In this Planning Aces episode, host Jack Sweeney and guest host Ben Murray discuss the collaborative organizational effort behind generating business intelligence (BI) and the different places BI resources may reside within a business, with reference to an episode featuring Gary Zyla, CFO of AssetMark. The hosts also discuss the role of finance in enabling sales, the challenges faced by sales teams, and the importance of financial discipline and visibility in a company’s financials, regardless of market conditions. The episode features insights from other finance leaders, including Teodora Gouneva, CFO of Next Insurance, and Wailun Chan, CFO of Grafana Labs.
Machine Generated Transcript
Jack: Hi It’s Jack Sweeney, and I’m here with Ben Murray. Once again. Ben has joined us, but Ben, you’ve been out in traveling at least I wasn’t able to connect with you earlier in the month. We’re glad we’re catching up with you. Now, where have you been? What have you been up to?
Yeah, I’ve had some travel lately, of course, Spring Break recently, but was in New York City for Nathan Latka SAS open, which was a lot of fun. So he brings in SAS founders into that and have the founders present on the stage. And so you’re really actionable advice, trying to shine to share their advice and what they’ve learned and building their SaaS companies. So this year, they expanded it into a couple different tracks. So there was a, like a CTO track a finance talent track. So I helped out with the finance track and also presented on fundraising lessons
For those among our listeners who might not be knee deep in the SAS world. Tell us a little more about Nathan. I’ve heard of him and know of his conference, but tell us give us the scoop on him. What’s he about?Read More
Nathan, you know, he founded and exited a SAAS company. And, of course, he had a lot of lessons learned from that. So he shares that now. He has his own podcast where he interviews SAS founders, and then built a also a founder path which offers financing for SaaS companies, and then now doing the events. So had you also second time I’ve attended in New York City,
and you were a presenter, as well as a where you are an organizer as well, are you just
Yeah, helped. I was also the emcee on the finance stage for one of the days so just helped introduce the speakers and also presented as well. Now
I know the conference, I think it was the week or the week following the collapse of the Silicon Valley Bank. Was there much buzz about that or you know, make the conference sort of gloomy I don’t know.
I don’t I don’t say it was gloomy, but I think it did prevent some people from attending because they had to then that was their number one priority to make sure we can you know payroll function we can send payroll, we can pay our vendors so I think yeah, that that did affect quite a few companies of course. But really, honestly by that you know, of course that weekend I’m sure a lot of people were working that weekend once it hit and then that Monday Tuesday and then probably figured out alright, we can send payroll this way or that way even seeing like investors temporary loaning money so they can make payroll. So I by then it was still talk, but it seemed like people were little moved on or maybe had their situation take taken care of by them.
Were curious what your reaction was or your initial idea as to what was going on might have been And what is your lay of the land? Now? What does it look like to you now?
Yeah, I’m by no means a banking expert. But I think for the CFO is a bait us kind of think, again, just about our banking relationships and having redundancy there. And again, sometimes we don’t have a choice, maybe we were bought out by a PE firm, and the debt facility was through this bank. And now we’ve got to change banks to that bank. And we have no choice. I’ve been in that situation where you don’t have a choice of the banking situation, even though you’re the CFO, but then it makes you think, well, maybe I shouldn’t close that account that I was with. And also, I think, just local banking relationships, you’ll maybe go into these big national global banks. But I think also now the redundancy of having that relationship in your town with someone you can go meet and talk to, maybe you have a line of credit through them. That’s really cheap. You know, the fees are really cheap each year for that. So I think now versus just having one bank, I think definitely, because both for we’d want to consolidate, you know, all these different bank accounts, cash sitting in different counts, and let’s just consolidate right, we think that makes our life easier it does to some extent, but now I think definitely, I think CFOs learned that yeah, we need to to banking relationships.
Well, thank you for that, Ben. And I’ll mention right now that two of our planning aces in this episode, are actually SAS CFOs. And Ben, like to kick things off with you by just asking What did you make of the three finance leaders who will be featuring?
Yeah, it was really interesting. I think that definitely some it’s too common threads are two common threads. One, yeah, definitely finance helping with sales and sales data, in sales compensation. And then overarching, the three conversations was really data. And one of them I think, was Gary talking about business intelligence, where that sets how to make that the most effective. So I think, yeah, there’s a theme of sales and enabling sales as a finance leader, but then then the data aspect and all of these.
Yeah, they do. They all, they all hit on data. And it’s interesting. This is a nice snapshot in time, all three of these conversations happened over the last 60 days. And you’ll see that they pick up on many of the same themes. So permit me to tee up our first planning ace who will be Gary Xyla, CFO of acid mark from Episode 877 of CFO thought leader, Gary’s Isla has been with asset mark for the last 12 years, he’s been part of a number of transactions. It was bought by private equity, this company twice in the past went public just a few years back. So there’s been a number of transaction milestones on his CFO tenure. But But the part of a conversation I wanted to share here had to do when I asked Gary about di because several times during our conversation, he brought up the business intelligent unit or group referred to it multiple times. So my question to him was simply, where is it? Where does it reside in your organization? And I thought it was kind of interesting how he explained where BI is today. This is Gary Xyla, CFO of asset mark.
Gary Zyla [08:24]
The finance team I oversee, it’s fun, and it’s broad, right? We have you have, you have business intelligence, I have investor relations, corporate development, communications and PR, are part of our finance team, which is somewhat unusual. Sometimes. We have f PNa. Of course, you have controllership. And but business intelligence is amazing. And I think in many companies, depending on the type of company you are, you can you could draw business noses in a couple of areas, it could sit in it, I wouldn’t recommend them. It could sit and it becomes very IP focused. Because we’re able to process data. It could sit in sales, because oftentimes there’s no issues. It’s so focused on predictive metrics and whatnot for sales. It could sit in a strategy group, if you had a separate Strategy Group. I think in our company and unlucky finance is very strategic. Obviously, that’s why we’re talking very, very deeply based and so it really fits well here. Our leader of Vi Qi has his wanton 1000s of beautiful balance between them with Hawk it which I cannot. So I don’t know what she’s talking about. She can talk about it and what she can also talk to business and talk with our business leader sales, etc, etc. And what they’re looking for. And you know, they they, they team now is about seven or eight of i 50. Person finance, you know, for scale, and finance things. I’ve seen a few people. The vi team itself is about seven folks and they they not only collect the data and Make sure they’re the source of truth. Like I said, they’re what goes in our 10k. Right. And here’s all our statistical numbers. They also, they also, they, they take that data, and they actually do compensation based off of it. So they may handle a compensation for our sales team. And so they’re the source of truth for our sales team for a very important thing, and that what they get paid. And, and so they are essential. And and I think, while I, my particular team in all works well together, they feed in, they take data from control ship, obviously, and they give data to the control ship for the for, like I said, our SEC filings. They work with our FPGA team who does our forecasting and modeling. And they work actually with our communications team, because I want our communications team wants to go out and talk about our company, they need that type of data for them. And of course, they work with our front end business all the time in terms of trying to find predictive metrics.
Okay, thank you, Gary’s Isla, CFO of asset mark again, Episode 877 of CFO thought leader do get a sense. From that episode of Gary’s emotional intelligence and how he likely leads he seems very inclusive, how he explains things he seems very careful in in what’s the word I’m looking for courteous to the different parts of the organization, but more takeaways than what I’m sharing. Ben, what did you think?
It was really interesting, because Gary worked in a public company lot of functions underneath him as the CFO, Treasury, investor relations, but he tax accounting, FP and a, and then the BI and of course, yeah, he carefully worded it where he’s like, Yeah, I don’t really recommend it under it. And of course, it as CFOs and finance were data hungry, right, we want access to data. And it makes sense that Gary recommended that the FBI Business Intelligence Team sits under him, because you can do so much with that, and also enable other organizations to do more as well with that data. So yeah, you’re really, really not a surprise.
speaking broadly, let’s just talk about their SAS realm for a moment bi, in most SaaS companies would be under the finance umbrella. Am I Am I right about that? Or does it also appear to be other places?
I think you’ll see multiple approaches. But I think it makes sense, right? Finance, we work with a lot of data. And usually, if there’s no BI team, F PNA, is tasked with helping with that data analysis, helping sales with their pipeline analysis, just that extra set of eyes, and then it evolves from there to say, do we need a formal BI tool within our org and then eventually, maybe we need a champion for that BI tool and a team. So finance, just naturally we work with a lot of data. So it makes sense that at least, you know, in SAS companies, that it starts with finance, and then maybe we formalize that function, I have
to believe where there might be, let’s call them legacy bi groups or units that are attached to it that as the companies evolve, in fact, that group is is becoming increasingly part of finance are linked to finance.
Yeah, yeah. Well, I think yeah, could be industry specific to when I was in the airline industry. And it depends what role does finance play in this organization in this industry, when I was also in the airline industry, very finance centric finance was involved in everything and you had to be so financially disciplined, where maybe other industries, it’s not that way, you know, to start with, so it could be industry specific, you know, in in how they look at finance and value that and how that function interacts with all other departments.
Back when the folks at Pay Pal acquired the company, Braintree nearly, I’d say a decade ago, the door of opportunity swung open for our next planning ace, Theodore Guna, VA CFO of next insurance. She explains she became a business unit CFO for the new entity of Braintree and Venmo. In our clip, she highlights very nicely. What the opportunity brought forth was, was in some ways, a challenge about sales compensation and a challenge about aligning sales structure. Anyway, she had some really interesting thoughts highlighting that strategic chapter that she said she learned a great deal from again, here’s Teodora gonna have a CFO of next insurance.
Teodora Gouneva [14:58]
Through my career, I spent a lot of times barring sales teams, and usually what is critical with the sales team is they respond really well to how you design compensation. And if you don’t design it the right way, you may get a different behavior that you don’t intend. So looking back at that particular example, the way we work, as we said, the company goals and we know, at the high level where we want to get to and how we get there in sales teams at PayPal play significant role of that, how are we getting to our strategic long term vision? In having the conversation with them to translate? Why would we asking from them now is different than what we asked from them last year, and how that helped the company and how, therefore they should adjust behavior was pretty important for us. And I think that happened around after PayPal had acquired Braintree we had to bring two sales team together and change how they operate. So we had to paint the vision for them of what PayPal needs. How is that new dynamic between the sales team coming together? And ultimately, what is the goal, so we had to get them strategically aligned on what is important and why. But from a finance perspective, we had to put the financial infrastructure in place or the compensation plans, plans in place that drive the right behavior. So that is, that has happened in multiple types of occasions, not just related to sales team, I think such an effective approach has to happen with any other goals and other any other alignment that you need to get for people to work towards the same strategic direction.
So again, a nice chapter from the finance career Teodora Univa, from Episode 880, by the way, if you missed it, it’s well worth listening. But Ben, what did you make of what Teodora share?
Yeah, I think it was really interesting with Teodor about sales or finance being involved with sales, compensation tracking, and analysis and those payouts, you know, that’s, that’s really common. And you know, and I cringe whenever I hear someone say, you know, sales was coin operated, you know, which which she did not, but, you know, the, the sales compensation plan kind of dictates the behavior and sales, which of course, makes a ton of sense, just like SAS founders trying to maximize the value of their company, they’re looking at those things that will maximize the value, same thing for sales, you know, that they’re going to maximize, maximize their, their compensation. So, you know, with compensation plans, right, they’ve got to be repeatable, they’ve got it under be understandable. You know, so everyone can understand how the plan works, how it pays out, and how it contributes to the overall objectives of the company. So very common to hear that CFOs are involved in finance involved with the sales compensation structure. And because we’ve got to eventually we’ve got to pay that out for the sales team.
So let me ask you something here. Just thinking about a conference room where finance and sales has come have come together to sort out Okay, again, there’s this acquisition, there are two teams coming together that they’re trying to get some synergies from. And it’s a delicate, as any merger is there’s there’s 100 ways for things to get misunderstood. What does finance generally misunderstand about the sales team across the table? What is it that finance at times just doesn’t get?
Well, I think finance misunderstands potentially just the day in life of sales and how hard it is and the pressure there. I think finance light likes to be very critical of sales performance every month and hitting targets, hitting quotas, that eventually end up in our revenue forecast, you know, so I think we have to understand just just that day in the life and be a little more sensitive to what’s going on in sales and really be there to help and enable and that’s finances, I think one of the major functions is to enable and to facilitate, you know, it’s not just all about the numbers sometimes. So I think, you know, not looking at the data always and just looking at what’s happening with within those sales teams, and how we can help and I think, you know, the big thing then for finances, looking at sales, compensation plans, and then of course, we understand quotas and targets and how much gets paid out, but how that then translates into the overall cost structure within a company and then hitting our go to market sales and marketing efficiency targets, you know, so, you know, connecting those two pieces can be hard, but I think it’s understanding that day in the life you know, what products they’re selling, and, and you know, how they’re being compensated on that and how that all rolls up together.
All right. Well, speaking of connecting the pieces Our next planning ace spent a decade at LinkedIn between 2010 and 2020. He was the head of F PNa. Today well, and Chen is CFO of Grafana. Labs, we are pleased to feature him on episode 874 of CFO thought leader will and turns back the clock for us and takes us back to his LinkedIn days, figure 2010 to 2013, he had a special challenge that he’s going to share with us. And once more are planning and he puts a bright light on sales compensation and working with the sales team.
Wailun Chan [20:49]
Back in 2010 to 2013 ish timeframe at LinkedIn. The member base was about 40% us and 60% International. But the revenue was except flip. It was about 70% us and 30% International. So the key takeaway like the headline on there’s always been like, there’s a lot of whitespace. There’s a lot of commercial opportunities for LinkedIn outside of us. So the question is, what are we going to do about it? And what was really fun was like across the finance team between FPA reserves and other organization, we actually like look at data. And then eventually, we came up with a playbook that like, hey, if the members his certain threshold, like number of members, he’s doing thresholds in the market. If the engagement, his sunnah threshold, if there’s a cop company like meaning non paying companies on our website, on sort of market history and threshold, once you hit like those three threshold, create intercession, then you can go in with the inside sales team. And then eventually, you can go to enterprise sales. And pretty quickly, you can create a scale good market organizations. And so using the playbook, we open 20, plus local offices over two years. And then in the spirit of us to be able to do that to scale that, I think is a big driver of the hyper growth that LinkedIn experienced during the 2010 to 2012 timeframe. And that was one that I felt that we brought visibility on what’s going on in the market, can we try some insight, and then combined with some external data, and then to basically create a strategy on the gold market? And it plays out?
Yeah, I think that’s really interesting. You got to the whole data aspect, again, mining data, and helping teams in this case sales be more effective in their job in their process. And it’s funny, he was talking about LinkedIn back 2010 2010 2013 period that I remember received my first LinkedIn request, you know, around that time, or Oh, nine, like, what the heck is this platform, so that, you know, going, going way back, but he talked about the user base, where the revenue was coming from it was kind of flipped us versus International, and really digging into that data to provide data that then can help those inside sales teams, you know, reach the right customers, and with the right data to in, you know, to help, I think it was even up, you know, how they were, you know, the user base was engaging and, you know, spending dollars on LinkedIn is platform.
So just within that short span of years, they they opened up 20 locations pretty, pretty amazing abroad. And I liked how he explained about the thresholds and about how, you know, indirect, the indirect sales teams sort of pass it as it up to the enterprise sales team. Eventually, as the thresholds are met, and, and opportunities came forward, well, probably for
some of these larger firms where they have, you know, regions defined, but then sometimes you have these enterprise teams that are over several regions and more like relationship managers that make it involved in different regions regions to kind of bring that story together. So I think that could be a function of a larger company, or even a high growth company, that you have different layers of sales. And then those teams are interacting with each other to to better close deals
been since you’ve joined us here. I feel compelled to ask this question. Chief Revenue Officer is the title that the SAS realm really coined. True, or that’s my read on it.
That’s funny CRO. Yeah. Could be because, honestly, we don’t know when I hear CRO. Is it their VP of sales? Is that their VP of bargaining? Is that a role that’s both VP of Sales and Marketing and we’re giving them the C title. So we are really common in SAS now and maybe Again, a function of larger orgs, where you hire, you’re building out your sales team, you have a VP of sales and maybe eventually you promote he or she into that CRO position. But yeah, yeah, super common in SAS to hear that, but usually, you got to ask a few questions, what function? What departments? Are they actually overseeing?
Well, again, I think it’s a title that we see in SAS companies along with the jargon go to market along with customer success along with a lot of the customer centric metric names. Yeah, for
some, for some industries, you can be like, What are you talking about a go to market motion team, just like when I was in the airline industry, we’re not calling up, you know, people to say, hey, buy our tickets, right? We’re running ads, of course. But then you come into SAS, right, you, you have that go to market motion team. And it’s can be so complex. There’s so much investment in sales and marketing to drive revenue to drive expansion, revenue, and also so much data trapped in there trapped in our lead funnel, our pipeline funnel. So it’s a huge responsibility. And if not done, right, it can just suck up a bunch of cash and really lead to really poor results, of course, so it’s it’s a huge role within SAS companies that does deserve that that C title.
So then, just one more SAS question for you then wondering how the SAS metrics you feel they performed in this sort of odd period were in the wake of the Silicon Valley Bank collapse, in the last venture money available in layoffs, really a tech recession underway? are they performing the way they are? Are they serving the companies the way they should? And visibility into cash? Of course,
I think the metrics didn’t serve them well, when they had no metrics in place. And now everyone’s scared scrambling to put metrics in place I attended event recently in Denver, where a PE firm an investment bank, presented on just the latest in software m&a trends in the market. And the P for mentioned, it’s 2023 is all about unit economics all about SAS metrics, understanding all those dials, what’s working, what’s not working, because financial statements, although very important, SAS only take us so far. And it’s like that iceberg the tip of the iceberg, we got to look underneath the waterline to really understand what’s happening in our business. So I think now everybody’s probably trying to scramble Of course, we know cash runway, cash, runway, cash runway, but now what what impacts our cash runway, right, we’ve got to look at growth, retention, our margin profile, our financial profile, and that’s where those unit economics come into play, and now scrambling to put those in place.
I lied, I’ll serve up another SAS question for you, you know, SAS companies, when it comes to measuring the customer experience customer success, they are leading edge when it comes to managing their cash, are they are they as cash savvy as they are customer savvy?
I think I think I like to say financial discipline ever goes out of style, you know, in good markets when cash is free and plentiful. Right? We, we lose some of our discipline. You know, if we know we’ve got a lot of cash in the bank, we know if we can get more cash down the road. You I see that companies lose that financial discipline. And then when things get tough, man, things go off the rails really fast. You know, so whether good markets or bad we’ve got to have that financial discipline in place, and it’s hurting those folks who didn’t have visibility into that runway. And it comes back to just fundamental financial discipline, having a forecast model in place forecasting your financial financials forecasting your cash runway, and just those basics that the finance function should be doing. Or if SAS founders if they’re too early yet, you know, again, that’s where fractional roles come into place to help them if they can’t afford a full time CFO. But, you know, for me, it just comes back to the fundamentals.
Nice. That’s the perfect place to end this episode. Ben, thank you for those final comments. Thank you for joining us on this episode of Planning Aces.
Over the course of his finance career Ben Murray has occupied the CFO office at a number of different companies. In addition to having a multichapter CFO career, he is today known as “The SaaS CFO,” a brand he established while creating and hosting the popular SaaS CFO podcast. What’s more, the TheSaaSCFO.com is today a source of Ben’s blogs, research, courses and templates based on his more than 25 years running finance teams . He is frequently hired by SaaS companies: from small, private technology firms to global multi-billion dollar public companies. Find out more about Ben @thesaascfo.com
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