1,029: A Unique Advantage: When CEO Experience Informs CFO Leadership | Matt Steinfort, CFO, DigitalOcean

When Zayo’s CFO decided to retire, Caruso saw an opportunity for Steinfort. Despite his lack of a traditional finance background, Steinfort had accumulated significant experience in corporate strategy during his years as a consultant for Bain & Company. Meanwhile, his business-building tenure as a CEO had made him more than a little familiar with the complexities of strategic budgeting and resource allocation. This experience, combined with the trust and confidence that he had built with Caruso and Zayo’s board, positioned him as an unconventional yet highly capable candidate for that firm’s CFO role.

Steinfort’s move from CEO to CFO, while rare, highlights the importance not only of adaptability but also of developing and leveraging a broad skill set. His success as a CFO, first at Zayo and now at DigitalOcean, underscores the value of diverse experiences in shaping a holistic approach to financial leadership. –Jack Sweeney jb

“Quickly understand the key business drivers and don’t be afraid to question and challenge everything. Don’t assume that the business, regardless of how well the company is operating or how fast it is growing, is highly functioning and optimized—you should always be able to find opportunities for improvement.” –Matt Steinfort, CFO, Digital Ocean

On a somewhat higher level, we simplify cloud computing so that developers and small technology companies can spend more time on building software that changes the world than on wondering how to do it. We have 650,000 customers worldwide, and 70% of our revenue comes from outside the U.S. Our partners range from tiny little developers to bigger companies. These larger firms may not be enterprise entities in the grander scheme of things—like a JPMorgan or Chipotle—but they are still very important.

Our partners tend to be small companies with 400 to 500 people. They’re very technology-driven—building apps, building websites. They’re using technology to provide services to their customers. They come to us, and then, in a matter of just minutes, they are able to learn about all of the technology that we have available.

We have lots of tutorials on how to build software and so forth, which I think is what draws people to our site. If they wish, it’s really simple for them to then click a button to enter their credit card information—and they’re up and running, so to speak, to spin up their own applications. We don’t really have a sales organization as such. We rely on what’s considered “product-led growth.” People come in to learn about our product through all of this extra content that we provide, they sign up, and then they grow on our platform.

DigitalOcean is really a phenomenal company. Our differentiator is that we speak to everyone. If you’re an individual or tiny company, why or how can you even comfortable exist with Amazon, Google, Microsoft, and the like—companies that are growing massively and have tens of billions of dollars in revenue in a market that is growing by 23% or so per annum? These megafirms target the biggest customers in the world, enterprise clients with giant workloads.

What they don’t do as well is to serve the little people, the little developers, the individuals, the hobbyists, the people who are just trying to have a side job in the space. These folks may have a day job and want to go home and learn how to code so that they can start their own business. They’ll never get any attention from the larger companies. Our solution is differentiated by being super-simple—not as feature-rich as the offerings of the big guys, maybe, but this is on purpose. Our pricing is lower and very transparent, unlike that of the hyperscalers, whose pricing is based on so many options and so many knobs that you can turn on—much of it usage-based. With the big guys, it’s almost like the old days in telco, when you needed one single person dedicated to understanding your bill, which was very unpredictable and hard to understand.

Our offerings are incredibly simple. We also provide a very high level of support that you won’t get if you’re a tiny fish in a big megaprovider pond. And then there’s our community. We have hundreds of thousands of developers who love our platform and themselves have sub-Reddits and Discord channels. Lots of times, when somebody posts a question somewhere on how to do something, our developers will be right on it. Often, though, it’s our active, cross-channel community who gets there first.

As I said, this is a market that is growing by 23% per year right now, with a current cap of about $114 billion, according to IDC. We feel that we’re in a very, very competitive position here, being purpose-built for the smaller-customer tier. These are exciting times, which only have proved to underscore why I originally joined DigitalOcean. You know, I come from telecom and other tough industries. To put it simply, like a lot of folks, I’ve been through a lot of challenging financial crises from a sales and growth standpoint.

When DigitalOcean came up on the radar, I was like, “Wait, you guys were growing in the mid-30s but now you’ve slowed to the high teens—yet you’re complaining about this while at the same time generating this great free cash flow, with a giant market opportunity continuing to evolve?” Clearly, this is an industry that I could get excited about, so I came over. It’s been a bit of a wild ride during the past 18 months, in that we’ve had some some challenges as well as opportunities, but I’m very excited about where we sit and the growth trajectory that we’re on.

jb