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.
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.
[00:00:00] Andrew Seski: Hello and welcome back to another exciting episode of the Modern CFO Podcast. As always, I'm your host, Andrew Seski. Today I'm thrilled to be joined by Mohat Daswani, CFO of ThoughtSpot. Thanks so much for being here today.
[00:00:22] Mohit Daswani: Thanks Andrew. Look forward to this.
[00:00:23] Andrew Seski: So you started your career and cut your teeth on Wall Street. I'd love to hear your framework, how you evaluate strategic decisions, having experience on both sides of the table, CFO of a incredibly quickly growing company. And I'm curious as that, how has that informed essentially your relations with your investors, learning how to ask the right questions? We'd love to explore that.
[00:00:46] Mohit Daswani: Yeah, no, absolutely. I spent the first decade of my career, a couple of years in banking, but then the rest was on the investing side, private equity investing, first across a range of companies. Everything from venture to full on buyouts of slow growth industrial companies. If you've ever been to one of the plants, I won't mention the name, but was a manufacturer of frozen dinners. And if you want a reason to get healthy, go visit the plant. They show you how they batter the chicken, fry it in massive vats of oil, and then spit it out and put it in the trays and pack it up. That'll get you healthy pretty quickly.
[00:01:22] Mohit Daswani: So I got a chance to see - it's fun early in your career, go see a range of companies, get a chance to understand how they work. What you learn, though, is to understand business models. And to understand what are the economics of a business ultimately, right? As a private equity investor, you're trying to make a decision in a relatively short amount of time, whether to invest in a company when they're raising, because often there's a banker involved - or otherwise. And so you definitely build that domain expertise in certain industries. And I think the reason to do that is you get a lay of the land on what's going on, sort of zooming out in that industry: growth rates, competitive dynamics, and trends, what might be happening as far as new technologies, capabilities, foreign competition, things of that nature, depending on the industry. So you get a very good lay of the land. And then, ultimately, you get a lens through which to understand a business and okay, what is this business? Software businesses have certain characteristics that you're looking for in terms of gross margin and recurring revenue and retention and go-to-market acquisition. Other businesses, media, et cetera, might have other metrics.
[00:02:27] Mohit Daswani: And so you go through that exercise a lot. And that's the fun of it. And I think the intellectual challenge of it is getting your hands around a business. And then that gives you a framework to be able to say, “Okay, this is what good looks like in a particular segment, right?” When we look at companies that have done well - and investors love to pattern match - then talk about, okay X, Y, Z company is the leader here. Certainly in SaaS, plenty of names to go, pattern match against whether it's service now, in terms of their durable growth over the last decade, whether it's a modern snowflake and some of the pricing and stickiness that they've built with their customers. So you got a chance to then pattern match against what good looks like. And I think the main thing, though, is when you strip it away - and I think you get this in private equity, I don't know if you always get this on the public side - but it's stripping away from below the headline metrics, financial metrics, to what are the operating metrics and cadence that influence that. And that's what you get into in private equity.
[00:03:23] Mohit Daswani: It's like, okay, we want to see customer churn is this. Why is that? And you dig into the data and you dig into, well, it could be our pricing. It could be because of competition. It could be because we're going through a change in the industry and there's someone else taking share. Could be that we're just not doing a great job with it. So you start to understand the operating metrics and data behind the financial metrics, and that's really valuable. And I think as it translates to your question on being a CFO and why, for me, I made the move, now you get to put that into practice. And so you know what good looks like. And as CFO, you can say, “Hey, well, R and D should be this percent of revenue, payback period should be this.” And you certainly will share that. But then the fun is you're digging in and saying, okay, where are we relative to that and why? And if our metrics are maturing still, okay, let's understand why.
[00:04:13] Mohit Daswani: Like, in our case, we went from one segment, which is enterprise to majors, the largest companies in the world, to commercial. Each of those is a different cadence, a different sales cycle, a different maturity. And so we look at each of those individually and can understand how each of those behave. And then you can make decisions as opposed to just applying like one metric and saying, well, they all got to get to this number. Well, they're different. So I find that very valuable, which is breaking down a business into its components, understanding the drivers behind the financial metrics that you're trying to get into, because that then just influences how you built, right? And it influences how you talk to investors. We just went through, and are on the other side of, a major move to the cloud in our business. We're an 11-year-old company today. But the first 6 years, we’re in a world in which data was hybrid or on prem. And our deployment was that, and we moved the business completely.
[00:05:05] Mohit Daswani: As we were going through that shift, it was important to demonstrate to investors what to expect and then what that would look like and how that would play out, and take them through the journey. And because, ultimately investors, I think they're willing to bet behind teams and do something bold like that, but they kind of don't want surprises and they want to understand. "All right, help me understand how you're doing as you go through this." So I think being able to communicate that and like, this is what you're going to see. Like, in our case, gap revenue is going to slow down because you're going from … Nope, we won't get into the accounting, but [ASC 606], we are going from an on-prem upfront weighted revenue recognition where you get most revenue upfront, to now it's ratable.
[00:05:41] Mohit Daswani: Good thing for our business, but for a couple of years, that means there'll be a headwind. Here's what you should expect. Here's how that'll play out. And we're on the other side of that. So I think it's invaluable having an investor mindset and experience coming into a CFO seat. I feel it's super helpful, certainly not just in the obvious engaging with investors and the board. But then being able to just guide your peers on the management team on like, let's look at the underlying operating metrics that are going to lead to the performance we want and help shine light on that and help sort of bring clarity and visibility. So, yes, I think in a nutshell, being able to understand multiple business models, being able to dig below the financial metrics to the operating metrics, and then be able to articulate what good looks like and to help build a plan to get there are, I think, attributes you really get being on the investing side.
[00:06:29] Andrew Seski: Yeah, it's really well put. Thanks for that. I was listening to another podcast that you were on, and you were explaining the level of transparency that you promote with your investors and how often you're communicating. And I'm wondering if that is indicative of a mentor early in your career. I was talking to Chuck Fisher from Turo on one of my episodes just recently, and he was mentioning that it's a relationship business. His route from banking to a CFO seat was a relationship with an early mentor back at Lehman. So I'm curious if you had that kind of leadership early in the career or if there were early influences that kind of guided and shaped the way that you promote transparency.
[00:07:07] Mohit Daswani: Yeah, totally. And there is some of that. Absolutely. There's 3 things really, I'd say. One is ThoughtSpot is a company. Our mission is to build a more fact-driven world, right? We make - and we'll get into it - we get access to information easy and at your fingertips in the enterprise. And so that is what we do. We are looking to help companies be able to make data-driven decisions and bring that as they try to do that as part of their culture. So for us to kind of do that ourselves, it's natural, and we want people to see the power and enablement that I think comes about when you have access to information—you cut away the noise, you cut away opinions, and you get to the facts.
[00:07:42] Mohit Daswani: So one, it's a cultural thing for us, and I do believe personally, it's quite empowering, which I'll get to. On your question on mentors, absolutely. What I would say are, really, 2: my first role was at PayPal when I went into the corporate side, I spent a lot of time in FinTech and we were in the mobile payments wave that was capturing, taking hold. And I thought PayPal would be interesting place to explore some of that and experience that. Bob Swan ran eBay as their CFO, helped run the business, and PayPal was part of eBay. And I think every meeting I was in with him was, he always started with whatever, you know, you had prepared for presentation materials is all fine. He had dug into what he wanted to know and prepared and come in and said, okay, that's all fine. What about these three things? Right. Instead of cut right to the heart of it. And those were the right things to talk about. And so I found that was people talk about too many meetings, over meetings, this, that, so I cut right to it and just cut right to the chase.
[00:08:37] Mohit Daswani: And that I think comes from having access to information and being able to form a format, a point of view. So I found that very motivating. And then Square has incredible culture on many fronts, one of which was that transparency. Sarah Friar, once a month, in front of our company at the all-hands would do … actually every two weeks, we would meet and she would do a double click on the numbers, but we would do it not just with like, “Hey, here's a recap of the numbers.” We would pick a storyline. We would pick something that's going on in the business, a trend and that we wanted to highlight, like for example, Square moved from SMB to midsized merchants and larger merchants. And we wanted to talk about that as a really strong performance metric at the company, but provide numbers around it. So we would provide the financial update that way. We wouldn't just give the same metrics every week and say, here's how the PNLs moved, et cetera. It's like, hey, look at this. Our business is going up market, and here's what that looks like. And here's what it means for our ARR. Here's what it means for our average customer size and our ability to add more products and then grow and then zoom out and say, that's now how it's showing up in our revenue growth.
[00:09:39] Mohit Daswani: So I thought that was extremely powerful and it was a session people looked forward to because it is refreshing to have numbers presented in a way that tells the story. And so that's very much the approach that we take as well. The final piece on that, the third one, I would say, people talk about being strategic CFOs, etc. At the end of the day, you kind of know—you make your strategic decisions on which market you're playing in, how you want to position your product, etc. And you test and learn, but you're not changing strategy every few months, right? It shouldn't be. And so then ultimately, as a CFO, it's bringing the data that supports how we're doing against the bets that we said we're going to make. And hey, we're going to be great here. Okay. How are we doing? Right? Like we started an embedded product and we're like, we're going to test and learn in this internal, what's called embedded analytics. So third parties using our analytics as part of their product, whether it's a software company or a marketplace, and be able to show like, wow, look at how that's growing.
[00:10:31] Mohit Daswani: Look at the sales cycles there, look at what that's doing. It's quite powerful. And then that influences where we're going to invest as a business. So I do think, as CFO, ultimately being strategic is just having your fingers on the data that tells the story of how we're doing and the bets we decided to make, right? Because that influences decision-making. So it's really those three elements. I would say cultural for ThoughtSpot, certainly roles of influences of folks that I've worked with, and then where I feel like a CFO can be most effective or why take a view towards being more transparent on information.
[00:11:04] Andrew Seski: Excellent. Let's dive right into ThoughtSpot. I know that Mode Analytics was a recent acquisition—is very excited. I'm interested in kind of stepping back and maybe providing some advice or counsel to CFOs who are being tasked by investors, board members, their CEO, how they're going to leverage AI in the workplace. And basically, how you have thought through an artificial intelligence strategy. I'm not sure anybody could have predicted that Sam Altman and Elon meeting on Sand Hill Road over breakfast, could have turned the world upside down and it's really changed a lot of the venture community and a lot of the software communities into just almost a different market cycle. It looks really different than 2022. So would love any sort of guidelines, guardrails, or advice that you may have in this experience.
[00:11:53] Mohit Daswani: I mean, that's the beauty. And we take this for granted, but it's why people come here. You know, I've worked in more traditional industries for a while and then came into the Valley and you've got an ecosystem, of talent of ideas, and capital. It's willing to back them up. And as a result, you get these incredible waves of innovation. And I think we take it for granted, but it's truly a special thing about the industry we work in. And so you're absolutely right. We're seeing the AI wave become the dominant theme right now after a bit of crypto, a bit of metaverse. You don't hear much about those as much anymore. And so we'll see if this wave has more legs. I think it does. So a couple of things on that front and we'll talk about Mode as well. Our business, you know, if you look back at our at our marketing, you look back at our website, AI is not a new thing that we just plopped on the last couple of years because it's the hot thing. The challenge we set about to solve was this when we got started, we exist in the broader business intelligence industry. So you already had your Tableaus, you already had your Clics, which were providing visualization tools. And the way you work with them is, I'm a BI team and a data analyst sitting within a company.
[00:13:00] Mohit Daswani: And I have requests from the CMO or the CFO to go and create these dashboards so they can track their metrics in a way they can understand, right? Create visualization, everybody's seen these, bar charts, pie graphs, what have you. And so that made for a very easy way to consume information. And it did require, though, that BI teams have the technical know-how to know where the data sits, where to pull it from, work a database, run SQL queries to go do that. And the challenge we wanted to set is like, what about the people who don't know how to do that? Right? And so what about the folks who are on the receiving end of a dashboard? But, like, wait a minute, I've got 2 other questions or I want to understand better what's going on. And I actually have a new question I didn't think to ask. And now I have to go back to my BI team or the finance team to go pull this. We said, can we cut out that lag? Can we cut out that friction and make it easy for you to get answers to your questions? Now, that means you don't know how to run SQL. You have no idea where the data sits. And you just want the answer.
[00:13:53] Mohit Daswani: And so in order to do that, we built the product from the ground up to enable that use experience. And that required machine learning. That required us being, you asking a simple question using a keyword search. And us being able to go figure it out for you. And figure out where that data is based on the logic that you've applied and us saying, Hey, you asked for top-selling products. That means sales. That means, et cetera, down to the skew level or what have you. And then we surface that for you and we run the SQL queries and everything in the background. So that required effectively the work that a few data analysts would be doing to do it inside the product. That did require AI and machine learning. So it's always been a part of the fabric of the product. Today what the beauty of AI is, it truly does bring natural language capabilities to a broad range of applications, right? And so what we were an early adopter there and what that allowed us to do is go from the experience. I just took you through, which is a keyword search, to true natural language, right?
[00:14:46] Mohit Daswani: Our product is a keyword exploration product. So “top 10 products in Japan.” And then we would do all the work from there. Still quite intuitive. With LLMs today, and we integrate with GPT is you can just ask, what are my top selling products in Japan? We will take that, but we'll integrate with an LLM. We will translate it to the keyword search that we know how to break it down into, and then we do everything that we've normally done below the surface. LLMs, you can't just plop an LLM on enterprise data and have it run that experience. So because of our strategy and positioning, we're well-equipped to go to really take that last mile and translate to natural language search. So we're super excited about that capability. I think it only continues to fortify the vision that we have, which is make it easy for anyone to ask questions. So that's a bit on, and we can talk more on AI, obviously, but that's a bit on how we are seeing that play out. And there's a bunch of natural extensions. I don't think three, four years from now, BI is waiting for you to ask a question. It's going to be like, okay, you're a CMO, here are the metrics you care about, you're a CMO of a SaaS company, kind of get what you're looking for.
[00:15:49] Mohit Daswani: Let us start to populate things for you, a live board for you, and then let us start to surface things, right? You need to be thinking about your funnel conversion, your funnel conversion just changed week on week, or you need to be thinking about this event that you just had, and how many leads came out of it. Let me trigger that for you, because you know what? It's not tracking to the targets you had, or it is. So we have started to introduce something called Monitor, which tracks the metrics you care about, and we'll get you updates real time. So you come in the morning or you're on your app on ThoughtSpot and we’ll trigger for you. Hey, this metric starting to change. Let us show you why, right? It's not just that it changed. You got to go scramble and figure out what the hell happened. Let's tell you the top five things that influence that metric because we are sitting live on your data. And so we're giving that to you real time. So we're very excited about what AI does to make it easy for anyone to get answers using natural language, and then also proactively surface things to you that we think you're going to care about.
[00:16:38] Mohit Daswani: So that's AI and lots to talk about there, obviously, if you'd like. As far as M&A and Mode, we've actually done four acquisitions over the last four years. And the first three were talent acquisitions to bring really specific talent that we wanted to develop. Two of them were in India. So our chief development officer formerly ran a multi-thousand-person team at Cisco and had really seen the advantage of scaling teams multi geography and especially across the U.S. and in India. And so as we were doing that here, we've done a couple of acquisitions to put us in new cities and just bring great dedicated talent that had experience in the BI space or in the cloud data space. And so we did that to go from beyond Bangalore into two other cities, Hyderabad and Trivandrum. The Mode acquisition was the first one we did was actually bringing in a company in our space with a significant revenue base, significant customer base. And when you sketch out a deal on paper, this really did have all the kind of factors you look for, complementary to the point of why we were surprised.
[00:17:35] Mohit Daswani: We have over a thousand combined customers now - only have five that overlap. Incredible. And why is that? They focus on tech, they focus on emerging names in the tech sector. So your Doordashes of the worlds and your Instacarts have become large customers there and they, like I mentioned to you, our sort of vision, which is to make it easy for anyone to ask questions. Well, within the enterprise, you still have your BI team that needs to go and get technical and get in the data and then add - our view is, look, once everybody can take care of their own questions, you as a BI team can really focus on value-added analytics. And that's what Mode serves—that more technical analyst who wants to get into the data, right? And deepen the data, wants to create their own dashboards and analytics, knows how to work SQL queries and etcetera. So it gives us a product that serves that segment. So it's very complimentary and from an industry perspective, very complimentary as well. So that really was a great fit.
[00:18:29] Mohit Daswani: Great brand, loved among the startup and tech community and happened to be a timing in which they said, look, makes sense for us to be part of a broader platform. And we were able to, from a mechanics point of view, use stock and all that and, and, and create a transaction that made sense for both of us. So it's truly we're just a few weeks in since closing the acquisition, just had our first all-company kickoff with them as well with us. A lot of energy in the room. We're excited. It's interesting. I mean, my view on M&A is you don't often think about it at companies that are stage sort of venture-backed to add revenue, to add growth, because often the deal dynamics are tough, right? Someone's valuation is tough or what have you. I think if you can do it well and be picky and find the right opportunities, I think it can be extremely accretive. So time will tell for us obviously, but we're excited about this one. So that's a bit of the strategy and how we came about to acquire Mode.
[00:19:20] Andrew Seski: Yeah, it's really exciting. Thanks for all that. I kind of want to go back to just how quickly things are developing and maybe what you're excited about in the next year versus three to five. I was thinking before this episode, in the ‘70s and ‘80s, you had mainframe BI-type solutions with low accessibility and high expertise required. By the ‘90s and then early 2000s, we had web based where it was high accessibility. Still relatively low expertise required in this kind of era. And it sounds like what you're describing is ThoughtSpot is going to lead in basically self-service where the accessibility is extremely high and the expertise required is extremely low. And I'm curious as to what that looks like and continues to iterate on because it sounds like you're suggesting maybe it becomes more predictive and you're freeing up more research for BI teams to be more strategic. So curious as to what's exciting in your mind.
[00:20:14] Mohit Daswani: Yeah, yeah, no, you've taken us back a ways there, so kudos on the quick, the quick recap of our waves of innovation we've been through. Absolutely. So both from—we'll talk about the use case for the BI team and others and how this, what this, I think all these technologies mean for them, but then also the waves we've been through. So that, yes, the dominant wave we've been seeing as far as the infrastructure layer. It already happened at the app, layer apps moving to the cloud in the SaaS model. And clearly when you look at the growth of Google BigQuery and AWS and, and, and Databricks or Snowflake, the data is moving to the cloud as well. And moving from a captive infrastructure in your own data centers, where you've got to worry about security and latency and uptime.
[00:20:55] Mohit Daswani: I mean, I was at PayPal, when we started this journey, and as you can imagine the transaction volumes PayPal is generating and the security needs, protecting people's wallets and all, it was a, it was a strong philosophical bent towards we're doing this internally and in the last 7 years, they've now moved that over to the cloud. So that's happening across the enterprise for the benefits that it provides, from flexibility to cost just the advantage of scale, and not having to manage all of that infrastructure yourself. What it also does, though, in a cloud data warehouse, it creates a data infrastructure that is a lot more accessible.
[00:21:31] Mohit Daswani: You don't have silos and data siloed off into separate warehouses, et cetera. And so that is a big reason to do it. There are costs. There are technical reasons, but from ultimate, like what does it mean for our business? It's opening up the value of your data a lot more than perhaps you've been able to do so far. And so that for us has been I think a probably a key catalyst in why customers then end up choosing ThoughtSpot. But because I've moved my data, I've gone from an Oracle and other sort of environment and I moved to the cloud. And now that I've done that. I've got my data sitting in this cloud warehouse. I want to make it accessible to more people. Well, okay, the data is there now. You need a means to access it. You need that last mile or that BI layer. So we sit on top of that modern data stack and you would have data sitting in the names I talked about, GBQs, AWS, Redshift, Snowflake, Databricks, et cetera. Azure.
[00:22:22] Mohit Daswani: And then you often have some kind of semantic layer. We have our own. You have others like DBT that are doing tagging of that data so that the business terms are identified and then you're ready for analytics. And that's where we sit. So when you're getting hands-on keyboard and I'm in the business and I'm now want to get access to that data, that's who we are serving. That's our customer. And so I do think this creates, to your point, absolutely like mass accessibility and lower cost, a lower friction of access. Now, there's a lot of things that come with that- governance and the ability to protect data. Not everyone have access to everything. Those are key things. Those are key parts of how we've built the product so folks are protected. Who has access to what? I can't just go and change source data, etcetera. So there's a lot of governance and other provisions that come with enabling access to data. But once you have it, it's very powerful.
[00:23:08] Mohit Daswani: And so customers and are in their digital transformation wave looking us as a key part of that. And so your CBS is of the world, et cetera. Supply chain group wants to go and get access to data on how certain products are doing. Where is their backlog? They can just do that themselves. And that's just one of countless example, so I do think I do think it is changing the ability for people, just like in our consumer lives to use Google and get access to anything. The cloud enables that in the enterprise. What it means for the BI analyst, 2nd part of your question. Yeah, I do think our view has always been we're not looking to replace the BI analyst.
[00:23:41] Mohit Daswani: We're not looking to take—we are looking to take work off their plate, which is the backlog of requests that they have, which is, hey, you cut the data this way. Can you go add this follow on for me? Can you go add another question? Hey, I wanted to go dig in deeper. This whole backlog, let's take it off your plate, let people do that themselves now, right? ThoughtSpot, it's live on your data. They can go as deep as they want. They can get the drill-downs that they want to do. And let's free you up to actually add value and think about how you can provide analytics that supports the business. And then their job absolutely will be like, I think there's a few key—I think everything gets impacted by AI. I think certainly the job of a data analyst, I think a lot of jobs of people in finance, right, will be impacted by making it easier to get the routine stuff going, and then allowing you to have tools now to figure out how to add more value. And I do think that you see this debate, will humans be replaced? It's a set.
[00:24:31] Mohit Daswani: I do think the combination of super talented people who understand the domain they're in: it could be pharma, it could be business, it could be what have you, with AI at their fingertips provides a very powerful combination, right? What if I can go provide you with this visibility before you know to ask? And so I think harnessing the power of AI, people do have to adapt to that, but the underlying, going back to, we started the underlying understanding of a business and what moves the needle and like what would be important to understand, I think requires the human element. So I think data analyst jobs will change. I think AI will enable them to replace the easy tasks, but that hopefully allows them then to be engaged on stuff that's more interesting and moves the needle for their customers.
[00:25:11] Andrew Seski: Excellent. I'm curious about some of the integration strategy. You said it's congratulations, obviously, first on the acquisition. But integration strategy is a whole different ballgame. You said you've consistently made acquisitions throughout your tenure already. So curious as to what's been successful and maybe what other CFOs can learn from in terms of post-closing and cultural and sort of more practical integration strategies.
[00:25:37] Mohit Daswani: Yeah, it was interesting. This was a big shift from going from private equity, where you invest and you're a financial investor and the pure interest is financial and that's why companies raise money versus a strategic acquiring a company. So I helped build out the PayPal Corp dev group when I was there. We did a lot of acquisitions. And it was interesting to watch why they work and they don't. First, up front is being very clear on what you're looking to get done through the acquisition. What need it serves, why you're bringing it in, because then you need to your point integration plan that reflects that. Are we looking to bring on the CEO of a company because we want to go build a product capability or not? Or it's like, Hey, look, sorry, this is a team we're going to plug into an existing initiative we have already underway. That's the expectation. And you set that upfront. And so some of the management team transitions from a company. For example, better to have that upfront than have a turf fight happened six months, 12 months down the road, which you're in deal mode, that happens.
[00:26:30] Mohit Daswani: Like people want to promise things. So I think being very clear on what it is that the acquisition will serve, and what I found the best is when there is a—there's two things. There's either a road map initiative that we want to get done. We're not delivering on, okay, let's bring on, we could go try to find 40 people and hire them and do that, but you know what? Why don't we bring on this talented team of folks who already know how to do this and accelerate our roadmap? Okay. There's a clear, like objective role they're going to play and go. Or like, hey, there is a strategic piece on our overall roadmap that we think we're not doing, and we can think about accelerating through M&A. So that's the case of Mode. Like we want to create tools that for that, even that technical analyst is going to make their life easier. We could go build that and take some time and take a couple of years to do it, or can start with a company that's already very deep and brings us a large base of customers and a brand and a great team. And so I think knowing why you're doing something is important and it may sound simple, but often you get deal heat or like something becomes available.
[00:27:27] Mohit Daswani: We should do this and you figure it out later, figure it out upfront. So that's one. Integration plans for us. The important thing is to start and treat it like you have to have a plan because if you just acquire a company, it's all right. All the heavy lifting is done. You're going to have issues on your hand. So we were, as we went, from LOI into our closed deal, started getting teams together and sort of saying product, G&A and then kind of go to market and set up those work streams. Day after we closed the entire leadership team from product on both sides was together in our office for a week and working through and already had an agenda and work plans around. Like, let's think about product integration. Let's think about pricing. Let's think about how we're going to serve customers once they're up and running with us? So just clarity to set up and avoid confusion. You don't have all the answers, but it's like, all right, these are the things to knock down. Go to market is one where—Look, if you have a lot of customer overlap, that can be challenging. Thankfully, we don't have that issue. We will maintain two brands at this point. We will maintain two products. Like, but we're going to start to look at ways in which you can easily migrate from being a Mode customer and all the stuff you've done in Mode to now if you want to make that self-serve at ThoughtSpot migrate that over and make that available to anyone.
[00:28:39] Mohit Daswani: So clearly, there is a path there towards a product synergy. But we're buying a product that's well-liked and so we can keep them doing what they're doing. I think the pain points come up with employee retention and customer retention, and that's where you can get into trouble. So we're very focused on both. We did bring the companies together. We did have some redundancies. So we did act quickly to say, look, here's who's got a seat on the bus. And I think it's never fun to do that and have a reduction. But in a way, at least it's done early. It's clarifying and we're going forward. And so we did that and in the first three weeks of closing, we were very intentional around that. So these people like, all right, I'm here. I'm part of this company and part of this combined. I don't have to be thinking in the back of my mind, whether I have a seat or not. And then we also identify the leadership roles that will come from the combined company and we've announced that to the company as well.
[00:29:27] Mohit Daswani: And so there's clarity on who's doing what, who's coming in from Mode, who's coming in from ThoughtSpot, who's doing what. So provide clarity to people so we can start going back to work and do your job. And then on the customer side very intentional like we're preserving mode has a great account management function, customer success function, where and continue to retain that. Kind of do no harm is the initial kind of principle retain customers have them know Mode— they bought the Mode product. Mode products being supported, we're going to invest, innovate, plus you get all the benefits of ThoughtSpot.
[00:29:56] Mohit Daswani: What people hate is like, you start to tinker with a product that they want and they're using. They chose it for a reason. And now it's like, it's not what I thought it was. And that has happened. There've been other acquisitions in our space that haven't gone well. So very conscious of that and continue to preserve what Mode does great. So I think these aren't rocket science things, but it is, you have to treat it as not just a deal, but like a good 12, 18 months of very active integration planning across people, across customers, across product and make sure that your leaders are bought in and are seeing that as a key part of their job now to go deliver it because it is a big change. And so it's been great to see the leadership team is going to step up and really clearly identify priorities and make tough decisions and start to move that forward.
[00:30:39] Andrew Seski: Yeah, absolutely. Alignment. It's simple, but not easy. And I think especially across times when the corporation and the structure is changing, whether you're raising a new round or making an acquisition, alignment is obviously key. And I'm curious as to how you think of your role in communicating not just with the board but with your CEO, with investors. I know we talked early about the level of transparency that you like to promote, even shareholder communications, probably employee owner communications, communicate the value of their holdings and the trajectory. And I think all of that continues to help with that alignment. And then I'd love to hear a little bit about where you view ThoughtSpot's position in the market, maybe against some of the other competitors. You're knocking on some really big doors successfully. So kind of curious as where you feel the market position is today.
[00:31:30] Mohit Daswani: Yeah, absolutely. I think the role in an acquisition before, during, and after for a CFO is critically important. The one I would say is, look, in any acquisition, there's going to be voices saying, let's do it. There's going to be voices saying, no, it's too complicated. It's too hairy. It's difficult, scary. And I think, as a CEO, it's probably one of the tougher challenges you'll take on—is deciding to bring another company in and integrate, bring new leaders into your company, take the risk of a cultural rejection, all that stuff. It's a big deal. And so what I've always found as CFO is like develop a point of view. Don't just be someone else with an opinion that's like, well, it could go this way, that way. Make the tough call to have a point of view and say, and in my view, it's this. There's always risks and there's always benefits. Here's the risks that we could have from a financial perspective. Like we might lose our customers.
[00:32:25] Mohit Daswani: Here's what that look like this and that here's the benefits and all the cross-sell opportunity and incredible synergy with having such a low overlap, bring their product to our broader segments, lay that out and provide a point of view. And say, look, and so in my case, it was like, absolutely. Yes, we should do this. Here's why. Here's the analytics on whether it's a creative to our business or not, here's what you need to believe. Because one thing you will not know is the perfect 2-year view on what an acquisition is going to look like. Here's kind of what you need to believe for this to be a creative. Can we believe this? Right? Can this can we grow their customer base this much? Can we cross-sell this much? Right? Can we bring them into these verticals they're not in today? Some basic assumptions. Can a rep at ThoughtSpot sell this much of Mode within 6 months and 12 months? And you break it down and you show the data.
[00:33:10] Mohit Daswani: You're like, yeah, this feels pretty doable, right? And I think we can do much better, but if we at least do this, it's a good acquisition to provide that grounded data, provide a point of view, and then say, hey, here are the risks and we got to be all over it and manage this, right? We don't want to lose their customers. We don't want to lose key employees. What are we going to do about it? Create an action plan and then move forward. So that's what I find. I think you want to be clear in your thinking and if the answer is no, then also say why. We have looked at other deals will be passed, and say here's why. This thing is going to be when you play it out and look at their trends hugely detrimental to our growth rate doesn't make any sense and so have a point of view.
[00:33:42] Mohit Daswani: Ultimately, CEO has to make a call, board has to go find him and and influence [that] call but I do think that's a role that you play in that and you can influence the integration plan. And then from a communication perspective, I think providing clarity to focus on why we chose to do an acquisition, what it means for our combined business and then ultimately what this can look like and get people excited about the opportunity on a combined basis. That's the whole management team. That's not just on the CFO, product leads, and the whole team has to has to provide that vision. But I think the CFO can paint the picture. And in our case it takes us to 150 on a combined ARR when you look at what it does for our trajectory, the segments that it helps us put us in that we weren't in and then vice versa, the opportunities to grow their business. I think people get pretty excited about like, wow, similar to what I told you. Can you believe this? If you need to believe this, this is what this looks like. And people get fired up about that. Cause it's like, all right, my stock's going to be worth more. This is a creative and more so like, we are continuing to enhance our position, and we'll talk, which goes to your next question as the sort of emerging leader in modern BI.
[00:34:53] Mohit Daswani: There's no one else that's independent now that sits across the modern data stack. We're agnostic. We sit across all the major cloud data warehouses I mentioned to you. We are independent of any strategic, and we now have that ability to serve the everyday business worker as well as that highly technical analyst. So it really helps fill out the suite for us. So I think people get excited about that. That's like, yeah, if you came here to go build the next leader in BI, there was the last wave that consolidated, which was Looker and Tableau and Clic. And you're here to build the next wave because this is an industry that goes through waves, right?
[00:35:28] Mohit Daswani: You took us back a little bit—Cognos, Business Objects, and then Tableau, Clic, and now ThoughtSpot. We are at the front of that third wave, and we're very excited about that. And combining with Mode only continues to strengthen and enhance our position there.
[00:35:42] Andrew Seski: I'm curious as to how any of what you just explained shifts during different market cycles where down rounds are prevalent. It's really interesting to see with all of AI coming out and all of the venture community being pretty excited by it, it tells a very different narrative than it did in 2022 and 2021 and 2020, all really different years. And it felt like we lived through a couple market cycles really quickly because we basically did. And I'm just curious as to how you shift and strategize around different market dynamics whether it’s public or private markets?
[00:36:16] Mohit Daswani: Yeah, private to public is definitely a shift. As far as where we are, and I'll talk about that. As far as sort of cycles, my view is, and it comes from being an investor, like the fundamentals of what it means to build a good business, they don't change over time, right? People thought in the early days of .com, you could sell at low gross margins, doesn't matter, you make it up in volume.
[00:36:35] Mohit Daswani: I mean, you look at the unlock in Amazon. It was Amazon, they were a very low margin business. Obviously, they continued to dominate e-commerce, but Amazon Prime helped in having that fixed revenue stream and then, and then AWS and cloud and providing a lot of bottom line profitable growth as well. So ultimately, like, that matters. I saw it at Square when we went from negative EBITDA to positive EBITDA. It unlocked the stock when we went from negative EPS to positive EPS. Once you're at a certain size and you're a few hundred million in revenue, there's no reason you shouldn't be burning money.
[00:37:04] Mohit Daswani: If you have a good reason and you show it, okay, but as a business, you have to be able to generate profit. So I don't think that changes, right? What is a good SaaS company? What are the gross margins? What are the go-to market economics? Ultimately, it's how much do you decide to put into if product innovation is showing, each product is really growing our time. Yeah, invest. If you're showing that by adding reps and regions, you can do that effectively and have a payback period that's accretive, do it. But no, the metrics you're measured against because what good is—and I think that got lost a little bit in growth at all costs. And some of these customer segments for folks, maybe aren't that lucrative, they're churning or that is a high cost to acquire customers. That doesn't make sense. So I just think whatever the waves come and go, what builds a fundamental, like a strong business, doesn't change. And so that's my been always been my vision and very aligned with the management team here, which is we're building for the long term. This is a space that's given rise to multiple billion-dollar, even 2 billion businesses, where you look at Tableau is today. We're playing a long game.
[00:38:03] Mohit Daswani: And so the next wave of evolution will be as a public company. And for that, to your question, yeah, we know what that looks. We know what public investors look for. And that's the thing about SaaS businesses. Like, you'll have different growth rates. You'll have different market dynamics for sure. The financial metrics boil down to a handful. And so we watch those and like I mentioned, we understand each of our segments and we understand how they perform in terms of CAC and in terms of retention, in terms of growth. And we are reasoned in where we're making investments. Yes, we run experiments. You have to, right? You don't do back to being in the valley. You got to run experiments and the capital is there to help you do that. We do make bets. And some of the capital is around just emerging bets, but then in our core business and with the getting more mature, we have metrics that we track. I think - and look, that takes alignment with the management team with a CEO who has that same outlook, which is important. We are building towards being a top-tier performing public company, because honestly, that's also where value is created, right? Yes, there was a wave, like you said, in ‘21, ‘20, where the IPO became the exit event, right? If you could go public at 40 times, 50 times forward revenue, you're probably taking money off the table.
[00:39:15] Mohit Daswani: And you're like, hey, this is pretty good. And for a while, people thought this is the new norm in SaaS. Everybody convinces themselves of that, but then ultimately it starts to come back to what the averages have been. And so I think you have to recognize that for what it was. It was a euphoria about some of the trends. It was their interest rates. And you know what? Came on the tail end of a bull market that had gone for more than a decade.
[00:39:36] Andrew Seski: And liquidity for LPs at the end of the day, too, for all of those funds.
[00:39:40] Mohit Daswani: All those funds that you serve as your customer. So what does that mean? We raised money. We raised money in 2021. We raise money when we can. The market was good. We were performing and we brought on to their credit, March Capital, an extremely long-term thinking investor. They came in at the time where the market multiples were different from what they are now, but at the same time, they've seen us perform. They've seen us continue to grow and execute behind what they said. And they said, look, that's all we can ask for from you. And ultimately where the markets are is going to be where they are when we get public. We did our company kickoff and the - usually try to talk about a few metrics this year.
[00:40:14] Mohit Daswani: I just talked about one, which is durable growth. And I gave the example of, of ServiceNow, right? Which went public, kind of reopened. They and Facebook reopened the IPO market after the housing crisis, summer 2012. And I forget where they are, but they're up 50 or 60 times. I didn't know. 30, they're up about 30 times from their IPO price, somewhere from 18 to like five, 60 years. But why? They just kept growing and they found new segments. They found new use cases. They grew to 7,500 customers. So what I tell people is worry about that, worry about being in a market that's large enough, being at a company that has the growth levers across segments and regions and products to have growth for the decade to come. If we're doing that and we do, we've made the investments to have that, stock's going to do fine. Stock's going to do fine. And the market multiples will come and go and you'll pick your time as to when you want to sell. But ultimately those underlying, just, I think fundamentals, of what it means to build a good business, I don't think those change.
[00:41:07] Andrew Seski: Yeah, that's really exciting, too, because most companies, I think, really struggle with their second act. So for you to be discussing this internally as not just the motivator, but informing what that second act is going to look like, continue to develop and grow as a public company is very exciting. I think it's a really healthy framework for everyone to start wrapping their minds around continued growth. And it's great that you've got the capital that is appropriate for that vision as well. I think that says a lot about the leadership team. Would love to pull up and zoom out a little bit and maybe give us a personal definition of what modern CFO looks like in your opinion, and then would love to dive into my favorite question on the podcast and talk about something you feel is underestimated in the world today.
[00:41:48] Mohit Daswani: Yeah. Yeah. It's funny, the modern CFO definition, the role has evolved. I mean, again, I came into this career path a little bit more than a decade ago and, and sort of learned from a lot of different mentors. What I've seen though, and certainly the traits I admire. You mentioned some names, folks I've worked with before. Bob Swan, Sarah Friar, Patrick DePuy was the CFO of PayPal as well for a while. John Rainey was our CFO at PayPal during the spinout, now CFO at Walmart. I think the combination of: you have to be deep in the data. You have to be deep in the numbers. You have to understand what's going on, right?
[00:42:23] Mohit Daswani: John Rainey would tell me like the thing he loved about it is you have your finger on the pulse of the business and you really do. Like when you look at it that way, it's like there's a drumbeat to a business. There's a cadence. What's happening? You have the ability sitting in the seat to understand that and in a unique position to understand it. So I think you have to know if they have the technical, I think, know-how as well as frankly, just the mindset to be very deep in the detail to know what's going on and so strip away noise from signal, understand what to look for, not what to ignore because it's not important.
[00:42:55] Mohit Daswani: So I think that comes with that starting with understanding back to where we started, the DNA of a business, financial model of a business, the operating cadence of a business. So I think that, you start with that as a, as a CFO. And I think being able to translate that to how can we do better on those and help influence with go to market with product, with your other teams on, hey, where we need to get better? And I think that is that vocabulary, if you start to have that as a company, and people are thinking about, geez, if I could just move this from X to Y, if I could move my ASP in my commercial segment from 40K to 70K, or if I can within 12 months, add a second product to each of my customers. If in Europe, I can go and build a pipeline of this much, I can demonstrate the demand.
[00:43:40] Mohit Daswani: It creates vocabulary that's very powerful for a company because you kind of have the milestones to go get. And look, there's always experimentation. There's unknowns for sure. You can't metric everything, but I do think being able to influence how a company thinks about its operating cadence, where to invest, and how people are going themselves is the second piece of being a modern CFO because people kind of get it. And they have financial targets, they have operating targets that come out of having knowledge. So I think that's the second piece. And then I think the final is being able to tell the story in a way that inspires folks. It's grounded in the data, but it's also aspirational. And I think that's one part where you sometimes have to flip your hat a little bit as a CFO which is, hey, yeah, I need to present things I can support.
[00:44:22] Mohit Daswani: I need to present a forecast I can support. I need to be the source of truth. But at the same time, I need to show like, look, here's how we get to the next milestone, 500 million or a billion. You know, here's how we get there. Here's how to think about that. And yeah, this is not a bottoms-up plan on that's been stretched out to the last detail, but it's like, yeah, can you get your head around this? Can you get your head around Europe can be $150 million business? Can you get your head around this embedded business that we have can be a $200 million business? When you break it down for folks. It's like, wow, that is actually achievable. It's awesome cause those are good milestones and it's invigorating.
[00:44:54] Mohit Daswani: So I actually think the modern CFO plays a role in telling a story that gets people excited. And people don't often think of that in the CFO seats, like just tell the numbers, you don't have to sit back and be boring. Help sell the vision, but do it in a way that's grounded to things people can understand. Talk about like what you need to believe. And I think that can be very inspiring. So those would be the pieces to me, I think about being a modern CFO. There's obviously a lot of obvious stuff using tools, using AI, using products like ours or others. I think that's part of it. But those are the three that I think about as far as outcomes that you can help drive.
[00:45:29] Andrew Seski: I've got to say that's probably one of my favorite personal definitions of a modern CFO I've heard on the podcast so far, so thanks for that. And just segueing into something from your perspective that you feel is underestimated in the world today. It could be quite literally anything, doesn't have to be ThoughtSpot-related or you know, daily work environment related.
[00:45:48] Mohit Daswani: So, yeah. I will say this, in a world in which we went through COVID and everybody is now working at home or thinking about whether to get back in an office and now we're talking about AI and machines and what they're going to do. I think the piece that's underestimated is we are still human beings and that matters a lot and I think even in a way that people may have forgotten. And I've been watching these concerts this summer and Bruce Springsteen and Beyonce, and then obviously Taylor Swift, a big one, and you watch why people are getting - I think there's a connection that people feel like just being around other people who like, love the same music, connected to the artist. And it's like it's energizing.
[00:46:23] Mohit Daswani: And I think people have missed that during COVID. And that's just an example of where I think human connection, it matters. And so I really do. I think it's motivating. I think it's fulfilling. I think it's what we seek as individuals and you've certainly get it and your family and your friends, but I think it's important at work. I think if you asked a lot of our team, like we just came out of Boston last week, we had our company kickoff. I think most people will tell you the number one thing they enjoyed is being around their colleagues because we hire good people. We don't hire big ego and jerks. We were pretty careful about our culture, and that's fun. And being able to sit back and have a drink with folks after the day is done or even just get out and like be working on something together and roll up your sleeves and get into it. I think that's motivating. So I think human connection is important.
[00:47:08] Mohit Daswani: I have this thing on my - let me see it behind me - this little placard, which is this red placard here. It's from, it was World War II. And I was in London with my family last summer. And we toured the Churchill museum, which is where he commanded World War II from the British forces. And they obviously had their wartime propaganda and all that. And one of them was “Your courage, your cheerfulness, your resolution will bring us victory”. You wouldn't expect to see cheerfulness on a war cry, but I think at the end of the day, it's like, hey, we're human beings. You got to keep it light. You got to keep it enjoyable. And you got to enjoy each other's company. And at the end, that's what's going to carry you sometimes even through the darkest of days. That's what I think is underappreciated is a need for human connection. And just the fact that it is, we are social beings at the end of the day.
[00:47:55] Andrew Seski: Excellent. I can't think of a higher note to end on than that. So I just wanted to thank you so much for your time, Mohit. I know we'll be in touch. Looking forward, and I hope to have you back on the podcast again.
[00:48:05] Mohit Daswani: Yeah, I love it. Thanks for doing this. It's a huge asset for the CFO community and for others. I've loved listening and watching some of your prior episodes. So thanks for having me on. I appreciate it. Thanks again.