Ever wonder how a start-up identifies the strategic drivers behind its business model? Join us when Joan Lavis, CFO of Brightline Partners, a provider of interactive advertising, explains how the firm’s management determined what metrics to use when measuring the potential of leading-edge offerings.
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“When you’re starting a market, which we are in a sense, we’re at the very forefront of that market, so there’s an ah-ha moment probably every single day. But for me the ah-ha moment was in the forecasting of the business and really figuring out what the drivers are.”
The following is an edited abstract from the CEO Thought Leader podcast featuring Brightline Strategies CFO Joan Lavis and Jack Sweeney, co-host of CFO Thought Leader.
CFOTL: Joan, what has been your ah-ha moment, that moment of strategic insight that perhaps led you to drive change within your organization or to point it in a new direction?
Lavis: I think when you’re starting a market, which we are in a sense, we’re at the very forefront of that market, so there’s an ah-ha moment probably every single day. But for me the ah-ha moment was in the forecasting of the business and really figuring out what the drivers are. That sounds so intuitive, but it was really when we got together as a senior leadership, a business, and said, “What’s going to drive the success of this business? And how shall I model it?” That made the big ah-ha moment where and when am I going to get the operating leverage that we need? And what kind of pricing does that mean for this business to make this profitable?
CFOTL: Is there a specific example of one of those drivers that you could share with us?
Joan: One is the supply side – how much supply of inventory is going to come through the market and when because you’re constrained by your supply. So even if you could sell on the demand side, even if you could sell 100 million ads, if your supply is only at 50 million then you can’t. You obviously can’t count on the 100 million for your revenue. The other big driver is the size of the campaign. The larger the size, the more scalable, and so the size of the campaign matters as well.