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The Modern CFO podcast is designed to illuminate the hard work that is behind the scenes in financing next-generation ideas and technologies, as well as acknowledging the developing role of senior financial professionals, and the tools they rely upon.
Transcript:
Please note that the transcript is AI-generated and may contain errors. The content in the podcast is not intended as investment advice, and is meant for informational and entertainment purposes only.
[00:00:09] Andrew Seski: Welcome back to The Modern CFO podcast. As always, I'm your host: Andrew Seski. Today, we're joined by Chuck Fisher, CFO of Turo. Chuck, thanks so much for being here.
[00:00:18] Charles Fisher: Andrew, thanks for having me. Looking forward to the conversation.
[00:00:21] Andrew Seski: Turo is a trailblazing car-sharing company, revolutionizing the way we travel and explore. Under Chuck's stewardship, Turo has established a formidable position in the market. I don't think I can share any more genuine excitement to discuss all of my favorite topics from automotive tech, marketplaces, to platform powers, and even going back in time to talk a little bit about the early days in Chuck's career at Lehman Brothers. But one of the things I want to kick off with is Chuck: Are you a car guy? What was the last Turo trip you had, and what did you take on the road?
[00:00:50] Charles Fisher: A great way to start the conversation because Turo is a company that is really full of car enthusiasts. And I guess I would describe myself as one. There are certainly more hardcore ones inside the company than me, but I do love cars. I've always been interested in them. And I'm actually not only a Turo guest, where I've sampled a bunch of interesting cars, and I'll tell you about that in a second - but I'm also a Turo host, and I have a Ford F-150 pickup truck that's actually out on the road working for me right now as we speak. So I'm putting that vehicle to better use, which is great. My last Turo trip as a guest was in May in Boulder for my son's graduation. And I rented a Polestar, one of those EV vehicles affiliated with Volvo. And it was cool. It was a great car, really nice. And I always try when I'm a guest to find, well, two things.
[00:01:45] Charles Fisher: I'm always looking to find a five-star host, so somebody that I have confidence is going to deliver a great experience. And then I'm looking for a car that I'm curious about, that I might want to try, like the Polestar EV. I also tried one of the new Defenders right when it first came out, the Land Rover Defender. I've got an old Defender myself, and so I wanted to see what the new one was like. So, I'm always looking for something new and interesting to try, and there's all those cars available on Turo. We have over 1,400 makes and models on the platform. One of the key points of differentiation for us as a company is our incredible selection. So it's super fun for anybody who's interested in cars or anybody who has a specific use case that calls for a specific vehicle. We've got something for everything. So it's a lot of fun.
[00:02:33] Andrew Seski: You just mentioned right away one of the things I want to talk about in discussing Turo as a platform. One of the keys to success in car-sharing tech companies is user trust. How do you think about the role of trust both from a user perspective and in your role as a CFO?
[00:02:48] Charles Fisher: Yeah, the role of trust is really important in any marketplace business because the marketplace businesses … [are] the points of interaction where commerce happens between the host and the guest, whether that's Airbnb hosts or whether it's Turo hosting guests. It's that experience and exchange between those two individuals that is where all the magic happens, and it's where all the opportunity for something to go wrong happens. And we're very focused on trust and establishing trust in a couple of different layers. So trust between guests and a host: as a guest, you are taking something of a leap when you book a Turo versus a traditional rental car company because it's a new experience and it's unique and it's peer-to-peer. So you need to know that the host you're interacting with is trustworthy and that the vehicle is accurately represented in the listing. That the vehicle you're booking is clean, safe, and reliable, and that the host is going to deliver, meet their promise that they made to you in terms of delivering on time with all the features that you paid for. And so we spend a lot of time working with our hosts to make sure that when a listing goes live on the platform, the host is ready to deliver that exceptional service every single time.
[00:04:07] Charles Fisher: We're really instilling in our hosts this kind of idea of retail fundamentals so that the experience should be predictable, dependable, and trustworthy, so that no guest ever needs to wonder in their mind, "Is the guy going to be there? Is the car going to be what they said it was? Is it all going to look and feel the way it should? Am I going to feel comfortable with this exchange?" So that's paramount. That's kind of a foundation to making the whole platform, the whole experience work. And then there's trust between our hosts and Turo. For all of our Turo hosts, what we're really competing for is their time as an entrepreneur. They have a number of different ways in which they could pursue entrepreneurial opportunities, and for them to choose Turo means that they're not choosing something else. So there's a promise that is made between us and them that we're going to support our hosts to help them be as successful as they possibly can, to build their business, to provide them with insights so that they can make good decisions around pricing, vehicle selection, and how to merchandise their vehicle. All of those decisions that go into the hosting journey, we spend a lot of time working on, making sure that we're there for our hosts so that they feel supported, they can trust us. It's kind of the two layers of support between guest and host, and then host and Turo. And then if all of that's working, from my perspective as a CFO, then the business is going to - there's lots of details obviously underneath it, but those [are] the fundamentals that I'm thinking about when I think about how we can grow our platform and build the marketplace off that foundation that is built on trust between those parties.
[00:05:44] Andrew Seski: Yeah, that's a really well-put description of how you think about trust as a framework. I know way back in time, Turo was RelayRides in a different lifetime. And I know that the journey of the company has been quite a road trip, quite literally. But just in your last couple of years, what have been some of the most memorable pit stops, detours, however you think about it? And just the last couple of years.
[00:06:00] Charles Fisher: Well, I joined Turo in March of 2021. So I've been at the company about 2.5 years, a little shy of 2.5 years. And in that period of time, it's been action-packed from the get-go. When I joined, it was at a moment in time, if you cast your mind back, when we were all just coming out of COVID. Vaccinations were really rolling out in earnest. Restrictions were easing up, and people were starting to travel again. People were starting to travel again with some money in their pocket. So there was a great enthusiasm to get out of the house and recapture some of that freedom that we'd lost over the last couple of years. And a lot of that travel was happening domestically because international travel was still very complicated. And at the time that this was happening, all of the traditional rental car companies were massively supply-constrained. They had to defleet in the COVID years to stay out of bankruptcy or to hope to stay out of bankruptcy. You've got all this demand coming back online at a time when there's no supply.
[00:07:05] Charles Fisher: So in 2021 - and I joined at the beginning of '21 - our business tripled in size. But we grew top line by 213%. So when I joined, the company was about $150 million of revenue. And I was thinking about kind of some reasonable growth on that when I was thinking about coming on board. Turns out we go from $150 to almost $470 million in that first year. And at the same time we're doing all that, we're also actively working as a company, trying to get ourselves ready to go public. 2021 was the year of the IPO. Everybody was going public. SPACs were all over the place. We had considered, decided not to pursue a SPAC, and we're looking at a traditional public company process. We went down that path, got ourselves ready to go. By the time we were ready, the markets had closed, and that was okay. But it was a very incredibly action-packed first year with the business tripling in size at a time when the company from a resource perspective was probably sized to a business that wasn't even at the 2020 level - because in 2020, when we went into COVID, we had to lay off about a third of the staff to just make sure that we could weather that storm. Turns out we did fine. The company grew top line by mid-single-digit percentage - which was heroic, in fact, in that year. But we were behind in terms of our resource base. So we spent a lot of time and invested a lot of money in the team, and growing the team, and investing in the team, growing and investing in systems and platforms, and the tools that you need to be able to function and operate as a public company and function as a company that was now at the scale that we were operating at. We had to invest a lot in supply. And if … you spend any time thinking about marketplace businesses, it's this ever-shifting push and pull between demand and supply. At some points in time, the demand side needs a little bit of a push, and at some points in time, the supply side needs a little bit of a push. As a marketplace provider, you're monitoring that flywheel and pushing or pulling in one direction more than the other. And this was a time when supply needed help, and we needed to make sure that we could help our hosts scale their businesses as quickly as they could because demand was essentially insatiable. Pricing was going through the roof. And so, it was an opportune moment for us to pull forward a tremendous amount of customer acquisition, both host acquisition and guest acquisition, and to provide great experiences for all those people and help our hosts make money. So we invested a lot in putting more economics in the hands of our hosts to make it easy for them to think about the decision to bring on that next car, to try expanding their business, or new hosts to come onto the platform for the first time. We scaled supply meaningfully and were able to have that kind of really fundamentally sea change kind of year. And then in '22, we just built on that. It wasn't triple-digit growth, but we still did grow top line by almost 60%, finished the year with almost $750 million of revenue. And I should point out we were profitable both years, both in '21 and '22 - which if you know anything about the kind of marketplace space, it's saying a lot. So, it was a really tremendously exciting time to join the company, really proud of the effort that the team put in to get us here.
[00:10:17] Andrew Seski: Yeah, that's great. Thanks for sharing. And you mentioned if you're somebody who thinks about marketplaces, which is kind of one of my passions, in preparing for this episode I relistened to an episode of "Acquired," one of my favorite podcasts on platform power, and they broke things down into when you're evaluating platform power: how is economic value created on your platform? How does that value change as the platform becomes larger, has more participants attending it? And how does each group of customers perceive economic value from that platform? And then how does that change as the platform gets bigger? And I really like those kind of three questions as I'm thinking about how to evaluate a moat around market share grab, or like you were mentioning, pulling the strings of supply and demand. And I think that's an interesting framework to use, but I'm curious from maybe you could take us back in time and talk a little bit about what you learned in your experience at Lehman when you were thinking about being on the other side of the table, just evaluating the value of companies and being really strategic versus now. What your northstar metrics are for evaluating the power of the platform?
[00:11:27] Charles Fisher: You know, when I go back to my time as a banker, or prior to Turo, I was in a corporate finance role at Charter Communications, and we did some investing. We had a sort of a private investing platform that we did off the balance sheet. So we're looking at making direct investments in companies that Charter had a strategic relationship with. I think that the kinds of things that you look at when you're an investor, when you're a banker and you're trying to evaluate the health or the attractiveness of an investment opportunity. They tend to focus on the obvious P&L kinds of metrics. You're looking at volume growth. You're looking at what are the drivers of top line growth, which is at the end of the day for almost every business is price times volume of the two metrics. But what drives price? And what drives volume? And how can you think about what a sustainable growth rate looks like over time. And then you're looking to see, okay, where do we think profitability gets to? You're looking out into the future? And you're saying, okay, I see where we are today. But what do we think is a reasonable path towards steady-state profit margins, whatever those may be? And then what are the risks and opportunities along the way? What might accelerate the path to that? Or it might be a risk that creates a headwind to the business [getting to] the business of achieving those kind of steady-state targets in a reasonable period of time. And from inside a company as a CFO - and you're as more of an operator - you're certainly thinking about all those things as well. Because, at the end of the day, those are the outputs of all the decisions that you make, and you are also not immune to having a whole constituency that you need to speak to that speaks that language, like your board and your investor base and shareholders, whether you're a private company or public company. All of those things matter.
[00:13:12] Charles Fisher: But when you're inside and you're thinking about it as an operator, you might be thinking about details that are maybe a layer or two more … I don't know, granular than that, or more first order than that. When we think about the equation that drives volume - our primary metric for volume is days. How many days have been taken on the platform? Well, what drives days? Days are driven by search volume - searches that take place on our site, on our app, and then conversion of that search traffic into bookings net of cancellation. And then what influences that conversion ratio, and you think about the path from conversion from when somebody arrives on your site to when they get all the way through to a completed booking, there are many points along the way where you might lose somebody. So where are people dropping out of the funnel, if they are dropping out of the funnel and why? So, then pulling back and digging into that particular metric. It ends up being quite a bit more detailed. Then let's go back to search for a second. Well, there's new search and repeat search. And what's happening between new and repeat? And you can drill into that a little bit and try to understand what's happening at that level. And then you can sort of see how you take a P&L metric like revenue and you break it down into its much more granular component pieces that help you understand how to drive revenue. And then you can think about when you're talking about your path to profitability. One thing that's really important for all marketplace businesses that I know investors focus on - we had focused on it as well - is your cohort data, your guest, and your host cohort performance. When a new cohort comes on board, how does it perform? What's the retention of guests and hosts? And we measure revenue retention on the host side, and we measure gross profit retention on the guest side, because we're focused on attracting and retaining the most profitable guests. So, those are some of the things. There's so much more. One of the things that's fantastic about Turo is we're a very data-driven company. We capture and measure reams and reams of data, more than you can actually make sense of. So you have to be able to think, sift through all of that, focus on what matters, and then use that data to make good decisions.
[00:15:16] Andrew Seski: Yeah. I'm really glad you brought up being data-driven. There's a really famous example of, well, there are marketplaces like Airbnb and Uber, but the kind of famous Uber story early on of being competitive with Lyft was maximizing the data capture of the most efficient routes that people could take so that they are more freed up to deliver a better experience. Because if they made the most efficient route, delineated by the number of drives that were actually happening, both [the] drivers able to do more routes, and the … rider gets there at a more expedited pace. And that's a really good example in the era of AI that we should be thinking about. How can you take this massive sum of internal data that you're capturing and create a competitive moat or an advantage across some of the other things… Maybe it's capturing a new market or maybe it's fighting off competitors? I'm sure that's an active strategy, but [I’m] really curious as to, you mentioned, it's almost an overwhelming amount of data as to how you strategize and think of your kind of data strategy.
[00:16:17] Charles Fisher: I think Turro's example of that - the example you just gave around route optimization - our version of that is the data that we ingest and analyze to power something that we call the Turo risk score. And our scale and advantage and data have allowed us to develop this tool called the Turo risk score, which informs so many of the things that we do in the day-to-day decision making, but fundamentally what it does is it helps us understand and price risk appropriately. So we have probably the biggest barrier to cracking the code in the … peer-to-peer car sharing business is [the] cost of protection. The risk associated with the asset that you're out there booking is driving around the road and subject to get into accidents. So how do you manage the cost of that? And how do you make sure that you're appropriately pricing that risk so that you can grow, but grow profitably? And there's always this, in the early days of Turo and RelayRides and any other competitors that have dipped their toe into this space understand: you can grow or you can be profitable, but it's hard to do both. We have figured out how to grow and be profitable, and we've done that because the Turo risk score helps us ingest all of the data for all the billions of miles that have been driven on the platform and the millions of trips, all the different vehicle types, all the different markets, all the different use cases, and we can take all that data and in real-time, assign a score that manifests in a trip fee for a guest that shows up at checkout. And that trip fee is dynamically created, and it's based upon the inputs that are specific to that particular trip, not to the customer, but to the customer and the situation. So, you … might get a risk score that measures you as a segment A guest on one trip, which is the least risky.
[00:18:12] Charles Fisher: The next time you book, you might be a segment B guest and obviously you're still the same person, but something about the characteristics of the trip is different. So the fee that we will assign to a segment A guest is different than the fee we'll assign to a segment B guest. And that ultimately over time allows us to open the funnel up for demand and attract a much wider range of potential demand into the platform. You mentioned earlier on that you had booked the car, I think when you were 25 years old, and that would be hard to do on a traditional rental car company. You can do it with Turo because we have the tools to allow us to be able to price that risk accordingly. And so we can now attract all range of demand. We can price it accordingly. We can be profitable at the unit level, just irrespective of what type of traffic that we that we have on the platform. We also use that information that we get from that data to help us attract higher quality customers, higher quality demand, less risky demand. So we know the channels where we find that kind of demand and we can point our marketing dollars at those channels. So it's [a] really effective tool we use. It did help us inform everything that we do. And … there's so many advantages from getting to scale and the network effects that come from it in a marketplace business. One of the most important ones and maybe least understood is the power that you get from the data that you capture when you're this big as we are.
[00:19:34] Andrew Seski: Got it. So theoretically, if I'm in Philadelphia right now, if I wanted to go down to the Jersey shore, that trip would look very different than … making sure I'm getting a Ford and driving back to Detroit 89 hours away. Those factors would all come into that risk profile.
[00:19:49] Charles Fisher: Yeah, exactly. It's a proprietary data set, but it's things that you could think about, like the lead time, how far in advance from your that you make the booking, where are you making the booking, the value of the vehicle that you're booking, the form of payment that you're using all these kinds of things will infer different risk profile [aspects] to that particular trip.
[00:20:13] Andrew Seski: That's really cool. One of the things that I wanted to talk about is Turo's role in bridging a gap in transport insecurity, a topic that kind of came to mind to me last night. I was reading an article that said the rejection rate for auto loans had jumped from 9% up to 14% or so - 14½%. Do you think that Turo bridges the gap in insecurity of transportation in some regard?
[00:20:38] Charles Fisher: I think we absolutely do because one of the things that makes us unique - in addition to our unrivaled selection - is the convenience that comes from the density of our network. Think about where our supply is in markets across the country and frankly across all the five markets in which we operate. We're not just tethered to an airport and then a handful of locations in the densest parts of the city, maybe near the train station or, you know, midtown Manhattan, whatever, where all the traffic is. We're everywhere our hosts are. And so you can look at a map of any big DMA in the US and you can plot the dots where we've got vehicles. And then you can put a circle around those dots, based upon where our hosts will deliver that vehicle to. And all of a sudden, you're seeing that we have the ability to reach all corners of every market with vehicles that are available and accessible for folks. So, you need not be anywhere near a traditional rental car location, and you'll have access to a vehicle. Equally, it's a fantastic opportunity for hosts. It is an extremely accessible form or path of entrepreneurship. Anybody who owns a car, it's one of the more expensive assets that they own. We also know that cars sit idle 95% of the time. So, taking that vehicle … that you already own, putting it on the platform and having it earn money for you, even if you're only doing it casually, and your objective is simply to cover the cost of car ownership … it makes the idea of car ownership more palatable for folks. It smooths the path to entry into owning a vehicle, if that's something that you want to do. And he thought, you know what? I can't afford a car because I'm only going to use it episodically. But in those episodes, I really like it. Well, you get a car, you put it on the platform, you cover the cost of vehicle ownership. And now the sudden we've unlocked the path to mobility for you - but coming at it from the host side. So I think whether you think about it as a guest or as a host, I think the way we're set up and the way our network and frankly, the ease of and the accessibility of becoming a host, it directly addresses that issue.
[00:23:02] Andrew Seski: So, you mentioned early on that your last trip was one of the Polestars. And I'm curious. I mean, the public markets have interesting ways of measuring ESG, and you also said that cars are sitting idly about 95% of the time. Where do you see the kind of social - we kind of just touched on social, but in terms of environmental considerations, so maybe we can touch on good corporate governance towards the end of the episode, but how do you see Turo's impact on the environment taking form now?
[00:23:32] Charles Fisher: Well, I always think that the companies that are best suited to be leaders in the ESG space are companies where their mission is perfectly aligned with those objectives just naturally. By, you don't have to do all sorts of unnatural things to qualify as green. It's simply our core mission of putting the world's 1.5 billion cars to better use is at its core an ESG mission. It's an ESG mission because of the environmental impacts of putting these cars to better use so that you're not putting more cars on the road. You're taking existing assets and you're utilizing them more efficiently. That's obviously has tremendous impact from an environmental perspective. It's an ESG-focused company because of the access to entrepreneurship that we afford through the way that our platform works and scales and helps people build economic freedom through the ability to be a Turo host and how that how easy it is to scale. So those things are just sort of endemic to what we do. They’re core parts of our mission, and we don't have to do anything unique to kind of solve those issues. We have made a commitment as a company to be 100% carbon neutral. And so that means we do have to do things like buy carbon offsets because our office buildings, our infrastructure - that generates a carbon footprint, and all the miles that are driven on our platform generate a carbon footprint. So we're offsetting all of that. And I think that that sort of demonstrates our genuine commitment to these missions and these objectives. But even without doing all of that, the way we operate and the problems that we're solving, I think squarely land us right in this, in the sweet spot from an ESG perspective.
[00:25:15] Andrew Seski: Yeah, that's a great answer. I want to sort of segue into the kind of the "oh, shit" moment of what happens when you recognize that there's such a big opportunity here. I mean, you think about some of the biggest platform players of all time. When Salesforce came out, people would say, "Who would ever put their personal Rolodex on the Internet? It's a crazy idea." Or Airbnb, "Who would ever let somebody go into their home?" So there's that element of trust and democratization that's happening. It appears for you personally, when you have that realization that this was a unique role and timely for you.
[00:25:38] Charles Fisher: Yeah, when I was approached about this, well, it was right around December, kind of Christmas time of 2020. And I learned about Turo and the opportunity in the CFO seat from IAC, who are our largest shareholder. And I've had historic relationships with some of the leadership there. Glenn Schiffman, that was the CFO of IAC at the time. And he's somebody that I've known for decades going back to Lehman. He was my boss at Lehman. He has been a mentor, and a friend, and somebody that I stay in close touch with, and he reached out to me about this Turo opportunity when he was at IAC. And I hadn't heard of it at the time. It hadn't hit my radar. And so I did some research and I started poking around, and I thought about the magnitude of the opportunity, the fact that when you think about how traditional rental car companies operate and how little innovation there's been. Frankly, in my entire lifetime, as long as I can remember interacting with traditional rental car companies, the experience has been fundamentally the same and it's fundamentally not that interesting.
[00:27:00] Charles Fisher: And so I think that when you look at a competitive landscape that is traditional offline competitors who are not necessarily focused on innovation, and you can bring technology and you can bring customer orientation and a focus that is truly innovative to that, a space where there's a massive opportunity - and not only that, and I think that this is the key unlock for a lot of people when they were first starting to think about Uber as an opportunity or they first started to think about Airbnb as an opportunity. The same kind of unlock applies here with Turo is that we're not just ... You don't just think about the opportunity by saying, "Okay, what market share can they take from traditional rental car? Okay, the traditional rental car market is X billions of dollars. If they can get to 10% market share in X number of years, the business will be this big. Oh, okay. That's interesting. And let's see how they do.” That's how people thought about Uber initially. They said, "Okay, let's look at taxis and black cars and see how much share they can take from taxis and black cars." They thought that about Airbnb and they said, "Okay, what's the hotel opportunity, how much share can they take from hotels?" In both of those cases - and the same is happening with Turo - it is both about share gain, and it's about expanding a market to a whole new set of use cases that it completely increases the addressable market opportunity.
[00:28:20] Charles Fisher: And so when you think about Turo from that perspective, how innovative it is, how unique and fundamentally better the experience is, the Turo over traditional rental car. And [don’t] take my word for it. Our guest-side NPS score hovers around 80, and just look up what traditional rental car companies' NPS score is, and you'll see that there's a night and day difference in how customers perceive the experience. And then you think about how we will unlock so many new use cases to create a whole new market. I thought it was super exciting and it's a fantastic group of people that are building this company. And so it was just an easy decision to come on board. And that was before I knew that COVID and everything that was going to happen was going to unlock the growth that we saw in '21. And then we've been able to carry forward from there.
[00:29:09] Andrew Seski: I'm not positive everyone understands NPS scores, but that's a net promoter score. It's essentially quantitative way to evaluate … it's like a number for a Yelp review, essentially.
[00:29:21] Charles Fisher: "Would you recommend it to a friend?"
[00:29:23] Andrew Seski: Right. And I am actually going to go check after this episode, what some of the rental car NPS scores are just for fun. I can imagine that that is going to be pretty entertaining. Well, I want to segue a little bit into your career as a CFO. A lot of the listeners are aspiring CFOs or first-time CFOs looking for playbooks to adopt. I would love to go back in time and talk about how you cut your teeth on Wall Street, lessons you learned about maybe corporate life in general. I remember my first job at an RAA. I got the 10 commandments of the firm, and there's still things I think about every once in a while today. Kind of interested to hear, fresh out of school, which division you're at Lehman and some of those kind of early mentors and any of the events that took place in those early years that you feel were shaping.
[00:30:10] Charles Fisher: Yeah, it's an interesting path. And each of the steps that I've taken along my career, I think have provided some component of the foundation that's led me to the CFO role today. I mean, it certainly starts with my decision to go to business school that provided me with the foundation, all the prerequisites that made everything that came after that possible. I did a few years as a management consultant, a strategy consultant at Monitor Company in New York after I graduated from Columbia. And that was a fantastic opportunity to just get yourself involved in a whole cross-section of different industries in different problems, and how do you think about corporate strategy in different kinds of ways and applications, whether it's marketing or finance or whatever. That was like a second MBA almost in a way.
[00:30:56] Charles Fisher: I quickly, though, after a few years, moved over to Lehman, and I joined what was called the CMG group, communications and media. I thought I would join and be a comm specialist because I did telecom work at Monitor, but I ended up getting staffed on media projects and I found them to be really interesting. And more importantly, I found somebody that. I really thought I could learn from and who took an interest in my career and that that's the guy I mentioned earlier, Glenn Schiffman, who was an MD in the media group and somebody early in my career when I was starting in banking said, gave me a piece of advice that I remember to this day, and it turned out to be really, really wise, which was: Don't worry about trying to follow the deal flow and go where the action is. Find somebody that's going to take an interest in you. And it's going to help kind of shepherd you through the political machinations of an investment bank and help you grow and get better experiences and get exposure. And if you can get a person who takes an interest in your career. And by the way, you do the work to make sure that you're indispensable to that person, that there's a trade going both directions that will serve you better. And that will put you in the position to continue to grow and get more quality experiences that will ultimately speed you through the ranks.
[00:32:22] Charles Fisher: And I found that in Glenn, and he was a great teacher, a great mentor. He gave me great opportunities. And he was a fantastic example for me with thinking about the work ethic that's required. When I think about like some foundational stuff I got out of investment banking, in addition to obviously the core corporate finance skills that you learn: how to do valuations, and how to think about structure, and all those kinds of things. It was about the work ethic that's required to be successful and the customer mindset, the customer orientation. Investment banking is very much a customer service-based business, and the client is right and you need to figure out a way to make sure that you're one step ahead. And that kind of orientation towards thinking on obsession with the customer is a thread that's run through the rest of my career. And then the other thing I took away from banking is teamwork, [it] is very much a team sport. And it is so encouraging to be a part of a culture, which Lehman was, where you win together and you lose together. And when things don't go your way, it is a team effort and when things go your way, it's a team effort. But it's equal on both sides, and that really stuck with me. So as I grew to be more senior in organizations and had more opportunity to build and lead teams, I thought about that a lot. My next chapter was at Charter Communications, and it was probably only once I got to Charter that I thought potentially a CFO role could be something that I could aspire to. And I worked for the kind of the second person in my career that made a lasting impact on me. And that was Chris Winfrey, who was the CFO of Charter at the time. He's now the CEO of Charter and he was my boss for the entire time I was there. And he showed me, again through the example of his own work, what is required to be an effective CFO. And what I learned from watching him is how fundamentally operational the role is. You think about the CFO job as being about the numbers and about accounting and closing the books on time and the K's and the Q's and then the FPNA and doing the planning and the budgeting, the forecasting, managing the balance sheet and of course it is all of those things. It absolutely is. You have to have them. but I think about those things as kind of table stakes and that's the price of admission.
[00:34:57] Charles Fisher: But if you want to be a truly great CFO, you have to have a lot of energy and enthusiasm for all aspects of the business because you're going to be a partner to the HR lead. And you're going to be a partner to the marketing lead and the head of engineering. And certainly you're a partner, a strategic partner, to the CEO in everything that is going on in the company. And so, watching the way Chris devoted his time and energy towards the operational details of the business and being a true support system and partner to all of those other departments. And then kind of when his day was done, 5 o'clock rolls around, then he would turn his attention to what you might think of as the traditional CFO stuff. He would then start thinking about the next bond deal or an M&A idea that we could be considering, those kinds of things that could ultimately have sucked up all of his time.
[00:35:52] Andrew Seski: Yeah, that's fantastic. I mean, that is essentially a great definition of what a modern CFO should look and act like. I remember this - brief aside, really early in my rowing days, I was at a banquet. I met this incredible guy, entrepreneur, really, really successful. And I asked him for a piece of advice, and he said, "You should create your own personal board of directors. If I could go back in time and I was making big decisions on growing my business or you know, personal life choices and big financial choices, I wish I had put together important people in my life who could, I could have as a soundboard.” Now, fortunately, I don't have them as a formal board in real life, but you have a board to answer to. You've got likely shareholders, investors, C-suite. When you think about aligning all of those interests and thinking about [what] you said a great comment on making sure that it's a team sport and you win and lose as a team, as we go through different bottle markets, right now we're in an interesting world in the private markets with a lot of down rounds, a lot of … slashing of kind of pandemic era valuations going sky high. I'm curious as to how you think about alignment of interest and conflict resolution.
[00:37:03] Charles Fisher: Well, I mean, I think at the end of the day, everybody's interests are generally very much aligned. We think about from the management seat - you're thinking about some of your obvious core constituents, like your employees, and your shareholders, and your board of directors, which often are representatives of your shareholders. And those are very important constituents and thinking about making decisions that create shareholder value are fundamentally going to be decisions that will be in the best interest of your employees, because you're going to be building a healthy, more vibrant company that's going to grow in value, will give more opportunities for more people. But what that starts with is thinking about the other constituents - kind of underpin all of that, which is your customers. It's the hosts and guests that make the platform work and I think that one of the reasons that we've been able to be as successful as we have been at Toro is because of our maniacal focus on the customer experience, on the host experience and the guest experience, and never being satisfied.
[00:38:09] Charles Fisher: You know, the business has been around for, I guess, 12 or so years. Andre's been the CEO that whole time and he would tell you if he was here today that he still feels it's very much year one, if not day one. We think about all of the things that we want to do to make the product, the platform better, to make the experience more delightful for the guests, make the hosting experience more seamless and easier, and enhance the economic opportunity for our hosts to build businesses and really unlock economic value and opportunity for themselves. And so if we stay focused on the hosts and the guests and the platform experience, making that work, then the other constituencies that I mentioned earlier, that one often starts with when they think about a CFO and who are you managing for - your investors, your board, your shareholders, your employees - all of that will take care of itself if you're taking care of your customers.
[00:39:05] Andrew Seski: I always pick a point in the podcast and tell people to just hit that back 30-second button a few times. I think that's one of the biggest takeaways I think listeners can really glean in if you're in a C-suite position, just focusing on customers so that you can get success onto your employees and then ultimately your shareholders as well. I think the way that you're prioritizing and picking up a real clean, great look at that kind of priority list and focusing on day one, there are great lessons from some of the most successful companies in the world that have kind of laid out that roadmap. So that's really exciting to hear. I want to zoom out a little bit and talk about what you think may be most exciting in the next three to five years, whether it's a technology shift or expansions into [newer] markets. But yeah, maybe just in a more general sense, something that you're looking forward to kind of on a broader scope.
[00:40:01] Charles Fisher: Well, I think that from a Turo business perspective, I think the next 3 to 5 years are going to be really exciting. There are so many new innovations and enhancements, improvements to the product that we're rolling out. We are kind of at a micro level. Last year, we acquired a business in France called Wecar. By the end of the year, we'll have that integrated and fully operating as Turo France, will be one platform. Last year, we also launched a business in Australia and that's going to complete its first year and it's doing phenomenally well and will continue to grow. We had spent the last couple of years putting ourselves in a position as a company to go public and who knows what the future has in store, but with any luck, the markets will cooperate and we will be a public company. So getting that important and exciting milestone behind us, it's really a unique moment for a company, any company going through its journey from small startup to late stage private to ultimately being a public company. It's a great milestone. It's just a step along the road and it's not the end.
[00:41:05] Charles Fisher: It's really more of the beginning, but it's still a milestone that we're looking forward to. And then when you think about the pursuit of our mission, we've - I've said this before early in the podcast - put [some of] the world's 1.5 billion cars to better use, even with all the growth that we've had over the last few years. And it's been - we talked about what ‘21 meant for the company, and in ‘22, we grew top line, almost 60%. And we grew our hosts and our guests side of the business. From the guest perspective, we grew at 75%; from the vehicle on the platform perspective, we grew 67%. But even after all of that growth, we still only have about 330,000 active vehicles on the platform. 1.5 billion cars in the world, 330,000 on the platform today. We're just scratching the surface. There's so much runway in front of us. And I think that's one of the things that makes Turo so exciting is: you spent so long building the foundation of all the elements that you need to make this product work, to make the unit economics work so that you can not only scale, but you can scale profitably. And having done all that - and I think through the development of what we have now unlocked and what we're building for our hosts and our guests, we've built some real competitive barriers - I think the opportunity to build from here forward is really exciting. I'm looking forward to seeing where we go. It could be new markets, could be new verticals. It could be all of the above. But what I do know is we'll continue to stay focused on delivering world-class solutions for our hosts and guests. And if we do that, the next five years are going to be fantastic for Turo.
[00:42:44] Andrew Seski: Back to CFO advice for just a moment. There is such a small pool of successful CFOs who have done really great IPOs, and it becomes a bit of a bias where people are trying to find CFOs who have a bunch of IPO and roadshow experience and working with bankers and doing another fundraise, liquidity event, all of that. It's a unique transaction type, and it's difficult to break into. What advice would you give for somebody kind of looking to become a pre-IPO CFO without IPO experience? Maybe something you learned over the last year or two, even if it's just … you've got to be in a great exercise routine to have mental clarity or … yeah, anything you'd like to share about what would be useful for [aspiring] CFOs considering that role?
[00:43:30] Charles Fisher: Yeah, yeah, you're 100% right that it's kind of a frustrating chicken-and-egg for a new CFO trying to become a CFO because every company that's going through its search is looking for somebody who's already done it. And so, definitionally, if you've never done it, how do you ever do it? How do you ever get that first opportunity? And so, you have to [have] some combination of luck and self-awareness and preparedness to put yourself in a position to be ready for that right opportunity when it finds you. And I think that that's the self-aware part is: understand what are the skills and experience and the value that you can bring based upon what you've done in your career. And every CFO comes into the CFO role from a different direction. You might come from the accounting kind of vertical and that's your strength. You might be an FP&A person and you've had a real background in forecasting and planning and budgeting and thinking through working with the business to plan. Or you might come at it from the capital markets, external facing, more corporate finance side of the business. And any one of those paths into the job is fine, but you sort of need to recognize where do you come from? And what is the company looking for? What skills do they fundamentally need? And look for those opportunities and be ready when those present themselves. And that was where I was lucky with Turo: they were - at the moment in time - they had had a great CFO who took them through their journey up into a point, but they were wanting to embark on a public market opportunity.
[00:45:08] Charles Fisher: It was a big sort of pivot for the company and finding somebody who had a lot of experience with and credibility with Wall Street. who understood how to talk to investors, who understood capital structure, how to raise money, how to think about balance sheets strategically, how to think about M&A and use that as a tool to grow a business. All of those kinds of skills were the skills that I brought, even though I hadn't been a CFO in my time at Charter. I'd run the capital markets function, I'd run M&A, I'd overseen investor relations. I oversaw procurement. I oversaw treasury. So I got a good cross-section of experiences, and when there was that moment where there was kind of like the product market fit between me and Turo, I was able to take advantage of it. And then what you need to remember though, [as] a new CFO coming into whatever company that you that you join is: remember where you came from. And if you're your strength is the capital market stuff, that means definitely you're not as strong as the other things. And so when you do join the company, make sure you lean extra hard into those other areas. Don't gravitate to the things that you're comfortable with. It'll be easy to go back to your comfort zone, but I would encourage any new CFO to spend more of their time away from their comfort zone in the areas in which they need to make sure that they're. building their companies and the capabilities, build a team around you of people that have those strengths to compliment yours. And just continue to be curious in all those areas and you'll be fine. And it is once you get into the role, you realize. you could do it. It doesn't require having been a CFO before, but you do need a little bit of luck.
[00:46:52] Andrew Seski: One more piece of advice. There are a lot of marketplaces launching right now. You mentioned the company is over 12 years old and it's taken some time to get product market fit to then have this breakout growth. What are some of the things that you think [were] solved for? And because you said chicken-and-egg, just had me thinking about the classic marketplace dilemma of, we're throwing a party - how do we get people there? How do you build the two-sided marketplace? What do you think was the sole defining moment where you really felt that, or you studied in the past, that Turo had that product market fit and an ability to ramp up scale?
[00:47:24] Charles Fisher: Well, I do think that - while it is a flywheel and both sides need to work - what we found is that fundamentally getting the supply side right, making sure that you have, for us - the right kind of vehicles and in the market, the right depth of vehicle. So you need so you need enough supply and it has to be the right kind of supply, and it has to be at kind of the local market level. So, when I quote statistics when I'm talking to investors and say, oh, we've got, 334,000 active vehicles in search and that sounds great. 3.1 million active guests. Those are sort of, vanity metrics. But what really matters is: what is the composition of the demand and supply in San Francisco at any given time, or in Detroit, or in Miami? Pick a market anywhere. London, Toronto? And making sure that you've got the right characteristics in that marketplace. And it usually what we find is when we get the supply side right in a market, the demand side really works. And you know it is not there yet when the guest comes and searches for a vehicle, and there's nothing available - or there's nothing available in their price point. And this is their first experience with Turo. They look at that and they say, “Oh, well, I guess Turo doesn't really work or it doesn't work for me. Maybe it's the wrong kind of fit.”
[00:48:48] Charles Fisher: When that experience happens, then the velocity of the flywheel spinning starts to slow down. So, if you have that experience where the guest comes to the platform, they open up the app and there's a whole range of choices and all different price points, all different types of vehicles. They're like, “Wow, that's amazing. Look at this. This is great. This is crazy. Good. I could get something super affordable if I want it or I want to splurge. There's a really cool, fun car I've always wanted to try.” So, when you get that working, the demand side takes over. And then when the demand side takes over as you know, hosts make more money. When hosts make more money to add more vehicles and supply starts … And that's the whole flywheel, the network effect. The notion that every incremental participant in the marketplace adds more valuable value for all the incumbents in the marketplace. And when you get that working, and then you start to get going cross border, and you're in Canada, and you're in the UK, and you're in France and Australia, then it really starts to pick up steam.
[00:49:44] Andrew Seski: That's really well put. Thanks for sharing that. I'd like to wrap up on my favorite question. what do you feel is underestimated in the world today? And it doesn't have to be related to business. It can be anything that's topical or top of mind for you.
[00:49:57] Charles Fisher: Well, I think the thing that I think maybe is underestimated - I'm not sure it's underestimated in the world today, but I think it's underestimated in the business world today. And I think that's empathy. I think about the value of empathy. When I think about empathy, traditionally or historically, I sort of think about it in the context of my relationships with my friends and my family, and making sure that I'm being a good father or a good friend and listening and being empathetic to what's happening in the lives of people that I care about. But I think it's equally important in the work environment. And I think we think about it in Turo in how we can foster empathy for our hosts and our guests. One of the ways that we do it at Turo is to encourage as many of our employees to actually be guests and to be hosts and to be actually living that experience. And it's not until you live that experience that you can really tangibly understand what are the frustrations that a host might have when they're trying to list their vehicle for the first time, or what frustrations a guest might have when they're landing at an airport in a city they're not familiar with, and they need to connect with their host and it's not as easy as it should be. And so having the experience of being a guest, being a host, gives you a kind of empathy that is hard to come by if you don't actually live the experience. And it's a leadership by example with our CEO from day one, putting his cars on the platform. He's been a host and an all-star host from the beginning.
[00:51:30] Charles Fisher: And while it's not necessarily viable for everybody that works at Turo to be a host, we've got a huge percentage of us [who] are hosts. I'm a host. I'm proud to say I just made all-star host a couple of weeks ago. So that was a cool milestone. And I can honestly say that by taking the time to put myself in the shoes of hosts by actually being one, it's given me an appreciation that helps us as a company [to] build better tools, iron out the kinks, reduce friction, make a better product. And of course you could extend the sort of notion of empathy to your employees and putting yourself in the shoes of all of them and the things that they're experiencing to help you be a better partner, a better leader. That's the thing that comes to mind for me today is: in business, having true empathy for your customers, and then acting and behaving as a business with that in mind, so that you're addressing the issues that make the experience for your guests, your hosts better. I think that is differentiating. And I think it's powerful. And I think we're doing our best at Turo to try to live those values.
[00:52:40] Andrew Seski: That's exciting. And congratulations on all the growth and all of the success. Thank you for your time today, Chuck. It was a pleasure to meet you. And just as a quick reminder, none of this should constitute as any sort of investment advice and just wanted to make sure that I was out there, but thank you for joining another episode of The Modern CFO podcast. I hope to just be in touch, and we'll talk again soon.
[00:53:01] Charles Fisher: Thanks, Andrew. Appreciate the conversation.