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We're taking a look back at the best advice our guests had to share in Season 1 for scaling your finance team. Listen to hear practical advice from finance leaders on hiring, prioritization, and systems and tools to grow your team.
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.
Cristina: Hi, welcome to FinOps today. I’m Cristina Carnazzo from the Ramp team filling in this week for Alex Song who’s taking some well deserved time off.
On this week’s episode we are wrapping up season one and featuring some of our guests’ best advice for scaling your finance team. We know finance leaders are all being asked to take on more responsibilities, and the only way they’re going to meet that challenge is by equipping their teams with the right strategies and tools.
Let’s revisit the practical takeaways that our guests shared on hiring, tooling, and prioritization that will help you take your team to the next level. In this episode we’ll feature some of the most insightful moments from Alex’s conversations with the innovative folks at Stripe, 1Password, Capchase, and more.
First up is Patti Kangwankij, Head of Payments Finance and Strategy at Stripe, who explains how hiring for diversity and future leadership has helped Stripe become a SaaS rocketship.
Patti Kangwankij:
I think, at the core of it, and I've said this a bunch other people, is like at the end of the day, as much as you may be hiring experts in certain things, like we now have ahead of [inaudible 00:15:48], we have different specialties with people with a lot of experience. At the end of the day, we're still testing for people who can make any strategy and any business smarter because they're in the seat. And so even down to the expense person, if you're just taking in tying and just making sure the books kind of tie, that's not enough for us to hire, so I think you need both the expertise and the thing.
I've been here three and a half years, I think for the first year, it continued to be hiring a lot of athletes across, I think in the second and third year I've been here, we have added a lot of depth to the experiences that we have, people who have been and have done and have built out certain areas.
I've been here three and a half years, I think for the first year, it continued to be hiring a lot of athletes across, I think in the second and third year I've been here, we have added a lot of depth to the experiences that we have, people who have been and have done and have built out certain areas.
And then I think it's always about a diversity of different people, right? So my team right now, I have a gentleman who was an investor for the last 15 years and that he brings a very different experience. And then someone who has more mature kind of FP&A experience, and then someone who was at one of the networks and actually had a big stint in product. And so having a diversity of bench I think is really important.
The one other thing I would say is, I think hiring leaders early is important. I think I probably was a little late to that as well, but you're always looking for the person who's comfortable in three years with much more complexity, much more scale and all that. And for each one of your functions and areas, you kind of have to think about which ones are the most important and where should you be hiring ahead?
And obviously I love the person who knows how to build it from the ground up and the person who knows what it's like in three years, but it's actually, for me more important that person knows what it should be in a few years and has the right north star, to the extent you hire a lot of people who just do a lot of work and then you lose track of that kind of three year outlook, I think that could be painful and it may take a lot more resources and people with that. But I think, again, it's a balance all the time, I think, figuring out who has expertise and who can grow into it. And I think it's about diversity of team, I think over time.
Cristina: Artem Mashkov, CFO of SwagUp also has strong opinions on hiring. In this next clip he explains why your people should always come before your product.
Artem Mashkov:
I'm a firm believer that your product doesn't matter. Great, you guys have a great product. You know why you have a great product? Because you have a great engineering team, and you have a great product team. If the minute you guys take away that product team, and that engineering team, your product is going to fall behind. Same thing, you guys have great customer service, it's because of the team.
The only thing of value and this I learned for retail and hospitality, you can have the most incredible food in the world. But if your service is trash, you're not going to be a good business. Same thing in retail, you could be selling the best product. You could have the iPhone. If your service is trash, you don't have the right people, you're not going to make money.
For me, I think that if you're investing, wherever you're investing is going to call people first. Then what you want to do is you want to maximize your best people. That's why SaaS is there to augment not to replace. Yeah. We spend a lot of time on this. Like I said, we had a very lean back office team. It's taking us some time to line things up to get the 409(a) done and all of that, but we're doing leveling up all the time.
There's a lot of inflation, obviously, which is affecting people's salaries. There's a lot of jokes around that, "Hey, I didn't get her seven and a half raise then I lost money," and all of that. I think that's going to be top of mind. Look, everybody's been hit by the great resignation. The thing is, it's not always financially connected.
Alex Song:
Absolutely.
Artem Mashkov:
Yeah. For me, that's the only thing that matters in a company. It's a virtuous circle. I think Richard Branson talks about is that your employees take care of your customers, your customers take care of the company, and the company has to take care of their employees. It's not like customer's always right. No, no, no. Your employees are always right when you're the leadership and you're the company.
Cristina: Next up we have Scott Orn, COO of Kruze Consulting, who learned the hard way that you need to prioritize your own systems in order to be an effective resource for your customers. {8:35- 8:43}
Scott Orn:
“There's an old saying that the cobbler has the ugly shoes, meaning you always prioritize your clients ahead of your own systems. And so we were totally guilty of that probably our first five or six years. Vanessa and I used to do all the accounting and finance and tax compliance and all kind of stuff. And then we got big enough where for us, it became an amazing luxury to actually hire a CFO and controller internally. And by the way, having done that, things are so much smoother, so much better. It's really, really nice. And again, I get the same kind of reports that our clients get. I get those reports from our team internally.
So I actually feel very blessed to have that and not be having to get QuickBooks up to date at 11:00 PM at night or trying to file tax returns or 1099s a couple days before the deadline for Kruze because I prioritize us last. So that's really us. We've professionalized our internal finance team too, which I really encourage, effectively when a company comes and works with us as a client, that's what we're doing. We're professionalizing their entire finance and accounting function. And they get the benefit of all these process that we develop for all these other companies. But it is a luxury to do that on your own and I'm very grateful we're doing that now.”
Alex Song:
That's great. And I'm curious, you have your internal finance function you've built out over the years. Do they also do client work? You're just pulling in from the main workforce or you have something that's dedicated full time, live and breathe internal work?
Scott Orn:
Yeah. One of our acting CFO does do some FP&A stuff for clients just because frankly, it's not a big enough job yet to do it all the time. But that said like, I would say, I hope this doesn't come across as snotty or something like that, but we're professionals at this. So we're very efficient, right? If the rest of the internal team wasn't speaking the language of the control and the CFO, and also with Vanessa and I there with all this institutional knowledge, it would probably be a little bit different. So we're kind of lucky in that respect, but it is becoming a very big job. So I think probably in the near future, it'll be a full-time job.
Cristina: Jonah Remz, Head of Finance at Capchase, explains how he is growing his team in three key areas: FinOps and accounting, FP&A, and strategic finance. He also describes making the necessary move from Quickbooks to Netsuite after only a few months in order to give his team the appropriate foundation to scale.
Jonah Remz:
“So, only a few months in actually we decided to make the move from QuickBooks to NetSuite. We ran a process of looking at what are the accounting systems that we potentially want to use and naturally alongside that we want somebody that can be a true owner, not just of the system but all things accounting. So, right away within a first few months wanted to make that conscious decision to bring somebody online that can understand the business from that ground level. We start to put in place policies, procedures, reporting requirements, et cetera, that really allow us to not just operate efficiently as a 15 or 50 person organization grow to many multiples of that. So, very quickly brought on somebody to head up accounting, start to learn from across every aspect of the organization, how are we running today? Where do we need to improve? Et cetera and then to start to then build under there.
Jonah Remz:
So, we have that accounting function and Sally who heads up that has brought on some additional resources since that time and we're also really focused on making sure there's call it internationalization of it as well because we have a lot of offices in different areas. So, that FinOps and accounting is one area. The other that we very quickly identified of making sure that we upscale our abilities is in the FP&A space. So, we think it's really important to have somebody that can truly provide that feedback and analysis to the business, having a pulse on taking the data, getting it in front of the right people and what I always like to say, shining a spotlight on issues and opportunities, which I think is really integral at a growing stage of the business but we're making decisions in such a expedited manner that you really want to make sure that you can make data driven decisions and you're getting that to the right people at the right time.
Jonah Remz:
The third leg of how I think about scaling the team is on the strategic finance side. And the way that we've approached this is strategic finance is a little bit embedded in all of that. And so it has aspects of accounting and FinOps, it has aspects of FP&A, and then it ties it all together from the company perspective, what are some of the step functions if you will, that will change how the company looks? And how do we understand and communicate to the different areas of business to make sure that we're all aligned with the overall company goals that we're communicating to the external markets”
Jonah Remz:
And so we're also scaling the team up there in the coming months springing on a new hire. So, that's a bit about the background where it started as just me in the employee 15 or so, and adding on those specialty focus areas across the org. Now, in terms of what I do day to day, the short answer is every day is quite different and exciting in a startup like Capchase. I think the more opportunities grow, the more that daily amount changes but I do really like to split it between focusing on those three different areas that I identified of the FinOps, the strategic finance and the FP&A. And so an example of that is putting in place and reviewing the policies in FinOps whether that's the monthly close processes, whether that's expense and other employee policies related to onboarding ongoing management, et cetera.
Jonah Remz:
And then on the FP&A side, always looking to work with on the data side, how can we make sure that we're ingesting data in the right way, putting together reports that are useful for the team, having meetings with the respective departments to look at their trends, identify how can we rethink our forecasts, et cetera, and having that constant line of communication open which I think is key. So, always having meeting within the business and different business level owners there. And then on the strategic finance sometimes this might be ad hoc and sometimes it feels you can have longer stretches of focusing on one area such as for example, anytime we're in an equity raise process that can really dominate quite a bit of time in terms of making sure getting materials together, positioning the business appropriately, responding to investor questions, et cetera. And so spending quite a bit of time there too. So, it's no one day is the same and I definitely would not trade that for anything.
Alex Song:
That's a great overview. Just curious actually, maybe you can give us some context on how large is your team today and how does that compare to the overall size of the organization?
Jonah Remz:
Sure. So, today we're actually fairly lean. I know I split it up into a few different pillars, which might make us sound we're quite large, but it's myself, we have two on the accounting side with a third to come shortly and we have one on the FP&A team and then we have another coming on the strategic finance side. So, all in we have six folks including myself.
Jonah Remz:
Yeah, look, I definitely see that going up in terms of what we're targeting, the way that I think about it is I think the team certainly has to get bigger and I think it is in some ways the finance can be proactive and reactive. And I think in the part of terms of how big the team can get is a little bit more of the latter on the react. What I mean by that is given the complexity of the business, both from on the operation side and what our go to market of approach is, as well as the composition of the rest of our organization, I think that can also really dictate what you need from finance. So, as an example, we are in the business of financing and money movement and there's a lot of requirements around that will need to continue adding to our light and up scaling our team around being able to handle some of that.
Cristina: Aron Susman of Ro also discusses why focusing on employees and establishing an atmosphere of trust and vulnerability is integral to creating a successful team. {13:08 - 13:19}
Aron Susman: “I think there's also an ability for that leadership team to actually develop again that personal relationship where you can be vulnerable and say like, Hey, I feel a little lost on this topic.
I don't understand why we're doing this. Can you help me here? I'm managing my team and I'm worried about X, Y, Z, what's your thought process here? And I think what ultimately happens sometimes is people feel so afraid to not be perfect to everyone around them, that they're afraid to say like, Hey, I'm struggling with this thing, can you help me? But I think what happens there is then I get advice. You get that empathy that person's willing to be vulnerable with you. And then ultimately you can develop that relationship where you have psychological safety, because if you don't have that and you feel everything's a threat and you feel you have to be perfect and everyone's coming after each other, it doesn't matter how many meetings you have. It doesn't matter how many offsites you have. You'll never develop that level of trust.
I mean, I think part of it's just that it's okay to say that we failed. It's okay to say we messed up. It's okay to say we made a mistake. We try not to make the same mistake twice. But it's okay to make mistakes. And if you're vulnerable with folks and you share that with them, you will earn their trust. And I think ultimately that psychological safety and trust is what allows for great collaborative, cross communication. And wasn't great at that early in my career. That's something you really have to learn and experience. And I think it's something that we do really well at Ro and has helped us and a lot of our folks, our leadership members have been with us for multiple years and have scaled inside their role. And I think that's relatively rare. And I think that's one of the reasons we've been able to do that.”
Alex:
Yeah, absolutely. That's great. That's super inspiring. Ramp is at a stage where we're roughly 280, maybe almost 300 people. And we're navigating through a lot of these challenges today, figuring out how to collaborate effectively, how to figure out common ground and work across different functions and whatnot. That's really inspiring. One of these days, hopefully we'll be 700 people and communicating and working well together, coming back to the question of operating leverage and scaling, what's been effective at making you better at your job, but more effective. Again, we can take this in whichever direction you want to talk about. Is it outsourcing? Is it using great vendors, hiring smart people? What are some of the things that you've found really helped you out over the last few years?
Aron Susman:
I think of a few things. I think some of it touches on what we just talked about, which is again, having the trust of your team and your CEO is just so important because I believe just if you think about it in sports or other areas, when you feel like you have to be perfect all the time, and you're unable to make a mistake, you are on edge and you are really unable to perform at your best. And so if you feel like there's no margin for error for you. In some areas, obviously there are, but in general, if you feel like there's no margin for error for you and you're unable to make a mistake, I think that's where people get themselves in trouble because either that's where mistakes get made because haste makes waste. And I think oftentimes what happens to folks is like they make a mistake in a model.
Aron Susman:
It was innocuous. It's hard to build a 50,000 tab model and not have any review and not make a mistake, but then revenue's off by a million bucks and so instead of just owning up to it saying, Hey, messed this up, how do you want to deal with it? It's like, well, we could end up re forecasting something different here. And then you just end up in this long web of areas where you're ultimately trying to chase your tail, and it's really hard to scale when that's the case and so that's why I think, when CEOs ask me what they should look for in CFOs or CFOs or finance folks ask me what they're looking for in the company. I just think it's, you got to find someone that you can trust.
Aron Susman:
And I think ultimately you can become, my goal is that our management team can worry about all the things I need to worry about, but they'll know that from a financial perspective that I have this, I have my hand on the wheel when things come up, because they will, I will alert everyone, I'll make it clear as to what's going on and why, and we'll address it, they don't have to be thinking that in three weeks, they'll find out that revenue did X, Y, Z.
Cristina: Tom Egan, CFO of DivvyHomes, discussed how hiring for complementary skill sets, rather than a mirror image of one’s skills, is the best way to grow a high-velocity team.
Tom Egan:
“I went from a career in banking and giant institutions down to a series A company, I was, I think employee number 15 when I joined. I was the only person in finance broadly, including accounting capital markets or FP&A as well as the only lawyer and so I very quickly took over. My initial mandate was really to focus on the capital markets aspect. I also took over the legal duties, which at the time was really focused primarily on the capital markets as well.
So it was executing new deals, signing NDAs with new investors and things like that. My first hire was about six months after I joined, it was a guy who had a lot of FP&A experience and wanted to learn about the capital markets. So it was a really good fit for us, for me in particular, because it was complimentary skillset that he had that I was able to bolster. I think my initial instinct was to find someone that looked a lot like me and had my experience.
But what I realized in the recruiting process was that over time we needed to build out a pretty broad functionality within the fun finance org. And capital markets while it was an important aspect of the business and a complex one, that was very much my skillset. And so I felt like it was important to have a complimentary skillset come in. So the first hire, I refer to him as a Swiss army, so he's covered really all aspects of our finance team from start to finish.
He came in initially to help me out on the capital market side, but very quickly was able to expand his role and start taking on a lot of the FP&A. And so he was instrumental in helping us model out the business and do a lot of the financial diligence around our series B. And he helped me also build out that function internally. So today he runs strategic finance for us, which encapsulate it's FP&A as well as investor relations and strategic planning.”
Cristina: And finally, we have Jeannie De Guzman, CFO of 1Password, who explains that she helped grow her team by looking for hires who could dive into the nitty gritty details on day one and lead with resilience.
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.
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.
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.
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.
CC: We hope you enjoyed this compilation episode of FinOps Today. We’re taking a break for a few weeks but we’ll be back with more thoughtful and provocative conversations with finance leaders in season two. In the meantime, don’t forget to rate, review, and subscribe to the show on whatever platform you use. And if there’s something you want us to explore more in season two, or if you have feedback to share don’t hesitate to give us a shout at podcast at ramp dot com, that's podcast at ramp dot com.