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In this episode, Alex speaks with Jeannie De Guzman, CFO of 1Password, about bootstrapping as young companies, important qualities to look for in your first hires, why it's important to be proactive about your finance operations, and when it makes sense to outsource some of your work.
Welcome to Recession-Proof - a podcast by Ramp. Join us for in-depth, thought-provoking conversations with finance leaders, executives, and investors on the current state of the market and what this means for your business through 2022 and beyond. Hosted by Alex Song, VP of Finance & Capital Markets and Kimia Hamidi, Head of Savings at Ramp.
Speaker 1:
You are listening to FinOps Today, a podcast from Ramp, where the world's most innovative finance leaders share what's on their agenda. Here's your host, Ramp's own Head of Finance and Capital Markets, Alex Song.
Alex Song:
Hi there. Welcome to FinOps Today. On this week's episode, we're speaking with Jeannie De Guzman, CFO of 1Password. Thanks for joining us.
Jeannie De Guzman:
Thanks for having me. I'm super excited to be here.
Alex Song:
That's great. How are you today?
Jeannie De Guzman:
I'm doing really well. Most people have heard that we had just a giant series C fundraise that we announced a couple weeks ago. So it's just been go, go, go and a lot of excitement. And so, last week we actually were able to have our virtual kickoff. And so, this week, things are finally calming down a little bit where we can actually get some work done. I'm feeling really great, really energized, and it's just a great way to start the year.
Alex Song:
That's awesome. Congratulations on the fundraise. This sounds super exciting.
Jeannie De Guzman:
Thank you.
Alex Song:
We're going through some similar motions here at Ramp. We have a pretty intense and fairly complicated balance sheet. So we're constantly managing equity versus debt capital, how we structure that. And so, that is part of my job, and so part of the fun. So going through some of the same motions I'm sure that you're very familiar with.
Jeannie De Guzman:
Yeah. It's a lot of work on finance teams, for sure, when you're going through the diligence, and at the same time, you're trying to scale an organization. It's an extra thing you have to worry about at a very busy time. But it's so exciting and so rewarding. And just the love that you feel after the announcement, it's honestly priceless, that feeling. And so, I know the teams right now are feeling super jazzed about all the work they've put in. We feel the pain, but I think the reward after it is so, so worth it.
Alex Song:
That's stellar. I'd actually love to talk about fundraising a little bit later on in this podcast. I think that's going to be an area that's going to be pretty interesting to our listeners. But maybe just to back up a little bit, would you mind just telling us a little bit more about 1Password, what your company does, products, customers, et cetera?
Jeannie De Guzman:
Yeah, absolutely. 1Password, we're actually headquartered here in Canada. I'm based out of Toronto myself. We've been around for about 15, 16 years now. Our roots are a consumer product. We started off as a password manager, and that's what a lot of consumers know us as. But we've evolved now into becoming a security company that serves both consumers and businesses. And so, about six years ago, we had actually noticed that a bunch of our customers were bringing our product to work. And then we thought, "Hey, this could be on business product."
Jeannie De Guzman:
And so, we made that change in that evolution. And so, since then, our vision has really grown. One of the things we introduced to everybody over the whole series C and the investment that we had was this whole idea about human-centric security. So while we were a pure password manager at the very inception of our company, we've really evolved to being the company that really cares about security and about... Our whole mantra is human-centric security.
Jeannie De Guzman:
And so, the way I could explain it in maybe more simple or layman terms is we really think that everyone's lives should be in 1Password. And this is something that we didn't necessarily just coin ourselves, but as we talked to our customers, through all of customer meetings and just random people, honestly, if I'm wearing a 1Password shirt showing up at a hotel saying, "Hey, my whole life is in 1Password," we're actually hearing that, and that really resonated with us.
Jeannie De Guzman:
I think what our product does today, it really merges security with productivity. And so, there's so many breaches online right now, and everybody knows this. They're on an all-time high. They're only growing. And so, what do companies want to do? They want to protect their people and sometimes that can be quite clunky. And so, our whole thing is let's take that clunkiness away. Let's not let people have to make a sacrifice between one of those two things.
Jeannie De Guzman:
And so, that's what we're built on. And because of our consumer roots, we're able to do that because as a consumer, no one's telling you you have to use a product. You're choosing to use the product because it's beautiful and it's easy and you love it. And so, that's what's helping us get to all the businesses and say, "Hey, we're going to remove that friction." And so, that's the idea of the human-centric security. That's our vision for the future. That's the really TLDR version of what we do.
Alex Song:
Are you able to share with us how much of your business is consumer versus enterprise these days?
Jeannie De Guzman:
I think just give you a very high level. We don't share a lot of specifics, but you can read about this in the media. I'm going to tell you that today, after five, six years of being in B2B, it's greater than 50% of our annual recurring revenue now.
Alex Song:
Any interesting nuggets or rules of thumb when dealing with selling to businesses versus consumers? Any differences in the products, considerations, et cetera?
Jeannie De Guzman:
Well, I can give you the story of how we've actually had to change and why we even took round to begin with, because we were bootstrapped for the first 15 years of our existence. And so Jeff Shiner, our CEO, he... We didn't need the money, so we never really looked to bring on funding. But then, as we introduced B2B, we didn't have a sales team. There was no marketing team. There was no finance team. It was content people, and developers, and founders. There were none of these other teams there.
Jeannie De Guzman:
And so, he thought, "Wait a second, if we're doing this well without these teams, imagine what we need to do." And so, the whole business model changed once we took the series A, because he had Excel come in and basically give advice, like, "Here's how you build sales, and here's how you build marketing." It sounds pretty silly, but to sell to B2B, having a sales team is pretty awesome, and having marketing teams are pretty awesome.
Jeannie De Guzman:
We didn't have those one and a half years ago. Our CMO just joined us eight months ago, in fact. And so, I would say, the whole business and the whole company has completely changed the way it looks because we're trying to capitalize on B2B. I would say that one of the things that was really endearing about 1Password is they had a very close-knit community. We've changed our website a little bit and updated a little bit to be a little bit more polished. There's different messaging you have to consider for both sides.
Jeannie De Guzman:
And so, the marketing teams have to be clever. How are we not going to lose what got us here, but also cater to the different buyer profiles that we have to sell to now? And so, we definitely are organizing ourselves a lot differently than we did in the past. It's unified voice, but different teams are to the B2B and B2C.
Alex Song:
Yeah. That makes a lot of sense. If you only knew how much time we spent agonizing over stuff like this as well. It's interesting. I mean, building a business, making sure you're in front of the customers, making sure you have a compelling sales pitch, value proposition, et cetera, that really with me. Just to back up a little bit, Jeannie, I'd love to hear a little bit about your personal background, how you got into finance, how you got into your current CFO position.
Jeannie De Guzman:
Okay. I'm going to tell you from when I was back at school. It's the first time that I'm probably saying this in a very public setting. So if my parents ever get ahold of this, they're probably going to be livid. I didn't think I was going to be an accountant or in finance at all. I didn't know what I wanted to do in university. I majored in math and then took a couple minors in East Asian studies and geography. I was all over the place. So at the end, I said, "I don't know what I'm going to do here."
Jeannie De Guzman:
Luckily, I got into a program. I did my MBA. Through there, I'd met a couple people and they said, "Hey, you've got most of the classes for accounting, why don't you just take the exams? It's not that hard, and you can just become an accountant." I'm like, "Okay, sure." So I ended up doing my MBA, just randomly, luckily meeting these people. They convinced me to go the CA in Canada, the chartered accountant route at the time, equivalent to the CPA.
Jeannie De Guzman:
And so, because I was working at a company that dealt with all the big four, I had connections there, because, I'll tell you, my GPA was not going to get me to these places. I was lucky to have the big four accessible to me. I just ended up at KPMG and that's how it happened. I had no clue before that this was going to ever happen in my life. I ended up doing my whole audit thing at KPMG. Luckily, for me, I attribute a lot of this to just perfect timing. I happened to join KPMG here in Toronto in a time where they were just about to build the Korean practice.
Jeannie De Guzman:
And because I'm fluent in Korean, and the CFOs were all expats, they really needed somebody who could speak. And so, I ended up helping build that practice here in Toronto, which was really a special opportunity, I think. I think most people going through that program are like, "Oh, it's really a grind." But I got a lot of special treatment because of that. So it was a great four years. How did I get into tech from that, was I told a partner. I said, "Listen, I don't want to be a partner here. I don't want to."
Jeannie De Guzman:
He said, "Hey, I know a guy who's hiring." And so I ended up at OpenText, so Canada's biggest software company. I started off there in corporate accounting. I moved to corporate finance and treasury and did a year and a half in each of those functions and thought it was really great. Huge company, learned all of things I needed to learn there. But, for me, I was really a hands-on... I felt like I was a builder. And so, I ended up at BlueCat here in Toronto as well, and through somebody I had met at OpenText.
Jeannie De Guzman:
And so, that was the first time I got to build a real finance team from ground up. It was the best experience, to be able to do that. That's where I thought like, "This is my niche. This is where I'm really good at being able to build at a company that needed to scale. And so, from there, I actually ended up meeting Excel through a mutual friend, and then they were like, "Hey, 1Password is a great opportunity." I met the founders. I met the CEO, fell in love, and the rest is history.
Alex Song:
When you joined 1Password, was there already a finance team or did you also have to build it from the ground up? What was the infrastructure like these days, or maybe lack thereof?
Jeannie De Guzman:
Yeah. There was a team. There was a founder, Sarah, and there was one other individual. They were the team. And not only were they finance, they were HR and basically everything. All back office functions, those two individuals did. So there was a very small team, but there was a lot of building we had to do for sure. I mean, the company was already about 180 people then, so it wasn't a 25-person company. So there was a lot of building for sure.
Jeannie De Guzman:
I would say that two years ago, just over two years ago, when I came in, that was when the real building really happened. I could give you some examples of... I think a lot of this might resonate. This is perfectly normal for companies this stage. I mean, we didn't have an ERP system. We were working on QuickBooks. QuickBooks was on somebody's laptop. It wasn't a cloud QuickBooks where I could go and access it. We were dealing in a global environment. We didn't have global banking.
Jeannie De Guzman:
So we were dealing with FX and things like that. Payroll was very hard. It was a one-person show and keeping track of HR records and things like that just needed to happen. So we had to bring in a lot of systems in the first year. We had to do a lot of structural things like looking at our legal entities and making sure they were set up properly. So a lot of basics happened in those first two years.
Alex Song:
How was the building the finance team? How was different the first time you did it and versus the second time you did it?
Jeannie De Guzman:
Yeah. The first time I did it, I had more people to start with. So there was at least five people that I inherited the first time. It's a little different because the first time I did it, I would say the type of product, the type of company I was working at was large enterprise. So big, chunky deals. It is different when you have the volume that we have here at 1Password, because we have consumer and B2B.
Jeannie De Guzman:
And so, there's just a difference. It could be the same revenues. It could be the same amount of expenses, but your volumes are just different. And so, here coming to this company and only having two people, and growing at the rate we were growing, it was clear to me that we needed to build that team really, really fast. And so, because there was such a wide array of things we needed to do, so even things like benefits...
Jeannie De Guzman:
I joke with the founders today. Today it's funny. I go and look at my employment contract and it's like, "You will get benefits once you put them into place." And so, things like that had to be done. Whereas the other company, benefits existed, so I just had to make it better. This was a real scale up. And so, when I was building the team at 1Password, for me, I looked for people that I knew could consume a lot of different things, because there was just an array of things that we needed to do.
Jeannie De Guzman:
I needed to bring the people in and, and we didn't have a budget. We had to create a budget and say like, "How much can we spend on folks to get to point B that we're trying to get to?" And so, we were still pretty lean at the beginning, trying to operate really in a lean way because I had to figure out in what position we were in to invest. The types of people I brought on were the ones that I knew, that could just get through like...
Jeannie De Guzman:
I always use this example, like if we need to go dig holes, they can go dig holes. If we need to go set up benefits, we're going to go set up benefits, even though they're finance people. So really nimble and flexible people was who I was looking for. I built that team pretty quickly. I started talking to people before I even started here because I knew I needed them on ASAP.
Alex Song:
That's so interesting. This is a question that I ask every one of my guests. I'd love to know, of those first few folks that you hired, it sounds like you were optimizing for strong generalists, folks who had a lot of grit, worked hard. What specific functions do they serve, years of experience? If one of our listeners, for example, was building out his or her first finance team, what are the candidates that they should be looking for? Big four accounting, or maybe Wall Street? Any tips or guidelines around, let's say, maybe your first three or four hires? Who were they? What were they like?
Jeannie De Guzman:
Yeah. I would say, one way to put is, one of my very first hires was my right hand through the last two years. She came from the big four and I knew her from the big four. So I knew the kind of personality she was. Let's say, today, she's our senior director of finance ops. So she's somebody who I knew would be able to be super operational, but also really understand the backbone of financial audits because we needed that. And we need to understand the GL.
Jeannie De Guzman:
And so, for me, what you talked about around grit and resilience, that was number one for me, because you need somebody who's able to just consume a lot and just be okay. Not getting everything 100% perfect the first time around, and just be able to move on and do the next thing and content switch really quickly. That individual today is our finance ops person, because I know that's what she's good at.
Jeannie De Guzman:
I hired an array of people. I hired people that had some industry experience and I hired people that didn't come from the big four, but had accounting backgrounds and that had close experience, because you needed that. And so, I tried to pick those people that with... First of all, with the grit and resilience, but also the ability... They have a special background, but they can apply it to many other things. I think that a big four background is really great, especially if you know that the GL is a mess.
Jeannie De Guzman:
You need just somebody who can come in and quickly sort through things and make some decisions and have that professional judgment that you can rely and trust on. I do think somebody who's... They don't have to be CPA or anything like that, but if they've had transactional experience, and by transactional, I mean, AP or AR, being able to understand invoicing and billing. That I think is really important as well. And then FP&A, for sure, like bringing somebody in with an FP&A background has always been one of my top three hires.
Alex Song:
Very interesting. How about today? What does the team look like? How big is the team? What are the different functions? Actually, what would be helpful is, what's the headcount relative to the overall head count?
Jeannie De Guzman:
The team ended last year at about 30, out of about 550 head count. So a team of 30. This year, we'll end the year at about 60, with a headcount of about a thousand. So we are linearly doubling.
Alex Song:
So it comes out to around 3%. Is that a good target? Is that a good heuristic? How are you arriving at that number?
Jeannie De Guzman:
It really depends. I think of like the costs of percentage of revenue, I think we're right there where we should be, because you could have lots of heads, but if you don't have the right seniority in heads, it's not necessarily helping you. So, from a percentage of revenue perspective, I think we're going to be right in the right place. But I also wanted to caveat that this year, despite doubling, included in that head count are also a group of data analysts, for example, that are not necessarily always typical finance.
Jeannie De Guzman:
But right now, because we're cleaning up our data, they are sitting under finance because we care about the rigor of the numbers, and we thought that it made sense for this year. So it's not just pure finance that we're going to. We are getting some efficiencies there. The way we are currently organizing ourselves is we have the controllership group. And actually our VP controller just joined us less than a month ago. We have our FP&A group. VP of FP&A just joined late last year. And then I have finance ops.
Jeannie De Guzman:
And then, within those teams, I'm very lucky. Under ops, We also have a systems person dedicated to finance systems in NetSuite. Under FP&A, we're going to be having the data team. And then, we will also have a dedicated revenue team, for example, because we have rev rec issues and we're US GAAP. So we have to follow 606 and all of that. This year is definitely getting to a best-in-class org chart. But you can tell that even my two VPs, that maybe I should have hired earlier. They just joined us recently. This is two years in already.
Jeannie De Guzman:
Sometimes you don't have the luxury of having those head counts immediately. Like yesterday, I wanted the nimble and I wanted everyone to be able to do anything. Now what I want is, because we've gotten over that hump, is those people are super important still. They're going to be on very specific tasks and projects that they need to do.
Jeannie De Guzman:
But what I'm telling the team is like, "We don't have to be the Jack of all trades anymore. You don't have to be that person anymore. I know it's tiring, we're tired. We're now going to focus and make your scope more consumable for you. We're going to try to now achieve some work-life balance, because two years have been a grind. And because of that, you can let go of some of the things that maybe you're not supposed to do in your typical role, and we're going to bring those people to do it." So we are scoping a lot differently today than I was two years ago, for sure.
Alex Song:
There you go. That's fascinating. Here at Ramp, I think we're probably a little bit closer to the first half of that, than the latter half. But obviously, it's something that I'm looking forward to as I think about building out the team. What about relative head count? It sounds like you've got the controllership, the accounting function. You've got FP&A, which it sounds like also includes a data science team. And then you have financial operations. Across those three areas, what is maybe more headcount versus less and how does that feel to you?
Jeannie De Guzman:
Yeah. Our controllership team is big because under controllership is also tax. There's a lot of facets under controllership. You have tax, you have revenue, you have the payroll, and you have the GL team. So they're bigger. And then, our FP&A team is quite bigger because, again, we're B2B and B2C. So we're organizing ourselves to have the experts in each of those streams. You can't model them the same. And so, you need different people overseeing it.
Jeannie De Guzman:
And because we have the volume thing and we're growing so quickly, our models need to be... You can't have a one person owning all of it. So the FP&A team is growing quite a bit. The finance ops team is new. So relative to itself, it's quite big. But I would say they're the smaller team. We probably will have five people on that team though, which is still quite sizable, I think.
Alex Song:
What does that team do?
Jeannie De Guzman:
Yeah. It's a good question. What do they do today and what should they tomorrow? I'll give you some examples of what finance ops does. First of all, the easy one to point out is finance systems. It sits under there. And so, finance systems, anything from NetSuite, rolling out a new commissions tool, working on integrations between those things, that's for sure sits under there.
Jeannie De Guzman:
The other interesting things that a finance ops team does is, so you have a commission system. Great. But what about the commissions plan? Who's going to help develop a commissions plan that makes sense from a finance perspective and liaise with the go-to-market team to make sure that it can get implemented properly. And so, they're going to work towards a process to say, "Here's how the commissions process is going to work at 1Password."
Jeannie De Guzman:
And then, our finance ops person will tell controllership, "Okay, this is what's going to happen. You're going to do the recs, and coordinate and orchestrate a project like that. We're actually going to start looking at some internal controls. And if that becomes a massive project for us, then finance ops is going to be project managing that for us. If I have a big project across the finance org, I will have finance ops take a look at that.
Jeannie De Guzman:
They also administer and deal with anything to do with equity today. So they administer equity plan. And then, for sure, when we're doing any kind of fundraising or due diligence efforts, they're quarterbacking the project management around that.
Alex Song:
It's a very interesting group because it cuts across a lot of different functions. I think, traditionally, where you might think of, for example, the sales commissions and whatnot, you think that that may actually sit inside... Or maybe some companies may put that in FP&A, right?
Jeannie De Guzman:
Mm-hmm (affirmative).
Alex Song:
Goes into the budgeting exercise, the planning exercise, et cetera. So it's interesting that it's a part of a separate group.
Jeannie De Guzman:
Yeah. They work very closely together because we always have to budget for it. But to actually help come up with plan documents and how is that the approval flows going to happen? Who's going to make sure we're accruing for it properly and then it gets paid for up really? It's just being the quarterback for all of those things. And it's because we're building. Remember, we didn't have a sales team a year and a half ago, so this is first time commissions plans for us.
Jeannie De Guzman:
And so, it's that building stage. They won't always own it. They will eventually pass it off. So there's a lot of special projects, especially at the building stage. You really want someone who can be the person that can bring people together, because the FP&A is busy building FP&A stuff that never existed. And so, I think in a series A, series B stage, if you're able to have that role, it's a luxury to have.
Alex Song:
In terms of financial operations, actually, I'd like to know, broadly speaking, across the finance team and the finance function, what are some of the bottlenecks that you currently see? Areas of frustration, areas that you think you might do a better job of scaling or automating. I think, usually, what winds up happening is a lot of folks talk about all the successes and the milestones and whatnot. One of the things I like to ask my guests is, what are your top one or two most frustrating things about their day to day?
Jeannie De Guzman:
I feel more frustrated for my team. They must feel incredibly frustrated. But it's because, at the beginning, when you don't have enough people, you find ways to get things done. And like I said, not 100%. A lot of things end up, after a year or two of cleanup, like manual things are happening. You look around, you're like, "Oh my God, everything is so manual. We didn't think about automating stuff." We just needed NetSuite and it needed to be working. But did we optimize it?
Jeannie De Guzman:
And so, I think one of the things that frustrates people is just all of that manual work that somehow ends up piling, piling onto your plate, because we didn't start by trying to automate these things. This is true of almost any team that I've worked out, and it's today we're thinking about what are we going to automate so that people don't have to spend a weekend VLOOKUP-ing two giant spreadsheets for stuff. Like how are we going to automate credit card reconciliations?
Jeannie De Guzman:
The worst task at any company is trying to figure out credit card reconciliations for like 12 credit cards. I found out that somebody was doing eight hours of work on a weekend because they just needed time to manually match stuff. And so, I would say that the most frustrating thing that ends up piling on in finance during a cleanup or during early stages is that manual stuff. It starts off very innocently. It'll be, "Hey, we only have 10 people, so let's just do expense reports in Excel." "Cool. Makes sense."
Jeannie De Guzman:
You wake up one day and you're a hundred people doing Excel-based expense reports and it's longer fun. It's no longer two hours of your day. It's now three days. And you think like, "Why didn't I take care of this earlier?" And so, I think that's one of the things that we really need to focus on, as finance folks. Every time I go back and I think, "What could I have done better?" It's like, "I could have automated from the beginning a little better."
Alex Song:
Definitely. I mean, you're just accruing technical debt, right?
Jeannie De Guzman:
Yeah.
Alex Song:
So to speak, something that just accrues over time and there's just insidious creep, I suppose. I'm curious, whose job is it to audit that and to revisit that every month or every quarter or every year? Does that function fall on a single person or like a single stakeholder, or does that fall on you? Who can come in and really say, "Okay, I've identified seven things. We're going to automate this stuff. And our deadline is in two months." Who's empowered to do that?
Jeannie De Guzman:
Everybody. Every single person on the team, I think, has to own a manual process and put their hand up and say, "I know how to make this better." I myself own, enabling the teams to feel like there are resources and there are options available and when they speak up, there is actually something we can do about it. And so, that's something that with the teams, I haven't said explicitly until maybe last week, saying, "Hey, if you're doing something that you hate, raise your hand up," because we can do something about it. There's got to be a better way to do it.
Jeannie De Guzman:
And so, I do think it's on each person, especially because we're remote too. So I don't actually watch somebody's screen and see what they do all day. I had no clue somebody was working Saturdays at least once a month, to do this thing for eight hours. It was brought up to me and I said, "Well, why didn't they say anything?" And then, when you reflect, it's like, "Well, they must not have felt like they could have," or they must not have felt like there was hope or there was a solution to it.
Jeannie De Guzman:
And so, that's something we're working on internally, is to say like, "No, we want to automate. We want to make your lives easier. We don't want you to be doing that kind of work." I think one of the first indicators of us committing to that was to actually bring on a systems person full time and say, "This person knows how to automate everything, so give her the list because she will do it over time." And so, now we're building a roadmap for all of that.
Alex Song:
Yeah. That sounds great. We need someone like that, yeah, at Ramp.
Speaker 1:
You are listening to FinOps Today, a podcast from Ramp.
Alex Song:
This next section is usually... This is my favorite section. I want to call this the lightning round, but it's really not the lightning round because we're going to go very granular into some very, very specific details. A lot of this stuff is just stuff I'm just super, super interested in.
Alex Song:
Topic number one, okay? In house versus outsourced resources. When it comes to things like tax and bookkeeping and whatnot, what is the right time to move stuff in-house? Earlier today, you mentioned you have in-house tax now. When did you make that decision? What is right to keep internal versus external?
Jeannie De Guzman:
Yeah. I'll tell you that one of my earliest hires was a tax person, by the way. I am somebody who likes to bring tax in because I think they're largely ignored for a little bit too long. For me, it's a balance. There's always going to be mix of in-house and outsourcing. And it's really just going to be a value ROI kind of calculation. How long does it take somebody in house? How long does it take somebody externally? Is there other things this person could be doing internally that brings more value to the org?
Jeannie De Guzman:
We'll do that for every single time we want to outsource something. I am a big fan of outsourcing when it makes total sense, because if it doesn't have to be internally and I have 300 other things they could be doing, I'm going to prioritize those 300 other things that have to be done in house.
Alex Song:
Are there any functions that are easier to outsource?
Jeannie De Guzman:
I would say that, for example, when you have smaller... On the tax side, corporate, I usually like being in-house with them, with a review from externals. But let's say you have a small entity, and it's just annoying. I happily give somebody all of that accounting and say, "Just give me the entries to book on my side. I don't need to know the details. It's immaterial." I don't think it's worth having a person. So that very sign of immaterial pieces definitely are worth outsourcing because the effort is too big.
Jeannie De Guzman:
What's the hardest thing to outsource? I think is anything operational. Anything where you require cross business unit collaboration, it's much better to do it in-house because you have those relationships and you're building that trust between people. And you get to keep that legacy knowledge and you understand how it's built. I think that's the hardest piece to outsource to a consultant.
Alex Song:
Yeah. That's a great answer. It's something that we think about every day, just because we still don't have a massive finance team yet. And so, we rely on external resources quite a bit. Topic area number two, real estate. Okay. We're all working remote. A lot of us are very distributed. Some of us still have offices to go to, some of us don't. Who owns that, that 1Password? Is someone out there scoping out commercial real estate?
Alex Song:
Is your utilization 10%, 50 or 80% right now? How do you make sure that the office space is out there and it's being utilized? Or maybe it's not utilized. How are you thinking about real estate right now?
Jeannie De Guzman:
Yeah, it's interesting. We've been remote since inception. And when I joined, we actually had a tiny office in Toronto where you could come. It was never mandated. And we have another small office out in St. Thomas here where the support team likes to be together. We don't mandate it at all. We are a remote-first company.
Jeannie De Guzman:
However, we brought on a lot of people over the last year and a lot of those people have never worked remote before. It might have been a teensy bit easier because the whole world was working remotely. But now I think people are craving a lot of that social, that in-person time. Certainly, 1Password will never go back to a full-time in-office kind of company. We are certainly considering, should we have some spaces made available so that people in regions can get together for meetings here and there?
Jeannie De Guzman:
I would say that I was on a bunch of tours, here in Toronto, at least. And probably until maybe last month, I would have been the one sourcing those spaces. I've seen it done under finance, but we just hired a chief people officer who happened to head real estate at one of her biggest roles. So, hey, I think there's nobody better to own that. It can be in operations, it can be in finance. It can be a people officer. But for 1Password specifically, it's not a rush because that hasn't been part of our culture. But we do want to make sure the employees get what they need. So we are looking to investigate that a little bit more.
Alex Song:
Got it. Area number three, audits. Yeah, everyone's favorite topic. Any best practices, pitfalls, how you guys have been able to navigate some of this in the past?
Jeannie De Guzman:
Yeah. We've actually completed an audit. We're a private company in Canada, so you could get away with some more lenient standards. But we actually bit the bullet last year and said, "Hey, we're going to go US GAAP, full-blown audit and all of that." And we did it. Part of it was to challenge ourselves to say like, "Hey, let's get the books into shape and let's make sure somebody looks at it and says, "Yeah, you did a great job."
Jeannie De Guzman:
And so, it was something that the team and I discussed and thought, "Yeah, we might as well." We were converting from cash basis of accounting to accrual. And so, we're like, "Let's just do it all and get it over with, and let's get all of the misstatements, if there were any, open now so we can fix it." I'd rather fix it as a private company where nobody's really wanting audited statements, and then have somebody point out like, "Here's where you need to address things."
Jeannie De Guzman:
I mean, the team did a great job. We didn't really have to fix anything. But that was the intent. If you can and have the ability to do so, I would recommend it doing earlier than later. It's a great way to figure out where you need to improve and build those relationships with the auditors. And they're an awesome help when you're trying to figure out accounting throughout the year. I think they're a resource from that perspective.
Alex Song:
Last and final topic. I know we've been moving from topic to topic quite quickly. Last and final topic. I mentioned that we would talk about it, which is fundraising. You guys closed pretty large funding round. What was that like specifically speaking as the CFO or the finance team? How much work was there? Was there a lot of work on the front end, on the back end? What are some maybe pain points?
Alex Song:
I mean, again, this is an area where all we see are the headlines and people are happy. Everyone's congratulating each other. Let's talk about what was frustrating or what were some of the bottlenecks there?
Jeannie De Guzman:
Yeah. I would say that, with any due diligence, the painful part, it's not the selling, it's not the talking to investors and telling your story. That's all the fun stuff. But the painful part is the back office piece. Depending on who you get as legal counsel for the investors, they're going to ask some tough questions. They may go back and ask you questions about things that happened when you didn't exist at the company. And so, going and figuring out the answers to those questions or the documents that-
Alex Song:
By the way, sorry, who's asking those questions?
Jeannie De Guzman:
It would be basically the legal counsel for the investors.
Alex Song:
I see. Yep.
Jeannie De Guzman:
It's generally. And then, at the investors, they'll have their head person that's also asking questions from the business side. So you have the legal diligence and then you have the business diligence. But legal diligence, it gets into the weeds. It's like, "We need this very specific contract," or, "We need this very specific line in your equity plan," or what have you.
Jeannie De Guzman:
And so, that's the not fun part because it's like you're just digging. You don't feel like it's value add necessarily. You know it's going to result in a great result, but that's not the fun stuff. That's where it's late nights because you're doing it as your second job. You have a full-time job, you're doing this on top. And so, that's where the team really needs to get together and, and rah-rah together because it can get long for sure. I think it can be very disorganized. So keeping organized is one of the most difficult things during diligence.
Alex Song:
Do you have a dedicated investor relations function or not-
Jeannie De Guzman:
Not yet.
Alex Song:
... professional? Okay.
Jeannie De Guzman:
Not yet. But the individual in finance ops was my right hand there, because she had so much exposure to all of the other business units. She knew like, where would I go for this customer contract or where would I go for these terms and conditions? She had that knowledge. And so, it was really easy for her to play that role.
Alex Song:
Yeah, that's great. This is something that I don't know how many people think about ever, but what about treasury operations? Who's the guy who's picking up the phone and giving out wiring details or reconciling the cap table and cash in, cash out? Is that someone on one of the teams that you listed before?
Jeannie De Guzman:
For sure. The team that I listed before exists today. They didn't exist during due diligence just three months ago. So it's the person that's finance ops today was everything. Everyone reported in to her. So she is the main person. But we do have a treasury manager on our team. That was something that was important to me because that often gets lost in the mix. But as a software company, free cash flows and cash is something that is very important.
Jeannie De Guzman:
We had a big project where we brought in global banking systems. And so, we needed a dedicated person. So that person would be in charge of things like wires and confirming wire details and things like that, reconciling cash. And then finance ops would be the one coordinating our massive spreadsheet of like, "Where's all the cash coming and going?" And so, definitely a group effort there, but I would rely on my treasury person for treasury things, but my finance ops person to project manage it all.
Alex Song:
I just want to say, wow, I really appreciate. We covered four pretty hefty topics pretty quickly, all very, very informative. I find that a lot of the comments that you made definitely resonate with some of the stuff we've been experiencing here at Ramp in the past couple of months.
Alex Song:
Maybe switching gears a little bit and taking more of a 30,000 foot view, 2022, what's going on? What are you excited about? What's on the horizon, either personally, professionally, the company, the markets? Do you have a view there? What are some of the major things that maybe you're excited about accomplishing this year?
Jeannie De Guzman:
Yeah. 2022 for 1Password is going to be huge year. It's the year where I feel like we've done a lot of foundational building already. And this is where we optimize. From a finance perspective, we're going to optimize everything. We have the right people in place. We started the year off with all the right people that we need to perfect our craft here. And I think this is going to be the year for that.
Jeannie De Guzman:
For 1Password, I mean, it's just incredible. We started the year with a huge announcement. People are so excited about us. We've got this vision that's resonating with lots of people. Everyone is just wanting to meet and talk about it. And so, we're just really looking forward to doubling our head count, investing in the people, investing in the departments that need to optimize so that we can execute on this vision that everyone's so excited about.
Jeannie De Guzman:
I think that we're very fortunate. We announced, even in the current market conditions where a lot of people are getting a little nervous, but I think I'm super proud of being able to have a series C despite those conditions. And I think that speaks volumes for our business model. And so, this is just going to be one big year of getting a lot of stuff done. We're just gaining momentum now. We finally have a full C-suite. And so, personally, that makes me really happy.
Jeannie De Guzman:
We're not building marketing this year. Marketing's already here and technology's already here. And so, this is a big year for us. We're going to get a lot of stuff done.
Alex Song:
That's phenomenal. Out of curiosity, any hiring internationally? Are you in the US? Are you in other countries or is it still vast majority in Canada?
Jeannie De Guzman:
No, actually. In Canada and US are almost equal. And then we have about 40 to 50 folks in the UK. And then we have about 10 in the Netherlands right now. The Netherlands, we acquired a company earlier last year, actually. And so, those would be the four regions that we would actually hire out of. We're going to have 500 plus roles that are being posted. So anyone who's in one of those regions can apply Just tons of rules will be coming out.
Alex Song:
Jeannie, this was is great. Thanks so much for joining us. I know we covered a lot of topics. I personally found it to be extremely, extremely insightful. I know what I have to look forward to in the coming years. Hopefully, I'm able to follow in your footsteps. I would love one day to be leading a 30-person or 50-person finance team. So really appreciate all the comments and then all the insights from today.
Jeannie De Guzman:
Thank you so much for having me. It's been a lot of fun. I'm really excited because we're partners. Ramp and 1Password are partners, so it's even more exciting to be here.
Speaker 1:
Thanks for listening to this episode. If you enjoyed it, please rate and review us on Apple Podcasts, Spotify, or wherever you listen to your favorite shows. It really helps to spread the word. Until next time, this is FinOps Today from Ramp.