Q: What is the best advice you would give to a new startup CFO?
13 15 1 0 0 A: Michael Wolfe, CEO of ccLoop
This answer originally appeared on Quora.
All startup jobs are challenging, but CFO can be especially tough. The
lessons that CFOs learn during their careers, especially if they have
experience at a more established company, are often at odds with what
it takes to make a startup successful. And those differences are not
just a necessary evil to be tolerated: embracing them is the very
essence of what makes a startup win over larger companies and over
less nimble startup competitors. A few tidbits:
Have a bias toward the “best” plan and not the most “ predictable”
plan. Predictable startups go out of business daily.
Therefore, replan at least quarterly if not more. Not just because you
have to anyway, but because you’ve made agility a core discipline to
crush competition.
The most interesting things happening in this company probably don’t
show up anywhere in the numbers. Play detective and figure them out.
Learn the new set of metrics. Engagement. K factor. CAC. CLV. NPS.
They often speak to the health of the business more than revenue,
expenses, and margin do.
Maintain a strong bias towards change, not status quo. Ask every day
if the plan is still right and if it could be improved.
Your job is to advise and coach the CEO and work effectively with the
whole team. Not to be the advocate for the finance department.
Publicly support the CEO, even when you have disagreements behind closed doors.
HR has little to do with benefits and payroll: it is about getting the
best team on the field and getting them trained and motivated and in
the loop. It is purely art, not science. For every decision you make,
ask if it will attract good people to your company.
Facilities that don’t reflect the company’s values or help attract
good people can kill a company. Do not be penny-wise. I’ve never been
at a successful startup that had grey 6-foot high, 8′x6′ cubicles. And
I’d never work at one.
When you update the team or board, see how far you can get before
using any numbers. And never give a number without interpretation and
color commentary. 10% data, 90% interpretation.
Use the word “policy“ sparingly. Don’t say, “here is our expense
report policy.” Say “here is how we do expenses.” The word “policy”
always knocks down everyone’s motivation by several points.
For every minute you spend helping keep bad things from happening at
your company, you should spend ten trying to make good things happen.
If you go out of business, it will be because you didn’t hire the best
people, make the right product, or sell it effectively. It won’t be
because someone hacked into your conference call because you didn’t
rotate the 10-digit code.
Your job is not to be the one trying to spend less money. You help
think of ways to spend it the most effectively. If you see your job as
pushing for less spending vs. the rest of the team spending more, then
resolve that misalignment. Don’t accept it as the “CFO’s role.”
Internal disagreement on company strategy often manifest themselves in
budget conflicts. A CFO resolving those conflicts is often doing the
CEOs job. Bring the CEO in right away to resolve those.
Never waste employee’s time in the interest of saving a little money.
Go ahead and pay $100 a month for that new saas expense reporting
system if it keeps the team from spending an hour a week each printing
and stapling receipts. The opportunity cost for an hour of employee
time is several hundred dollars. It also tells the employee they are
valued.
There is an inverse relationship between time spent preparing for and
“rehearsing” for board meetings and the health of a company.
If you run IT, use cloud-based solutions. Let people choose their
equipment within reason. Make them manage it. Do not seek uniformity
for the sake of uniformity.
Assume all information should be shared with the team…if you think
you’ve found an exception, make sure you have. If you ever say, “I’m
not sure the employees can handle….” you are going a road that may not
end well.
Assume it is going to be a wild ride! Enjoy it!
13 15 1 0 0 A: Michael Wolfe, CEO of ccLoop
This answer originally appeared on Quora.
All startup jobs are challenging, but CFO can be especially tough. The
lessons that CFOs learn during their careers, especially if they have
experience at a more established company, are often at odds with what
it takes to make a startup successful. And those differences are not
just a necessary evil to be tolerated: embracing them is the very
essence of what makes a startup win over larger companies and over
less nimble startup competitors. A few tidbits:
Have a bias toward the “best” plan and not the most “ predictable”
plan. Predictable startups go out of business daily.
Therefore, replan at least quarterly if not more. Not just because you
have to anyway, but because you’ve made agility a core discipline to
crush competition.
The most interesting things happening in this company probably don’t
show up anywhere in the numbers. Play detective and figure them out.
Learn the new set of metrics. Engagement. K factor. CAC. CLV. NPS.
They often speak to the health of the business more than revenue,
expenses, and margin do.
Maintain a strong bias towards change, not status quo. Ask every day
if the plan is still right and if it could be improved.
Your job is to advise and coach the CEO and work effectively with the
whole team. Not to be the advocate for the finance department.
Publicly support the CEO, even when you have disagreements behind closed doors.
HR has little to do with benefits and payroll: it is about getting the
best team on the field and getting them trained and motivated and in
the loop. It is purely art, not science. For every decision you make,
ask if it will attract good people to your company.
Facilities that don’t reflect the company’s values or help attract
good people can kill a company. Do not be penny-wise. I’ve never been
at a successful startup that had grey 6-foot high, 8′x6′ cubicles. And
I’d never work at one.
When you update the team or board, see how far you can get before
using any numbers. And never give a number without interpretation and
color commentary. 10% data, 90% interpretation.
Use the word “policy“ sparingly. Don’t say, “here is our expense
report policy.” Say “here is how we do expenses.” The word “policy”
always knocks down everyone’s motivation by several points.
For every minute you spend helping keep bad things from happening at
your company, you should spend ten trying to make good things happen.
If you go out of business, it will be because you didn’t hire the best
people, make the right product, or sell it effectively. It won’t be
because someone hacked into your conference call because you didn’t
rotate the 10-digit code.
Your job is not to be the one trying to spend less money. You help
think of ways to spend it the most effectively. If you see your job as
pushing for less spending vs. the rest of the team spending more, then
resolve that misalignment. Don’t accept it as the “CFO’s role.”
Internal disagreement on company strategy often manifest themselves in
budget conflicts. A CFO resolving those conflicts is often doing the
CEOs job. Bring the CEO in right away to resolve those.
Never waste employee’s time in the interest of saving a little money.
Go ahead and pay $100 a month for that new saas expense reporting
system if it keeps the team from spending an hour a week each printing
and stapling receipts. The opportunity cost for an hour of employee
time is several hundred dollars. It also tells the employee they are
valued.
There is an inverse relationship between time spent preparing for and
“rehearsing” for board meetings and the health of a company.
If you run IT, use cloud-based solutions. Let people choose their
equipment within reason. Make them manage it. Do not seek uniformity
for the sake of uniformity.
Assume all information should be shared with the team…if you think
you’ve found an exception, make sure you have. If you ever say, “I’m
not sure the employees can handle….” you are going a road that may not
end well.
Assume it is going to be a wild ride! Enjoy it!
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