officer herself, Friar acknowledges that there is movement into the vicinity of the top tech jobs through more visible female CFOs and COOs. But there's still a barrier around women not getting to the top CEO roles.

"If you look at CFOs and COOs in tech companies, you have Belinda [Johnson, COO] over at Airbnb, you obviously have Sheryl [Sandberg, COO] at Facebook and Ruth [Porat, CFO] at Google. You have these shining lights. But the unintentional biases that stop women getting to the CEO role are harder to assess. And then a lot of women end up as CEO in a 'glass cliff' role, where you get in there but it's a turnaround job for a company in trouble. In that position, already your chances are lower than a company with momentum and growth. That's really what happened to Marissa [Mayer, former CEO of Yahoo]. So we women need to crack through not just when things are tough but when they're growing too.

"It has to be the board that supports it and the company too. That's where I'm lucky at Square. I feel like I'm super supported and that Jack is super supportive to me. I'm in this great position at Square and feel like I'm having a big impact."

In this respect, Friar says that Square has a culture that naturally results in much more progress by competent, qualified female executives at the company. This, she says, looks like a good template for how other companies can adapt.

"There are a couple of things that we can do at a senior level," she says. "There's definitely something in showing that it can actually happen. For example, 50pc of our executive team is female.

Read more: Why inclusion is the latest hot workplace topic - and how it can help your bottom line

"When women look up the ladder and want to aspire to those positions, we show them that it's doable."

Other basic precepts have to be at work at the company too, she says.

"A lot of people get fixated on recruitment, but you have to think of inclusion first and then recruitment," says Friar. "If you recruit people into a non-inclusive environment, you just push them back out again, it doesn't fix anything. We started with inclusion and then did a lot did of work.

"So if you're a female engineer, we try to make sure that Square is a place where you can be successful, we try to make sure we have the right atmosphere. Then from a recruitment standpoint, we talk about it, we measure it and put a huge push on gender. We're pretty close to fifty-fifty on gender now."

Friar is conscious that it doesn't end there. 'Diversity', if taken seriously, has to go beyond gender.

"Now we're looking to go back on some of the other metrics we may not do so well on such as race," she says.

"I'd also say that it's good just having divergent voices at the table. It makes for better decisions and is a good proxy for why it's good to have diversity. And this is not about being strategic. You've got to be 'doing'. I'd love to see companies doing this more, boards and senior leaders."

As for the business itself, it's busy expanding into markets beyond the US. At present, that means Canada, Australia, Japan and the UK. Ireland does not appear to be on the radar for 2018.

"We're really about doubling down in the countries we've launched in," says Friar. "And we still have a lot of work to do. But we've done very well so far and are ahead of plan. We're basically starting to see all those same symptoms that we saw in the US, which is to say lots of small businesses starting to need this kind of utility. And it's happening as bank branches close and it's generally more difficult to use cash."

Beyond small businesses, Square thinks it has spotted a valuable niche for itself with its 'Cash' card. Founder Dorsey recently spoke of an "undeserved, underbanked audience". He said that people are using the Cash card for things like McDonald's, Netflix, Uber and Spotify. "These are everyday activities you would expect someone to use a card for," he told a recent earnings call, also noting that activity "notably" picks up on Fridays as people get paid. It appears that Square Cash users are increasingly sending and receiving money from friends and family.

This "underserved" audience is a phenomenon that Friar believes is relatively underacknowledged.

"The number of individuals in the US who don't have access to a bank account is shockingly high," she says. "A big reason is cost. If you're a bit lower down the totem pole of wealth, banks want to charge you to keep a minimum balance. For a lot of people it's prohibitive to keep 200 dollars, so then they have to pay a fee. There's also a real problem if they're overdrawn, where they have a 20 dollar or 30 dollar fee. Our goal with the Cash app is to effectively give them an account without any fees. We give them a sense of control."

Friar also says that others end up "underbanked" not because of impecunity but due a general distrust of the financial system.

Read more: Revealed: how female tech bosses win just 3pc of VC cash

"Many grew up in 2008 and 2009," she says. "There's often just this huge distrust of banks, whose net promoter scores are sometimes zero. Or they feel it's not for them because it's that's what their mom or dad does. They have a phone and there's an expectation that everything they're used to is happening with that device, including how a financial app works."

For the rest of us, though, financial habits are relatively slow to change. Even so, the world is moving pretty quickly toward alternative payments to our traditional credit cards, Friar says.

"There are lots of cultural variances," she says. In China, WeChat pay and Alipay have hurdled the rest. By comparison, in the west we're playing catchup. I don't know if that means Asia is now the proxy or that that is where the world will be soon."

A good example of culture interjecting in payment practices is the separation that still exists between social networks and payments. On paper, it would appear that the social apps we use most - such as Facebook, Instagram, Snapchat and Twitter - would automatically mop up in any shift toward app-based mobile payment transfers. But that isn't happening, says Friar.

"What we've seen to date is that people want to keep their social and financial apps separate," she says. "We have a good perspective from seeing usage in this channel, with ourselves and other players. For example, in the US, Snapchat have Snapcash as an offering, but we haven't seen a ton of usage. People want one app for one thing and another app for another, doing financial things versus chatting to friends and family. Facebook has seen the same thing. For a long time they've had the ability to let users send cash. We could paint on a social overlay but people don't really want that. For now, we view them as separate."

Square has one other thing it has brought into its arsenal, even as it gets some blowback: Bitcoin. This year, the company announced that it would incorporate Bitcoin as a payment option going forward. Friar admits that it's not exactly the most fluid currency to use, but predicts it has a future nonetheless.

"At the beginning of any technology, there's always work to do," she says. "Part of this goes back to payment innovation, it behooves us to know what goes on in payments. But we're serious. Square is not a place where you can persuade people to do science projects. It's a little inefficient today, especially as people are really buying it as an asset rather than using it to buy a cup of coffee.

"But we're working with a series of exchanges and there are others focusing on how to create liquidity. Everyone's working on how to turn it into a fiat currency."

Sarah Friar is a headline speaker at Moneyconf, a Web Summit conference taking place at the RDS from June 11 to June 13

5 Things: Sarah Friar on...

1 Women getting top roles in tech:

"I could pull out all the stats, such as the number of women who are CEOs in Fortune 500 companies, to show you that it's atrocious."

2 Incorporating Bitcoin into Square's payment ecosystem:

"We're serious. It's a little inefficient today, especially as people are really buying it as an asset rather than using it to buy a cup of coffee. Everyone's working on how to turn it into a fiat currency."

3 Why young people look to mobiles for cash transfer rather than traditional banking methods:

"There's often just this huge distrust of banks, whose net promoter scores are sometimes zero. Or they feel it's not for them because it's that's what their mom or dad does. They have a phone and there's an expectation that everything they're used to is happening with that device, including how a financial app works."

4 Why Facebook and Snapchat users don't necessarily want to pay for things using those apps:

"People want one app for one thing and another app for another, doing financial things versus chatting to friends and family. For a long time [Facebook has] had the ability to let users send cash. We could paint on a social overlay but people don't really want that."

5 Why China is ahead in mobile payments:

"There are lots of cultural variances," she says. "In China, WeChat pay and Alipay have hurdled the rest. By comparison, in the west we're playing catchup. I don't know if that means Asia is now the proxy or that that is where the world will be soon."

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