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When Envoy CFO Sinohe Terrero is asked about his career chapter at Etsy, the online marketplace founded in 2005 and headquartered in Brooklyn, New York, he begins by explaining how back in 2008 Etsy’s finance function was really just a loose grouping of tools and people.
“I’ll never forget that I once had to go meet the bookkeeper, and he was like in Coney Island,” explains Terrero, who says that the financial mind-set at Etsy during its early days was that data trumps accounting—or, to put it another way, that data was strategic to the business and therefore should be kept in-house, whereas accounting could be outsourced to Coney Island or wherever.
“Etsy was a marketplace, so the transactions occurred in big volumes, but we didn’t send invoices. We didn’t really have AR. Everything is paid by credit card on the Web,” points out Terrero, who quickly became tasked with establishing more traditional processes in preparation for bringing the accounting function back in-house.
“Because of the nature of Etsy’s business, the accounting function initially really didn’t have to grow as much as the data function,” says Terrero, who notes that even as Etsy’s finance department evolved into a full-capacity function, the data mind-set still loomed large.
Says Terrero: “Understanding the transactions of the business on the data side was the primary responsibility.”
Later, Terrero recalls, it was his focus on data and the growing volume of Etsy transactions that led him to back a strategy that not everyone was convinced was a good idea.
According to Terrero, there was debate inside Etsy over whether the company should be charging fees on payments received by sellers inside the marketplace. At the time, certain Etsy executives believed that the firm’s mission should simply be to enable the sellers to sell more, which would then result in more transactions.
“We argued that the fees could be a revenue source and that, given the volumes we were seeing, the strategy could be game-changing for the company over the long term,” remarks Terrero, who says that he was joined by a number of influential Etsy executives on the winning side of this debate.
Says Terrero: “When you look at the percentage of revenue that these fees now represent for Etsy, you see that they’re actually pretty sizable.” – Jack Sweeney
Guest: Sinohe Terrero
Headquarters: San Francisco, CA
Raising money in an unusual environment.
CFOTL: Tell us about Envoy and what attracted you to the opportunity?
Terrero: I like to say we’re challenging the status quo with innovations in a space that has really long been neglected. Which is the office, right? If you’ve ever visited an office and signed in on an iPad, the odds are really high that you used the Envoy platform to sign in. Envoy has really redefined how offices interact with visitors, manage deliveries, book conference rooms. Now, with our new product that we launched because of COVID, that we call Protect, we’re helping companies not only return back to the office safely, but do cool things like capacity management and many other (functional processes) that we will be launching soon to help folks manage their workspace. We’re the market leader by far. What sets us apart from our competition is that we’ve developed the most robust suite of products. As well as a mobile offering, in hundreds of integrations, for everything from Wi-Fi routers to keyless door access, and an incredible roadmap that our customers are really excited about, that includes hot-desking and ticketing in the future.
I joined Envoy because I was looking for a company that actually had a lot of what Envoy had, from a financial standpoint. That is, we have basically a viral component or a freemium component, where we have a self-serve function. People can just come to the site and pick our product up or buy it, without the interaction of a sales person. Which is very much like My Etsy and my Indiegogo experience. (In other words) it is a marketplace that has a viral loop, if you will. At the same time, it has an enterprise sales component, which from an experience standpoint is what I had at Quid. But in my experience, companies do not often have these two components together. So in terms of thinking about the FP&A side of the house, this really adds more complexity, because it has everything and that’s pretty exciting for me.