Strategy of Finance (Rohit Agarwal)

Introducing the Strategy of Finance Podcast hosted by Rohit Agarwal, Founder of Krayo.  We celebrate the Profession and the Professionals in the world of Finance. 

We'll be releasing a new episode each week and bring to you a dynamic finance leader to share their thoughts.  

Website: https://www.strategyoffinance.com/

LinkedIn: https://www.linkedin.com/showcase/strategy-of-finance-podcast

Twitter: https://twitter.com/podcast_SoF

Email: SoF@krayo.io

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Where to find Rohit:

LinkedIn: https://www.linkedin.com/in/rohitagarwal001/

Email: rohit@krayo.io

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Sponsor:

This show is brought to you by Krayo - the Unified Operating System for Corporate Spend.  Krayo is bringing together the whole journey of Corp Spend - Buy > Pay > Manage - into one single platform in an intelligence-first and automated design.  We promise to make you more profitable. 

https://www.krayo.io/

This episode of the SoF podcast features a discussion with Jay Sahal, CFO at Yellow.ai, an NLP platform that allows enterprises to build chat- and voice bots in over 100 languages to automate customer support and conversational commerce.  

Jay is a Chartered Accountant and Company Secretary by qualification and joined Yellow.ai in Dec 2020 after honing his craft for over 20 years in multiple large companies, including the IT giant Wipro.  He spent over 15 years at Wipro leading the Finance function for various business units, including $1 bn+ Healthcare & Life Sciences BU.

In this episode, Jay shares his views on the evolving role of the modern CFO, the impact of technology and automation, the relationship with the CEO and the rest of the management team, what keeps him motivated, and advice for emerging professionals. 

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Quotes:

"You are trying to change the tires of a fast-moving car, and you need that kind of agility, that kind of thinking process to do that. And you can't stop the car and change the tires... you should be able to manage dynamic environment in a better way, should be able to make quick decisions, and you should be able to do course correction very fast."

"Certainly right now, CFOs are business partners, CFOs are driving enterprise automation journey, CFOs are trying to manage risks for an enterprise end-to-end in a proactive way. I think going forward given that more and more automation is coming, what an enterprise can give value to a customer will be linked to how they are operating internally, and CFOs will play a bigger role in driving that journey." 

"Collaboration is a key skill I seek in people. Are you able to work with others? If two people are aligned, they are able to do five people's work. If they are not aligned, put together, they'll not do half people's work." 

"In your core areas, you should look for improvement every week, every month, every year... One step at a time, every day, you make a difference, and you can break a mountain with small steps. So small steps of efficiency, small steps towards better experience, better output, better way to work, I think you'll be able to transform the organization."

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Where to find Jay Sahal:

LinkedIn: https://www.linkedin.com/in/jay-sahal-1918067/

Twitter: https://twitter.com/JaySahal

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Where to find Rohit:

LinkedIn: https://www.linkedin.com/in/rohitagarwal001/

Twitter: https://twitter.com/podcast_SoF

Email: SoF@krayo.io

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Sponsor:

This show is brought to you by Krayo - the Unified Operating System for Corporate Spend.  Krayo is bringing together the whole journey of Corp Spend - Buy > Pay > Manage - into one single platform in an intelligence-first and automated design.  We promise to make you more profitable. https://www.krayo.io/ 

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This episode of the SoF podcast features a discussion with the very dynamic, energetic, and always-smiling KJ Tjon - a seasoned senior finance executive with more than 25 years of experience in the technology and telecommunications sectors. 

She currently serves as a Board of Director for Kaleyra, a Communications Platform as a Service provider; Nubia Brand International, a blank check company focused on the wireless telecom sector; and Volcon, a developer and manufacturer of electric off-road powersport vehicles. 

Previously, KJ served as CFO of Alorica, Epiq Systems, and Hawker Beechcraft, and President & COO of Scientific Games. She also spent almost a decade at Alvarez & Marsal, as a business transformation and performance improvement specialist.

In this episode, we unpack KJ's professional journey from Europe to Asia to the USA as well as from an Assistant to Corporate Finance executive to a senior Consultant to CFO and now a Board member.  Further, we deep dive into how to think about building diverse teams, understand the CEO <> CFO relationship dynamics, and get her advise on the first 100 days play for CFOs joining a new company. 

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Quotes:

"Focus on what you can control."

"The first thing you got to do is understand from the CEO, what do they think are really the true business drivers and what is really the key for the company in the next six months for it to get done because finance needs to support that. Your goals have to align with whatever direction the CEO is going."

"You really got to know what to do and trust your instruments and have the experience. So I really felt like, I can spend the time to get certified, but I'll never be good enough to really do this without somebody sitting next to me who really knows what he's doing. So yeah, a little bit of knowledge is very dangerous when it comes to piloting planes. There's a lot more that can go wrong..."

"I always loved ops. Especially if you're at a company that actually makes stuff like airplanes or things like that, it's just really cool to just like see how things get made. So I've always kind of attracted to being in the kitchen and seeing what's going on."

"I think the one thing that is lacking in my background is I don't have any depth in any real industry because I've moved around so much. And, I love to learn. So when I went, for instance, to Wichita for Hawker Beechcraft, it was super cool to learn about aircraft, how the planes are made, the walks with in the factory. I loved it."

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Where to find KJ Tjon:

LinkedIn: https://www.linkedin.com/in/kj-tjon/

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Where to find Rohit:

LinkedIn: https://www.linkedin.com/in/rohitagarwal001/

Twitter: https://twitter.com/podcast_SoF

Email: SoF@krayo.io

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Sponsor:

This show is brought to you by Krayo - the Unified Operating System for Corporate Spend.  Krayo is bringing together the whole journey of Corp Spend - Buy > Pay > Manage - into one single platform in an intelligence-first and automated design.  We promise to make you more profitable. 

https://www.krayo.io/ 

Our special guest for the show today is Venkatesh Tarakkad, the CFO of DealShare. 

With qualifications like Chartered Accountancy, ICWAI, and CISA, Venkatesh is a seasoned CFO with experience of over 25 years in building and scaling businesses, bringing efficiencies, managing funding rounds and acquisitions, as well as taking companies public.

Venkatesh has deep sector expertise in Retail, FMCG, and eCommerce areas, having led Finance functions at Ecom Express, TCNS Clothing, Metro Cash & Carry, and Lots Wholesale, as well as having prior associations with Ernst & Young and Coca-Cola.  He joined DealShare in March of 2022 to make it the Retailer of Choice for India's Mass Consumers.

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Quotes:

"The whole process has been about getting deep, putting in a lot of hard work.  I have seen quite a lot of brilliant colleagues, who are significantly more productive than me.  But for me, I realized I need to put in quite a lot of extra efforts... going out of the way to learn new things, so I think those are the things which help me on my journey to become a CFO."

"If I needed to move from a career growth perspective, I need to be in an organization which will allow me to do that, and the earlier I joined may be the better."

"Then, I revised the projection because you can keep stiff targets for your team, but you can't do your cash flow projections on hope.  Cash Flow projection has to be always realistic."

"Our job is to make sure that you have developed a system which gives the right information for business to take calls."

"It is the job of the CFO, even at an early stage, to communicate the importance of hygiene."

"I have certain priorities in life.  It is very clear for me... Health, then Family, then third is I have a significant interest in sports, trekking, and motorcycle, and then comes everything else."

"I need to have people who can build processes and work in uncertain situations... I am more interested in seeing whether the person has the mindset to make the change." 

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Where to find Venkatesh Tarakkad:

LinkedIn: https://www.linkedin.com/in/vtarakkad/

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Where to find DealShare:

LinkedIn: https://www.linkedin.com/company/dealshare-in/

Twitter: https://twitter.com/DealShareIndia

Website: https://www.dealshare.in/ 

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Where to find Rohit:

LinkedIn: https://www.linkedin.com/in/rohitagarwal001/

Twitter: https://twitter.com/podcast_SoF

Email: SoF@krayo.io

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Sponsor:

This show is brought to you by Krayo - the Unified Operating System for Corporate Spend.  Krayo is bringing together the whole journey of Corp Spend - Buy > Pay > Manage - into one single platform in an intelligence-first and automated design.  We promise to make you more profitable. Visit at https://www.krayo.io/

Our special guest for the show today is Amit Kumar, an accomplished finance expert who heads the Finance Centre of Excellence at Avataar Ventures. As a premier growth stage VC firm, Avataar specializes in nurturing SaaS and B2B startups that are building in India for the globe.

Amit isn't just another Chartered Accountant. He brings to the table a wealth of experience, spanning over two decades, that he garnered from various multinational corporations and vibrant startups, both within India and beyond. His professional journey has taken him to GE, Oracle, Schweppes, Bosch, and Attune Technologies – a HealthTech SaaS company backed by Avataar Ventures itself, where he was the CFO.

For those of you who didn't know, Amit is also an entrepreneur in his own right. He founded LOGIQORE, a venture that offered fractional CFO and CFO advisory services to early and growth-stage B2B and SaaS startups across India and the ASEAN region.

Amit's mastery isn't confined to just one area. He has a knack for setting up and streamlining financial operations, expertly managing cash flows, and creating growth strategies, backed by financial KPIs tailor-made for start-ups. From establishing new offices in multiple countries, to structuring company policies and procedures, to ensuring compliance, and even navigating the often tricky terrains of equity and debt financing, M&A, and JV setups in India - Amit has done it all!

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Quotes:

"I firmly believe that company should not be people dependent, rather it should be system driven."

"Learning never stops."

"At the end of the day, you should feel satisfied that you have done something good for the company. [If] That part is there on each day you come back home, I think that's the job you should do."

"If you give something free, it has no meaning for the customer because he anyways does not value the effort gone into that product. If there is a charge for it, there is a value for it."

"Over the last 20 years, I think most of the companies have understood that, finance means much more than accounting actually. Accounting is only a subset of the entire thing what finance department can do. And a CFO is a guy who basically runs the show for them as far as finance and operations are concerned. So he is not a guy who has to only look at the numbers or the performance of the company after the performance has happened. He is a guy who has to also tell you that you are getting into this risk. The way the business is functioning, I think we can achieve these kinds of numbers."

"CEO understands the CFO is not a finance accounting guy. He is the guy who is basically my eyes and ears and helps me to understand where am I going wrong or is there a chance for me to go wrong or where am I doing really great."

"Saying no is very easy, anyone can say that. But giving a solution against that problem is what I think the modern CFO does and should do."

"I do believe in the 3 eyes principle which I learnt in GE, that the person who does the transaction, passes the transaction, and approves the transaction, they all should be different. So system helps you to drive that."

"Being a CFO does not mean CFOs don't have emotions. They do have as well. But the thing is they have to look at the company as a whole, not look at individuals. So when I am given a choice, I go with the concept, can I save the company? And if I can save the company by cutting down some cost for the company, honestly, I will go ahead with it."

"Automation is needed honestly to me at every level. You decide what level of automation you need... don't go by the concept of what should be the framework for when to bring in automation. Should bring in automation as early as possible."

"A good CFO will always take that call as to, oka...

Our special guest for the show today is Ananth Avva - the Senior Vice President and General Manager of Cloud Platform at Altium, a global leader in PCB design software.

Ananth is a top-performing business and finance executive with over a decade of experience leading SaaS-focused product technology companies as Chief Financial Officer and Chief Operating Officer. His career is a testament to his leadership and strategic prowess. 

He has been instrumental in positioning companies as leaders in their respective spaces, such as Wrike in project management, Lastline in the cybersecurity space and Pipefy in the Low Code Application Platform sector.

Ananth is also a mentor and advisor to other startups, a published author, a frequently requested speaker at industry conferences, and a transformational leader who has been actively recruited by PE and VC investors to build revenue, open new international markets, optimize financial performance, build partnerships, and develop high-performance teams.

One of his personal projects is MartialMe, a unique platform that utilizes computer vision pose-detection AI to teach martial arts.

With a vast array of strengths, from executive leadership, strategic analysis, operations management, to product lifecycle, financial management, and technology transformation, Ananth brings a wealth of knowledge and experience to the table.

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Quotes:

“Learn the business. Like you should actually understand the business.”

“If you're going to go into a boardroom and the number of board members outnumber the management team, you kind of know you're in trouble.”

“(In) Finance, you have the luxury of planning… But the second you start going into go-to-market, it’s chaos.”

“If you have a lot of change combined with a lot of signal coming in from customers, your best defense mechanism, especially if you're in the software side is product.”

“The gold standard for a CFO is someone who can take company public.”

“The role of the CFO shifted drastically to be this growth agent. And so, if you are supposed to quote unquote, articulate the business model and really validate a business model that's going to get us the best shareholder value, the best way to do that is through growth.”

“I really enjoyed the storytelling because there was a lot of feedback that you would get on the metric, but you also got a lot of feedback on the business and the downside risk or the upside risk that you’d have to manage.”

“(Business roles) brings you much closer to the customer. And I think there's a people aspect, which is, just because of the nature of your role, you have to spend a lot more time with product, customer success, marketing, sales, and finance, right? So I think the whole notion of sort of company building or nation building, where you have a lot of stakeholders, a lot of different views, comes through very strongly in these roles versus the classic sort of divisional role.”

“Most people are good corporate citizens and if they know that (full context), then they will hustle to do it.”

“What are the strengths that the founder/ CEO had, and what do I need to do to compliment it?”

“I'm shocked at how little diligence CFOs do before they get into the company. You have every right to go very deep.”

“My wife tells me I don't save lives. So she just says, you're not that important. Your job is not that important. No one's going to die. Just go in, think about it, fix it, and move on.”   

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Where to find Ananth Avva:

LinkedIn: https://www.linkedin.com/in/ananthavva/

Twitter: https://twitter.com/AnanthAvva

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Where to find Altium:

LinkedIn: https://www.linkedin.com/company/...

I'm thrilled to introduce our guest for today's episode. With a rich experience of over two decades in the realm of operational excellence and value creation, Pete Boyes is currently an esteemed Operating Partner at Thoma Bravo, which is amongst the best investment firms globally focused on Software or SaaS companies. 

Today, Pete works hand-in-hand with multiple Thoma Bravo portfolio companies and guides their CFOs and finance departments on strategic as well as tactical matters. 

In my view, Pete is the perfect example of a successful private company CFO.  Being a serial CFO, he has scaled his experience along with his companies with each role.  His impressive track record includes influential stints at companies such as Zego, which was notably acquired by Global Payments, SOASTA, taken over by Akamai Technologies, and ID Analytics, which found its new home with Symantec through LifeLock.  Before these standout roles, Pete honed his skills as a technology Investment Banker, facilitating a multitude of M&A and Corporate Finance transactions across a vast spectrum of companies.

In his last role as a CFO, at Zego, a company backed by Vista Equity, Pete was a key catalyst in orchestrating both organic and acquisition-driven revenue growth, culminating in a successful exit to Global Payments. Demonstrating his adaptability and leadership, Pete seamlessly transitioned to the role of GM post-acquisition, spearheading Zego's integration into the Integrated Software division at Global Payments.

An alumnus of the University of Southern California, Pete did his BA in International Relations and then pursued an MBA. 

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Quotes:

"I think as we talk about CFOs today, half of the time, you could say the CFO was acting as a COO. And there's a lot of operational chops."

"When you do one-on-ones with your CEO, I would always ask that question, what can I take off your plate?"

"The controller of today is a CFO 15 years ago in some ways. They're doing two-thirds of the work that CFOs did 15 years ago. That allowed the CFO to become more modern, where not only are they doing your standard FP&A work and work on the accounting side, but they could have the renewals team underneath them. They've got legal underneath them. They may have HR underneath them, and they may even have certain operations underneath them. The role of the CFO has become much more broad and operationally focused."

“Whether or not HR rolls into that function or not, you tend to spend a lot of time in a positive way working on people issues. I don't mean it as a bad word in issues, but people opportunities, if it's coaching and learning.”

"Ultimately, I got much better at this when I started to inspire, to empower, to communicate, to coach, to guide team members, not just on your own team, but throughout the organization, listening to other folks vent about challenges they're having in their organization, trying to solve people problems."

"The more we created a lot of the infrastructure and built the systems in place that would enable this business to scale and grow and create value, the better opportunity you have for a buyer to pay more for it when it's their turn. That's what I learned."

"In some respects, recurring revenue, SaaS, subscription models, the cloud enabling that have all, really changed the modern CFO to be more operationally focused and definitely metrics focused to enable not just to meet public market expectations, meet their lender expectations and then ultimately valuation expectations."

"The best finance leaders and the best finance employees are well-rounded within the entire organization. They're not siloed and just sitting in their office banging away at models. That's a large part of their job in many ways, but you'll be better at looking at trends, seeing where things don't...

Our guest today is no stranger to the complexities and challenges of the startup world. He is a master of navigating transformative change, especially when it comes to scaling startups and optimizing the intricacies of business. He's an entrepreneur, a strategist, a financial expert, and even a go-to-market leader.

Mika Kasumov is the dynamic founder at Abacus & Pencil Consulting, where he's made it his mission to guide Series B & C startups through the intricate mazes of business transformation as a fractional Chief Performance Officer. He's been the cornerstone of various consulting engagements with emerging giants like Mux, Rallyware, Trusted Health, and Sparks Rowing.

His seasoned journey has also seen him as the Vice President of BizOps & Strategic Finance at the renowned MasterClass, the Chief of Staff to the CEO of Pantheon Platform, and the strategic force behind businesses like Upwork, Pandora, eBay, and Sears Holdings Corporation.

But Mika isn't all business. He values growth not just in the boardroom but in life. Whether it's refining financial strategies, mentoring fellow leaders, diving into the nuances of the French language, or exploring the world of fiction, he truly embodies the spirit of continuous learning and growth.
Ladies and gentlemen, a master of transformative change and a passionate learner at heart, please extend a warm welcome to Mika.

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Quotes:

“I really approach the finance function as a driver for growth as opposed to an accounting-oriented cost center.”

“Don't let hubris around your evaluation number get in the way of building a long-term company.”

“Early on in my career, remote work would have actually hindered me.”

“I think that finance can be a competitive advantage. The way successful companies differentiate themselves is when they use the function to be a bridge between departments, to be the connective tissue between what is the investor narrative, how are we pitching, and what are you actually delivering to your customer, how are you measuring the customer outcomes, right? And there's a ton of things in between, like you have all the different teams whose operating priorities need to stack up, need to align, for you to have both a good employee, a customer, and an investor outcome. And I just simply can't think of any other function that can deliver that outside of finance.

“It's about having this parallel track of, here are the things I'd like to do when I have the opportunity to, here are the things I can do today, and here's how I'm gonna create an opportunity for myself to act on the rest of it in 18 months or 12 months or whenever the opportunity arises.”

“The CFO's role is to respectfully challenge, but also support the vision. And there's a delicate balance to play there between saying no to everything, and uncovering and front running risks so that the rest of the company doesn't have to worry about.”

“Strategic finance is fundamentally business partnering. And you have to go meet the rest of the business where it's at. If you have a rev ops team, you partner with your rev ops team. If you don't, you go and build those capabilities within a strategic finance org. And in the best cases, strategic finance is setting the operating case…

…ultimately, the idea (strategic finance) is that you're filling the void between departments and you're doing that by being a good partner for each one of them.”

“As a founder, you need to be concurrently data-driven, like searching for your product-market fit, and have the ability to ignore 90% of the data points out there. And that creates cognitive dissonance, right? The idea is that it's really hard for us as humans to hold to contradictory beliefs in our heads. That's a huge emotional toll, that's a huge mental toll.”

“Technology helps...

I'm super excited to be speaking with Joy Mbanugo today.  She is a Chief Financial Officer and Qualified Financial Expert, known for her work in financial governance and structure across organizations ranging from $200 billion to pre-revenue startups.

Currently serving as the CFO at ServiceRocket, Joy's responsibilities encompass finance, accounting, revenue operations, treasury, and more. Her focus areas include enhancing profitability, cash management, scaling the business, and leading digital transformation.

Joy joined ServiceRocket from Google where she held several finance roles. At Google Cloud, she analyzed deals worth between $25MM and $1B related to Google Cloud Partnerships and Industry Solutions. She developed a process to provide monthly financial results to the Cloud Partnership and Industry Solutions leadership and monitored annual revenue growth of up to $1.5B. She also designed and implemented a cash management system for Alphabet Treasury, transforming intercompany transactions and funneling over $100B in assets. Additionally, she engineered the Tax and Intercompany workstreams for the most extensive U.S. ERP conversion from Oracle to SAP. Joy managed a team of more than 80 contractors and over 40 staff members and orchestrated investment and risk management strategies to influence business decisions.

Her previous experience also includes working at BlackRock, where she handled taxation of securities lending, and at Ernst and Young, where she worked in both audit and tax.

A leader, a mentor, and an innovator, Joy has also been a voice for empowerment, leading employee resource groups at Google and served as an Advisor on the Finance Committee for the Northern California Chapter of the American Civil Liberties Union. She has also written for various publications, including Forbes and Huffington Post.

In her spare time, Joy enjoys local markets, spending time with family and friends, and investing in crypto and private companies. With a rich educational background, including a Juris Doctorate and a Masters of Accountancy, Joy's insights are backed by a profound understanding of the financial landscape.

Join us as we explore the mind of Joy Mbanugo, her approach to finance, and delve into her strategies, philosophies, and the experiences that have contributed to her success so far.

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Quotes:

“I would just encourage women to speak up because it's really hard.”

“For the modern CFO, data is everything.”

“Thinking strategically about growth, no matter what size you are.”

“Don't be afraid to say what you want to do.”

“A CFO should look at themselves as a servant to the business. And so you are there to enable the business and you are there to be a great partner to the business.”

“I think [AI in finance] is gonna be revolutionary. I feel like it's been here for a while. I think we're just now seeing it.”

“I am a very organized person in the sense that once I put my mind to something, I kind of tried it out. But I took a lot of data points.”

“If people talk about investing in things, investing in yourself always has the highest return.”

“That was a pivotal point for me because seeing women who had been, not are, but were very successful CFOs on corporate boards, I was like, okay, I think I can do this.”

“Get to know the people. And that, you know, that's very cliche, but I think when you get a big title, your ego can take over.”

“Well, you leave Google if you want to get a higher title, right? So Google's great. But one thing Google is really good at doing is hiring people who are really good at one thing and keeping you in that one thing. And so if you want to expand, you can move around, which I did. But if you want to expand and move up, it's kind of hard because you're competing...

Today, we have a very special guest joining us on the podcast. Based in Mumbai, India, he's a titan in the world of investment banking, especially in the digital and technology sectors in India. With over two decades of experience under his belt, he's been at the forefront of some of the most significant transactions in the industry.

Ladies and gentlemen, please welcome, a friend and mentor, Pankaj Naik, the Co-Head of Digital and Technology Investment Banking at Avendus Capital - the premier Financial Services firm in India which I'm also a proud alumni of. This group, co-led by Pankaj, has worked with some of the most marquee names in the Indian startup ecosystem, including Ofbusiness, Zepto, Dream11, Dailyhunt, Swiggy, Lenskart, Mintifi, Licious, Open, Eruditus, Nykaa, Zenoti and many many more.  

Pankaj's illustrious career has also seen him work with some of the most prestigious names in the banking world, including an 11-year stint with J.P. Morgan, where he led transactions worth over USD 10 billion and DSP Merrill Lynch.

Pankaj is an alumnus of the esteemed IIM Calcutta, holding an MBA with a major in Finance, and he's also an engineering graduate from the Government College of Engineering, Pune. A regular speaker at top-tier industry events focused on the technology ecosystem in India, Pankaj brings a wealth of knowledge and insights to the table.

So, let's dive deep into the world of digital and technology investment banking with the one and only, Pankaj Naik."

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Quotes:

"I don't think everybody has patience for day zero all the time."

"People are incredibly focused on where the dollar earned is going. I am not saying that means that people want everything to be profitable. No, that is not the case. People are ready to give a lot of leeway to unprofitable companies if they are growing in the direction that they need to grow and for which they need to spend money. That means money being spent on sales, marketing."

"(Investors) are increasingly asking the question of if throwing people at the problem is the only solution?"

"It's (been) a lot of hard work and serendipity, which I truly believe that in business like ours external environment determines a lot in terms of outcomes. But your sincerity, hard work, and innovation at least get you the ticket to the lottery."

"They were building and ability to grow in a new franchise, which is committed to India would be far higher compared to the place where I was in."

"There are some people who do phenomenally well in large organizations and carve out their niches and build their careers. And then there are people who get restless even if things are going well. I haven't seen that people will actually move very soon if they see the growth. And I think the reason for me also to kind of make these calls where I just saw probably the probability of higher growth to be higher in the next opportunity."

"I'm not the kind of guy who has a risk appetite of a startup… I've dealt with and interacted with so many entrepreneurs. All I can say is I have such an immense respect for entrepreneurs, not just for what they build, but for what they just go through."

"I will do what I do good, which I believe that working closely with founders to make sure that when we go and talk to investors, they realize their potential with respect to how good the company and the founders are and at least it is my job to actually help the founder to make sure that investors appreciate how good it is, right?"

"The CFO talent in India versus CFO talent in the US is slightly different. The CFO talent in the US is largely a big picture, strategic, outward-going, investor-focused talent vs. India is largely managing the house, cost, risk, and then investor discussion."

"(In India), at least 50% o...

I am elated to introduce our distinguished guest, Mr. Karan Bhople, whose financial ingenuity and visionary leadership have earned him a revered spot among the Top 25 CFOs in Software for 2023 published by the well known Finance & Investing. Currently, as the Chief Financial Officer of strongDM, Karan is at the forefront of propelling the firm’s momentum and laying a robust foundation for an expanding enterprise business. His financial stewardship is not only instrumental in modernizing infrastructure access but also embodies a holistic approach to organizational excellence.

Before his remarkable journey with strongDM, Karan showcased his financial prowess as the Vice President of Finance at SentinelOne. His strategic acumen was crucial in scaling the company from a modest $15 million of annual recurring revenue to an astounding $300 million and beyond. His key role in orchestrating the company's successful IPO speaks volumes of his adeptness in navigating the complex financial landscapes of the cybersecurity domain.

Prior to these roles, Karan honed his skills at notable firms like FinancialForce (now Certinia) and Salesforce, where his financial modeling and strategic planning were instrumental in driving fiscal growth. His early career as a Financial Analyst at The Walt Disney Company laid a solid groundwork for his illustrious career trajectory.

A proud alum of Stanford University with a bachelor's degree in Chemical Engineering, Karan’s professional narrative is a blend of continuous learning, relentless pursuit of excellence, and adept financial leadership. 

As we delve into today’s discussion, we are poised to glean invaluable insights from Karan’s rich experiences and learn about the financial scaffolding that empowers tech firms to transcend conventional boundaries in this digital epoch. Please join me in extending a hearty welcome to Karan Bhople.

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Quotes:

“The CFO's job is to optimize the valuation of the company.”

“If you combine a good product in a hot market… with good operators, you may have something.”

“The criticality of the software that we were selling made the revenue streams more reliable.”

“The easiest way to get promoted is by getting your boss promoted or by helping your boss look really good.”

“There is no teacher like the market.”

“What determines the elasticity of demand in a market? And one of the factors is, is the market for a luxury or a necessity? And the more necessary it is, the more robust the revenue stream will be if you figured out the product.”

“But it is largely a relationship management job. And it's a people management job. It's public speaking, communication, presentation, being able to read what the people across from you want and then figuring out how to bridge the gap.”

“Corporations are not democracies, and the CEO cannot make decisions by asking everybody what they think and asking for a show of hands and counting the votes. At the end of the day, the CEO is the ultimate executive, it is the chief executive. And the CFO's job, once a decision is made, unless there is fraud or some kind of violation of fiduciary duty going on, the CFO's job is to help the CEO execute the vision.”

“In a decent growth tech company, if you're running FP&A and strategic finance, three or four annual planning cycles is good, and then you know what the business is.

The times when that doesn't apply is if the business model, not the revenue growth, revenue growth can be really high, but if the business model is changing, if a company that is doing only software suddenly starts selling hardware as well and starts having multiple revenue streams, and the business is really changing, not in terms of pace, but in terms of complexity, then perhaps staying longer, you'll learn more.

But if it's a software company that's selling one product in one year, and then t...

Today, we're thrilled to have with us — Arjun Mehta, an experienced operator in the finance industry with an impressive career spanning over two decades across some of the world's most renowned corporations.  Arjun currently spearheads the financial strategies of Revolut India as their Chief Financial Officer.

Arjun’s journey through the finance world is as diverse as it is impressive. Before joining Revolut, he played a critical role as Senior Vice President, Head of Strategy at Max Life Insurance. Here, he wasn't just a strategist; he was a visionary, identifying groundbreaking growth initiatives and driving digital agendas, all while keeping his finger on the pulse of market trends and insights.

And who can overlook his nearly five-year tenure at Apple? As the Commercial Controller, Arjun was instrumental in structuring deals that significantly expanded Apple's footprint in India, taking on end-to-end responsibility for business planning and driving transformation across various channels.

He has also spent ten years at American Express, where Arjun ascended to the role of CFO for their Indian operations. From enhancing profitability to negotiating deals and managing investments, he was a force behind countless strategic decisions that shaped the company’s success.

Arjun's foundations in finance were laid at KPMG, and he further honed his skills at HT Media Ltd. His academic background is just as sterling, with credentials like an MBA from the prestigious Indian School of Business and a Chartered Accountant designation from the Institute of Chartered Accountants of India.

Throughout his career, Arjun hasn't just been a finance professional; he's been a strategist, a transformation leader, and above all, a visionary capable of steering multimillion-dollar companies through uncharted waters with his acute financial acumen and strategic foresight.

Let's welcome Arjun Mehta!

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Quotes:

“The greatest job of a modern-day CFO is to help the organization and people prioritize their jobs.”

“The leadership team doesn't do things. They get things done, and they're supposed to be the guideposts.”

“The greatest similarity across all three businesses (Amex, Apple, and Max Life) is a maniacal focus on margins, cash flows, and profitability.”

Traits to be successful in India?  “Patience, deep pockets, and speed to market, in that order.”

“It starts with being curious about everything and asking questions.”

“India is different. So to that extent, I think the rope or the slack that the global companies need to cut India, actually, and this is my personal view, determines the success or the presence in terms of scale that the company is able to get in India. So, yeah, culturally, even at a product customization level, etc., even tiered distribution because India being a fragmented market and consumer segment densities are not the same as other large markets, those adjustments need to be made, and they reflect in our way of functioning. They reflect in the processes and policies they deploy in the India market. So yeah, that's where the differences come in.”

“There's nothing called as the Indian consumer. The Indian consumer is at a point in time relative to the market offering and relative to the psychological economic climate in the country, and what I just called out changes every six months.”

“I very simplistically take it as three pillars, which the CFO needs to address – the shareholder pillar, the customer pillar, and the employee pillar.”

“I don't have eight hours in a day. If I have a six-member team, I have 48. And how am I utilizing those 48 hours? And at the end of the day, is the team feeling fulfilled, or it's a whole lot of nothing at the end of the day for them to say, you know what, I did six hours of meetings today, or I did 10 ho...

It is my utmost pleasure to introduce our esteemed podcast guest today, Mr. David Junius. Currently serving as the Chief Financial Officer at Cowbell Cyber, based in the vibrant city of New York, David brings with him a wealth of experience and a proven track record of excellence in the field of global finance.

With a career spanning over two decades, David has established himself as a highly accomplished Global Finance Executive, renowned for his expertise in areas such as corporate finance, business planning, accounting, and budgeting. His knack for developing new financial models and enhancing existing analytical tools has been pivotal in consolidating total P&L, showcasing his unparalleled ability to direct key executive functions in multi-cultural settings and delivering large-scale financial transformation.

David’s journey with Cowbell Cyber, a growth-stage startup that has raised over $100Mn, began in October 2022, and in just over a year, he has already made significant strides in propelling the company towards greater heights. Prior to this, he held the position of Chief Financial Officer at SiriusPoint in New York, where he played a critical role in the transformation and turnaround of two Bermuda reinsurers. His leadership saw the management of a considerable portion of the company's workforce spread across North America, Bermuda, Europe, and Asia, establishing him as a primary contact for investors and rating agencies.

His tenure at AIG, spanning 19 years, saw him in various pivotal roles, including CFO of International General Insurance, Vice President & Treasurer, and Head of Capital Strategy, among others. During this time, David managed financial reporting, business support, capital planning, and regulatory reporting for AIG’s most profitable general insurance segment, covering over 50 countries and territories.

David’s academic background is as impressive as his professional journey, with an MBA in Analytical Finance and Accounting from the prestigious University of Chicago, an MAIA in International Affairs and Russian Studies from The George Washington University, and a BA in International Relations and Soviet Studies from Boston University.

Ladies and gentlemen, please join me in welcoming a man of integrity, creativity, and unmatched work ethic, someone who brings a high degree of personal initiative to everything he does, Mr. David Junius.

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Quotes: 

“I think this is one of the greatest challenges for CFOs over the last 20 years. Everyone is in the technology business. It doesn't matter what your business is… from a CFO perspective, everybody's in the data business, and hence everybody's in the technology business.”

“The real challenge today is how to use data.”

“One of the key elements of being a good CFO is interacting with a different set of strategic partners, stakeholders, and giving the CEO feedback in a different way than what he's hearing from customers, distribution partners, and also employees.”

“They may come at it from the accounting side; they might come at it from the treasury side. They may come at it from the business side, and I was able to blend each of those experiences and really bring those together. And I think that gives me a bit of a different perspective than other CFOs that might've only come up through one function.”

“Treasury is a great place to learn a business because when you understand how the cash flows in an organization, you really understand what the levers are because you don't get caught up in the intangible or just the accounting items, you really see the cash flows.”

“Sometimes you have to have your eyes open, open to possibilities, but you also have to trust that maybe some of the people that you work for know you and know how you could fit and roll.”

“If you're good, you'll always get calls. And so...

We are stoked to welcome Akshay Sarma as our very special guest for this episode. Akshay is currently the Chief Financial Officer at Axio, and has been recognized as a BW CFO World 40 under 40 and a Financial Star.

With an impressive background spanning across derivatives, trading, and financial structuring, Akshay brings a wealth of experience from working in traditional and tech-enabled financial services organizations.

An alumnus of the prestigious Judge Business School, University of Cambridge, Akshay's journey in finance is nothing short of inspiring. From his early days at Deutsche Bank to leading the way at Axio, his story is a testament to his skill in management, trading, structured finance, and much more.

Today, Akshay joins us to share his insights on the evolving landscape of finance, provide a crash course on Lending businesses, and inspire with his journey in nurturing growth and innovation in the startups he's been part of and growing up the ranks to become a CFO. So, sit back, relax, and get ready to dive into the world of finance like never before.

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Quotes: 

“Learning is everything for me.” 

“Fintech was a theme.  Fintech is a way of life today.”

“How your productivity is defined is, are you doing, what you're doing, best?”

“You need lot of strokes of luck in life. You need people to back you at the right time.”

“I don't know if there is a financial (services) company that isn't a tech company today.”

“The biggest thing the trading floor gave me was the ability to multitask.”

“Modern day CFO is someone who is everybody's partner, and is probably the biggest enabler of business in the organization.”

" I believe complex things are a sum of a lot of basic things together."​​

"Just check the basics of everything first."​​

"When you are operationally sound, strategy becomes easy for you to build."​​

“Finance cannot be a brake because if finance hit the brakes, everything just stops, and the car just cannot stop, right? So, what you need finance to do is to actually act like the heart of a human body. You need to pump blood to every part of the body.”

“In the lending business, the folks who head risk and the folks who head finance are people who have to work the closest because when things shake up on the risk side, they inadvertently shake-up on the P&L.”

"The ability to raise money at a low rate drives everything... the only thing that proves, I think, a lending company's ability to stand out, is vintage."​​

“Everyone wants a retail portfolio because it's granular, the risk is easier to manage, and it's not lumpy. If one organization goes down, in wholesale lending it has a very big impact. Here you need a macro event to kind of happen for it to go down. So, it helps you manage risk a lot better.”

“There's a whole spectrum of ratings that you have to kind of keep moving up for your cost of funds to drop. And that's a journey. Even in the best of times, it'll take you three, four years.”

"Co-lending helps you maneuver this… It helps you kind of make sure you're playing in the right space. And I think the most important thing from a lender's perspective is it helps you manage leverage. I am not borrowing money directly on my balance sheet. This is money that I'm picking up, giving to an end borrower, giving back when he pays. So, there is no liability on my balance sheet to make an EMI payment every month.”

"Managing your leverage, ability to stay nimble at about two, two and a half x lever, three tops, not go to the four, five, which some of the bigger balance sheet players can do… when you're us or a smaller company, I think it's the right business model for us to grow in."​

"We're...

Priya shares her journey from being an engineer to becoming a founder and the challenges she faced along the way. She discusses the importance of partnerships and the role of risk-based pricing in the lending industry. Priya also talks about the evolution of ZestMoney's product and strategy, and how they stayed focused amidst various opportunities. She emphasizes the need to remain true to the company's vision and make decisions quickly. Priya also shares her approach to the CFO and COO roles and the importance of creating and growing functional departments. In this part of the conversation, Priya discusses the roles and responsibilities of a CEO and CFO, the importance of hiring for roles and evaluating functions, balancing short-term fires and long-term vision, maintaining and evolving company culture, advice for founding a startup, key successes and lessons learned at ZestMoney, crucial lessons for fintech startups, diversity and inclusion at Zest Money, making tough decisions in challenging times, and what motivates Priya to keep going.  

---

“Finance is all about allocation of money.”

“Fire fighting is part of the game.”

“Whatever doesn't kill you makes you stronger.”

“If I look at Zest, then obviously we had the idea and we had the concept and we were the initial sort of seed behind it, but then whatever it became later on and a lot of the success, it was a team effort.“

“Investment banking… it's a different mindset. And I just thought that being on the company side would be more creative.”

“I had so much conviction on it… that was the biggest pull that then trumped every pros and cons list and everything… I couldn't get rid of that concept in my head.”

“The difference between developed markets and developing markets is that developed markets are more efficient at allocation of money and developing markets are less efficient at allocation of money.”  

“As a founder... keep the decision making fast. Don't dwell on it too much, or say yes or no quickly.”

“Everything sort of lags behind always a little bit in startups. I don't think anyone can say that, they're completely ready for the growth and the challenges that are going to come up.”

“Culture is always an evolving thing. And it's actually something you can't really control.”

“Ultimately culture has to be in line with your business objectives.”

“It's a marathon and a sprint at the same time. So pace yourself and keep your strength and keep your own cool and calm first. I would say that to me personally.”

“We've kind of been giving away a lot of our technology and our product for free and we need to be able to start getting into that mindset of capturing value.”

“As a founder, you believe so much in your vision and mission and you live it and you become it and you're own life and your purpose is defined by it.”

In this conversation, Alex Small shares his background and journey in the finance and tech industry. He discusses his professional role from being a systems administrator to Head of Strategy and the importance of systems thinking in finance. Alex also talks about his experience at Zendesk and ClickUp, highlighting their positioning in the market. He explores the trade-off between profitability and growth in SaaS businesses and the key metrics to track in the industry. This part of the conversation covers key metrics for understanding business performance, and the comparison between SaaS and Payment's transaction-based business models. Further, in the Masterclass on Strategy, Alex discusses the role of strategy in business, differentiating good strategy from bad strategy, the challenges and considerations of strategy, the influence of data and technology on strategy, building a strategy team, the importance of internal mobility, and managing multiple roles and businesses. Additionally, Alex discusses the importance of professional relationships, the need to eliminate distractions and focus on tasks, his definition of success, his approach to leadership, and his perspective on career regrets.

Takeaways

- Systems thinking is crucial in finance to understand the interconnections between different aspects of a business.

- Promotions and success in a career often require a combination of hard work, competitive advantage, and strong relationships with business partners.

- Positioning in the market is essential for companies to differentiate themselves and find their niche.

- SaaS businesses face the challenge of balancing profitability and growth, with many prioritizing growth to stay competitive.

- CAC payback is a critical metric in SaaS, indicating how long it takes to recoup the cost of acquiring a customer. Key metrics for understanding business performance include customer lifetime value, CAC payback, and the ratio of customer lifetime value to CAC payback.

- SaaS and transaction-based business models have their own advantages and challenges, with SaaS offering strong margins and transaction-based models having a larger total addressable market (TAM).

- Strategy should connect operations or finance to strategy, and it is important for all teams to be strategic, not just those with 'strategy' in their title.

- Good strategy is comprehensive, actionable, and communicable, and it should accomplish something for the business.

- Data and technology play a crucial role in shaping strategy by providing competitive research and enabling benchmarking and analysis.

- When building a strategy team, consider internal mobility and the need for diverse perspectives and deep strategic experience.

- Internal mobility helps increase tenure and allows for iterative learning and growth within the company.

- Capabilities for a strategy team include a deep understanding of the business, the ability to connect different areas of strategy, and the skills to leverage data and technology effectively.

- Managing multiple roles and businesses requires prioritization, passion, and the ability to focus and work efficiently.

- Building great relationships is crucial for success in business and can lead to valuable partnerships and opportunities.

- Eliminating distractions and maintaining focus is key to productivity and achieving goals.

- Effective leadership involves building strong relationships based on trust, respect, and accountability.

Chapters

Introduction and Background

Journey and Key Milestones

Role as a Systems Administrator

Promotions and Success Factors

Positioning of Zendesk

Positioning of ClickUp

Profitability vs Growth

SaaS Metrics

Key Metrics for Understanding Business Performance

Comparing SaaS and...

In this conversation, Reba Cox delves into her extensive journey in the procurement field, transitioning from trading base metals to procuring them, and ultimately stepping into tech procurement. She begins by highlighting the fundamental skills and mindset essential for success in procurement, such as the importance of demand planning, establishing baseline prices for savings, and the critical role of building strong relationships with stakeholders.

Reba distinguishes between direct and indirect procurement, outlining the unique challenges and strategies each entails, particularly in managing software contracts. She emphasizes the necessity of understanding and planning for demand, alongside the crucial task of setting baseline prices to secure savings.

Further, Reba touches on the broader role of procurement within both manufacturing and tech industries, underscoring its strategic placement under operations in manufacturing firms and under the CFO in tech companies.

Additionally, Reba highlights the focus on security and scalability, especially in tech procurement, reflecting on the significance of these elements in today's industry. She also discusses the evolution of procurement tools and their value in facilitating the work of different teams, advocating for the integration of new technologies to streamline processes.

Moreover, Reba speaks to the personal side of her career, sharing insights on building a positive reputation, transitioning from a gatekeeper mindset to one that's more collaborative and aligned with business goals. She offers career advice and shares her ambitions, looking towards the future of procurement with an eye on innovation and efficiency.

Reba concludes by emphasizing the need for the procurement function to evolve alongside the industry, incorporating more advanced tools and strategies to address the complex challenges of today's business environment. This includes a strong focus on security, scalability, and aligning procurement strategy with the overarching goals of the organization, highlighting the transformative potential of procurement in both manufacturing and tech sectors.

Takeaways

* Procurement involves managing contracts, spend, and vendor relationships for a company's non-salary expenses.

* Building relationships with stakeholders and understanding their needs is crucial for procurement success.

* Demand planning and setting baseline prices are important strategies for achieving savings in procurement.

* In tech procurement, security and scalability are key considerations, while in manufacturing, savings and project-based initiatives take precedence.

* Managing software contracts requires careful negotiation, demand planning, and consideration of non-financial elements such as SLAs and security measures.

* Procurement is best placed under operations in manufacturing and under the CFO in tech companies.

* The lack of comprehensive tools is a major challenge in procurement.

* Automation and AI are key technologies that will transform procurement processes.

* Supplier collaboration and relationship building are critical in manufacturing, while in tech, procurement is often brought in only when something goes wrong.

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Quotes

“Procurement, by nature, is a function of functions.”

“Procurement is sales without the quota.”

“The more you absorb, especially when you're younger in your career, the more you'll be able to understand and piece things together.”

“The best thing to do when you come in is just absorb, ask questions, learn about other functions because your job as procurement is to make sure that everybody else's functions are ba...

In this episode, Peter Walker, Head of Insights at Carta, discusses his journey in the startup world and the role of data in his career. He shares insights on the challenges and trends in implementing analytics at scale. He also provides an overview of the funding landscape and the impact of the pandemic on fundraising. The conversation explores the impact of changing interest rates on startup funding and the challenges faced by startups in the current market. It discusses the decline in seed funding compared to series D funding, the need for capital in late-stage rounds, and the shift in fundraising dynamics. The conversation also touches on the liquidity of equity for startup employees, the decrease in startup hiring, and the changes in startup compensation. The guest shares insights on leadership, success, and advice for emerging professionals.

Takeaways

- Startups can leverage data to make informed decisions and improve their operations.

- Data storytelling is a powerful tool for communicating insights and making data more accessible.

- The implementation of analytics at scale requires data cleaning, understanding the audience, and integrating different databases.

- The funding landscape for startups has been challenging, with a decline in fundraising in recent years.

- The impact of the pandemic has varied across different stages of a company's life cycle.

- Changing interest rates have had a significant impact on startup funding, with seed funding down compared to series D funding.

- Late-stage rounds require massive amounts of capital, and the decline in late-stage funding raises concerns about where the money will go.

- Startup employees are facing challenges in accessing liquidity for their equity, leading to a decrease in exercise rates.

- The startup job market has seen a decrease in hiring and an increase in shutdowns.

- Startup compensation has undergone significant changes, with equity compensation decreasing and salary compensation remaining relatively flat.

- Leadership can be demonstrated at any level within a company, and energy and consistency are important qualities for leaders.

- Startups should consider starting fundraising earlier than expected and focus on making every dollar last longer.

- The guest's goal is to make Carta data ubiquitous and be the single source of truth for startup data.

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Quotes

“Energy is contagious.”

“The funding winter is thawing, but is still rather chilly.”

“Things are a lot harder than they appear on the surface.”

“A lot of marketers do themselves a disservice by not understanding data as much as they should.”

“The cap table is a record of who owns what percentage of a company.”

“A lot of B2B companies can actually use this as a new form of marketing. It's data content that educates your audience about the world and the market that they're in.”

“Insight is a piece of information that's going to help you make a decision.”

“Always on I think is it sounds good real time, but it isn't always necessary.”

“Industry, time, location, these are all very clear and obvious filters to put into your data that kind of expose and kind of tease out differences between parts of your data set.”

“I come in usually with a question. But oftentimes, the data leads me to things I wasn't really thinking about.”

Sanjay Jain, a CFO with over 20 years of experience in the media industry, shares his career journey and insights. Starting in finance after completing his CA, Sanjay worked across various sectors before focusing on media. Sanjay discusses the evolution of the media industry, from traditional cable and satellite TV to the rise of OTT platforms. He also talks about the challenges and opportunities in the industry, including the need for content discovery and the impact of regulations. Sanjay emphasizes the importance of leadership, continuous learning, and adding value in the finance function. He reflects on his roles at NDTV Imagine and Aaj Tak, including experiences with their IPOs and the specific challenges news channels face. He discusses the importance of having a good track record and a credible plan before going public. Jain also talks about the NDTV Imagine saga and the lessons learned from it. He emphasizes the significance of strategy in business and the unpredictable nature of content success. In retirement, Jain pursues passions like stock market investing and angel investments, measuring success by happiness and peace.

---

Takeaways

- The media industry has undergone significant changes, from traditional cable and satellite TV to the rise of OTT platforms.

- Leadership in the finance function involves backing your team, having a vision, and collaborating with other functions.

- The role of a CFO has evolved from being a controller and accountant to a strategic advisor who adds value across functions.

- Moving between industries is possible at a mid-level, but at senior positions, industry knowledge becomes more important.

- The CFO role allows for interaction with peers, insight into the company's growth, and the ability to influence decisions.

- Successful CFOs should be team players, have a desire to learn the business, and listen more than they speak.

- The IPO of Aaj Tak was a significant event in Sanjay's career, and he played a role in the company's growth and success. Having a good track record and a credible plan is essential before going public.

- The media industry is unpredictable, and success in content creation is often a matter of gut feeling.

- Retirement should be a time to focus on passions and find happiness and peace.

- Investing in the stock market requires careful observation and patience.

- Angel investments should be made with money that can be written off and should consider the founders' passion and knowledge.

- Success should be defined by happiness and peace, rather than just wealth.

---

Quotes

"The media industry had been bleeding for quite long....

Murali Sundararajan, a seasoned procurement leader, shares his extensive experience and insights in the field of procurement. Initially transitioning from an engineering background, Murali faced challenges that emphasized the importance of technical knowledge and strategic thinking in procurement. He highlights the transformation of procurement over the past two decades from a transactional function to a specialized, technology-driven aspect of business that significantly impacts cost management, process efficiency, and overall value addition.

Murali discusses the essential elements of procurement including sourcing, supply chain management, and vendor management, underscoring the need for a robust team led by a skilled head of procurement. Key traits for procurement professionals, as Murali notes, include communication skills, passion, technical expertise, and negotiation capabilities. He outlines annual goals for a procurement team which focus on cost reduction, process enhancement, team development, and aligning with business objectives.

Effective sourcing practices, according to Murali, involve networking, thorough research, and leveraging technology to identify and evaluate potential suppliers. He delves into risk management during vendor selection, addressing geopolitical, financial, and logistical considerations. The procurement process itself, as described by Murali, involves an RFI to gather initial data, followed by RFPs and RFQs to finalize supplier selection, emphasizing the importance of detailed contractual requirements and competitive pricing strategies.

Murali also touches on the significance of involving the procurement team early in the purchase process to optimize value and minimize risks. He discusses advanced topics such as the impact of automation, AI, and RPA on the future of procurement, and offers career advice for aspiring leaders in the field, reflecting on his own professional journey and the dynamic nature of procurement.

Takeaways

• Procurement plays a strategic role in reducing costs, improving processes, and bringing value to the company.
• Sourcing involves identifying the right partners, integrating technology, and reducing costs through automation.
• Supply chain management encompasses logistics, overseeing, and delivery of goods and services.
• Vendor management involves developing and empowering suppliers, promoting sustainability, and reducing costs.
• Hiring an experienced head of procurement is crucial to create a strong procurement team and develop a strategic procurement culture.
• Startups should prioritize hiring a procurement expert early on to avoid future challenges and ensure compliance. Procurement has shifted from a transactional approach to a specialized and technology-driven function.
• When hiring for procurement, consider communication skills, passion, technical expertise, and negotiation skills.
• Yearly goals for a procurement team should include cost reduction, process improvement, team member development, and meeting business unit goals.

Summary

In this episode, we are joined by Per Sjöfors, also known as "The Price Whisperer," who discusses the pivotal role that pricing plays in business profitability. Per explains that pricing has the highest leverage on profitability, exemplified by his "1% challenge," which shows that a mere 1% increase in price can lead to an 11.3% increase in profit. With over 15 years of experience in pricing strategy, Per has worked with companies across various industries, refining their approaches to maximize profitability. Per emphasizes the importance of understanding cultural differences in pricing and the necessity for companies to adapt their strategies when entering new markets. He discusses his book, "The Price Whisperer," which aims to educate people on the science of pricing and provide practical insights that go beyond academic theories. During our conversation, Per highlights common pricing mistakes, such as the reliance on cost-plus pricing and ignoring market segmentation. He explains that true pricing power comes from differentiation and the ability to increase prices without losing sales volume. Per stresses the importance of leveraging consumer perception and effective marketing strategies to create this pricing power. He also discusses the process of finding the right price for a product, which involves conducting thorough pricing research and understanding the various factors that influence pricing decisions. Per advocates for a holistic approach to pricing that encompasses the entire company, suggesting that a dedicated pricing function should guide marketing, product development, and price presentation. Looking towards the future, Per shares insights on dynamic pricing and the significance of understanding buyer behavior and psychology. He calls for businesses to move away from flawed pricing strategies, such as cost-plus or competitor-based pricing, and to focus on delivering value to customers through strategic differentiation.

Takeaways

- Pricing has the highest leverage on profitability, and a 1% increase in price can lead to an 11.3% increase in profit.

- Understanding cultural differences is crucial when it comes to pricing and entering new markets.

- Common pricing mistakes include relying on cost-plus pricing, not considering market segmentation, and viewing the market as homogeneous.

- Pricing power comes from differentiation and the ability to increase prices without losing sales volume.

- Leveraging consumer perception and marketing strategies can significantly impact pricing.

- Finding the right price involves conducting pricing research and considering various factors that influence pricing decisions. Move away from flawed pricing strategies and focus on differentiation and delivering value to customers.

- Price sets expectations and can influence customer satisfaction.

- Establish a dedicated pricing function within the company to guide pricing decisions, marketing, and product development.

- Understand buyer behavior and psychology to make informed pricing decisions.

- Consider the potential impact of dynamic pricing and the importance of price presentation.

- The future of pricing may involve advancements in technology such as AI and data analytics.

---

Quotes

“Pricing is not art. It's really science.”

“Pricing has the highest leverage on profitability.”

“For the average company, if you can increase sales volume with 1%, profit goes up 3.5%, because cost also goes up. If you can reduce your cost with 1%, profitability goes up 5.5%. But if you can increase your price or decrease your discounting, which of course is the same thing with 1%, profit goes up with 11.3%.

In this engaging conversation, Tim Smith, a renowned expert in pricing, delves into the critical role of pricing as a strategic imperative for companies. He shares his personal journey into the field, highlighting key milestones that have shaped his distinguished career. Tim addresses common pitfalls that companies encounter in their pricing strategies and underscores the necessity of strong leadership in making pricing decisions.

Throughout the discussion, Tim introduces the frameworks he employs to assess and improve pricing strategies, including the value-based pricing framework and the SpinoMeter. He underscores the crucial importance of understanding customer perception of value, using compelling examples from companies like Southwest Airlines and AutoCAD to illustrate successful value-based pricing.

Tim also explores various pricing structures and their practical applications, discussing how technology is transforming the landscape of pricing. Looking ahead, he envisions a future where pricing is recognized as a strategic function, emphasizing the need for greater professionalization in the field. This conversation offers valuable insights into the principles and challenges of pricing, providing a roadmap for companies to enhance their pricing strategies and drive business success.

Takeaways

- Pricing is a strategic imperative that requires leadership and should be championed at the highest levels of the organization.

- Companies often make mistakes in pricing, such as allowing salespeople to discount excessively or relying on pricing to fix marketing or targeting problems.

- The value-based pricing framework and the SpinoMeter are useful tools for evaluating and improving pricing strategies.

- Successful pricing is based on understanding how customers perceive value, not just the cost of production or margin.

- Value-based pricing can lead to higher margins by aligning prices with the perceived value of the product or service. Understanding the customer's alternative and whether they care about the difference in value is crucial for pricing decisions.

- Value-based pricing can lead to higher margins if the customer perceives a higher value.

- Different pricing structures, such as two-part tariff, tying arrangements, unit pricing, versioning, price segmentation, revenue management, subscription-based pricing, and fully dynamic pricing, can be applied depending on the situation.

- Pricing is becoming a strategic function and organizations are recognizing its impact.

- Technology, including AI and data analysis, is being used to improve pricing decisions.

- The future of pricing lies in professionalization and treating pricing as a discipline.

---

Quotes

“Pricing is a quantitative field. If you can't do the math, you kind of don't belong here.”

“(Strategy) is both a statement of where you want to go and a statement of where you will not play.”

“Organizations that treat pricing decisions slowly and methodically, not quick, which is completely opposite to what a sales wants, but slowly and methodically outperform in the long term, have higher return on assets, are more profitable in the long term than those that just treat it as a political football.”

“One of the common refrains I hear from CEOs and CFOs is that price is just a result of market dynamics. We've got supply, you've got demand, they come to equilibrium, there's nothing I can do about that.”

“So that was one where they didn't let salespeople do any discounting. The more common mistake is they let the salespeople do anything they want to.”

Rocky Lalvani, an advisor to small and medium-sized businesses, shares his insights on the Profit First method and how it can be applied to businesses of all sizes. He emphasizes the importance of focusing on profitability and making profit a driver rather than an afterthought. Lalvani explains that Profit First involves allocating money for specific purposes, such as profit, owner's pay, taxes, and operating expenses. By doing so, businesses can ensure that they have the cash flow to support growth and make informed investment decisions. He also highlights the need to measure and track the return on investments and the importance of understanding the cash flow implications of scaling a business. Lalvani also highlights the need for entrepreneurs to make hard choices and let go of employees or projects that are not driving profit. He explains how these principles can be applied in different business situations, including during market dislocations or crises. Additionally, Lalvani discusses the intersection of spirituality and business, emphasizing the importance of living in alignment with one's beliefs and values.

Takeaways

- Profit should be a driver in business, not an afterthought

- Allocate money for profit, owner's pay, taxes, and operating expenses

- Measure and track the return on investments - Understand the cash flow implications of scaling a business Focus on profit from the start and manage cash flow effectively

- Make hard choices and let go of employees or projects that are not driving profit

- Apply profit first principles in different business situations, including during market dislocations or crises

- Explore the intersection of spirituality and business and live in alignment with one's beliefs and values

---

Quotes

“I think in many cultures, people don't talk about money. It's a taboo subject. People don't ask questions about money.”

“I was shocked to learn that business owners were really bad with money.”

“I don't believe in grinding it out.”

“As a kid, I just knew I wanted to be wealthy. And so I would read and learn and figure stuff out.”

“Why don't we do sales minus profit equals expenses. Now, profit is the driver and we constrain our expenses.”

"Profit First makes sure that the taxes are there, the profits there, your pay is there, and that you're appropriately taking the right amount of money out of the company."

"Growth requires cash. And if you don't know how much cash you need to grow your business, you can grow your business and quadruple it and run out of cash."

“Most bookkeeping is not up to date. It's always behind... So this bank account shows you how much cash came in. And at the end of the day, that's what matters.”

“Business owners are resourceful. The problem is they're also lazy.”

“The problem is the P&L doesn't equal cash.”

“Wealth is built on the balance sheet and it's an area nobody talks about.”

“Hoping and dreaming are not profit levers.”

“One of the top reasons for bankruptcy is scaling and growth.”

“As long as cash is flowing, you can keep going.”

“Everyone wants complicated solutions… Just do si...

In this episode, Harsh Joshi, founder and CEO of DAO Studio, discusses artificial intelligence (AI) and its applications. He shares his background in the AI space and the projects he has worked on. Harsh explains that AI is the process of making a system learn certain behaviors and respond accordingly. He discusses the integration of hardware and software in AI systems and the importance of neural networks as function approximators. Harsh also touches on the concepts of pre-training and fine-tuning in AI models, as well as the use of large language models (LLMs) and diffusion models for image and text generation. He explains the role of RAG (retrieval augmented generation) in AI architectures and the challenges of prompt engineering, MLOps, and AIOps. The adoption of AI in businesses is still limited due to several reasons, including controllability, explainability, and decomposability. These fundamental problems hinder the ability to ensure quality assurance, governance, and liability. Privacy is another concern that businesses struggle with when deploying AI systems. Open source models are gaining popularity in the AI space because they provide transparency, collaboration, and the ability to iterate and improve. However, open source initiatives by big corporates are driven by economic opportunities rather than social benefits. The deployment of AI at scale requires a collaborative approach involving subject matter experts, product teams, software engineers, and finance teams. YOJN.ai, a product by DAO Studio, aims to simplify AI deployment, improve transparency, and provide control and fine-tuning capabilities. CFOs and finance teams can benefit from YOJN by gaining better visibility into costs, returns, and modeling, as well as ensuring transparency in pricing and deployment.

Takeaways

- AI is the process of making a system learn certain behaviors and respond accordingly.

- Neural networks are used as function approximators in AI systems.

- Pre-training and fine-tuning are techniques used in AI models.

- Large language models (LLMs) and diffusion models are used for image and text generation.

- RAG (retrieval augmented generation) is a technique used in AI architectures.

- Controllability, explainability, and decomposability are fundamental problems that hinder the adoption of AI in businesses.

- Privacy is a concern for businesses when deploying AI systems.

- Open source models are gaining popularity in the AI space due to transparency, collaboration, and the ability to iterate and improve.

- The deployment of AI at scale requires collaboration between subject matter experts, product teams, software engineers, and finance teams.

- YOJN.ai simplifies AI deployment, improves transparency, and provides control and fine-tuning capabilities for CFOs and finance teams.

---

Quotes

"AI is more of a marketing term, but if you think about it, it's about making systems learn behaviors and respond to stimuli."
 
"When you talk about artificial intelligence, it’s all about making systems intelligent and the challenge is, can these systems self-learn?"
 
"The AI systems that are all the rage today, which scale well and generalize well, are neural networks, which are essentially function approximators."
 
"The whole idea of thinking hardware separate, software separate doesn’t really make sense when you’re talking about artificial intelligence."
 
"The magic of AI lies in its ability to approximate functions and form decision boundaries within data."
 
"Prompt engineering is a field that's gonna go away as fast as it has come."
 
"I don't think prompt engineering actually moves any significant needle."
 
"T...

In this insightful podcast clip, Srini Phatak, Deputy CFO and Controller of Unilever, shares his expert advice on how to succeed in the world of finance. Discover the four key roles every finance professional must master: Strategist, Catalyst, Operator, and Steward. Learn why adaptability, strategic thinking, and strong leadership are essential for climbing the corporate ladder in finance. Tune in to gain valuable insights on making a significant impact in your finance career and standing out as a leader. Don't miss this opportunity to learn from one of the industry's top experts! #Finance #CareerSuccess #Leadership #Podcast

In this insightful podcast clip, Srini Phatak, Deputy CFO and Controller of Unilever, shares his personal definition of success and offers practical advice on how to achieve it. Srini emphasizes that success is not solely defined by titles or salaries but by the impact you create in your business and with the people around you. He discusses the importance of balancing work and personal life, managing energy and emotions, and embracing challenges and setbacks. Whether you're an emerging professional or a seasoned leader, Srini's wisdom provides a valuable roadmap for a fulfilling and impactful career. Tune in to gain a deeper understanding of what true success means! #Success #CareerAdvice #Leadership #Podcast

In the dynamic realm of Software as a Service (SaaS), the pursuit of high EBITDA margins often sparks extensive debate among industry professionals. The question at the heart of this discourse is whether the widely coveted 30% EBITDA margin is a tangible goal or merely an elusive mirage. This discussion unfolds against a backdrop where SaaS markets do not typically produce a singular dominant player but do grant substantial value to market leaders.

The Dream of High Margins in SaaS

The allure of achieving a 30% EBITDA margin is not unfounded. It stems from the understanding that SaaS, with its recurring revenue model and potential for scalability, inherently offers the promise of robust margins. However, the path to realizing these margins is fraught with challenges, including operational inefficiencies, market misalignment, and the strategic decision to reinvest in growth.

Growth vs. Profitability: The SaaS Dilemma

The core of the matter lies in the delicate balance between maintaining growth and achieving profitability. It's posited that high profitability, especially margins as ambitious as 30%, might necessitate a slowdown in growth for medium-sized and semi-mature SaaS businesses. This trade-off emerges from the strategic choices companies face: reinvest earnings to fuel growth or prioritize immediate profitability.

Historically, SaaS businesses have leaned towards reinvestment, driven by the belief that the value derived from growth exceeds the immediate returns from high margins. This approach is underpinned by the sector's overall positive outlook, encouraging companies to double down on expanding their market presence and product offerings.

A Closer Look at Real-World Examples

By examining real-world scenarios, such as companies that have managed to strike a balance between growth and positive EBITDA margins, it becomes evident that high profitability is not entirely out of reach. However, this balance is often a result of strategic decisions that prioritize long-term growth over short-term profitability metrics. The critical consideration is whether aiming for high margins would deter a company's ability to innovate and compete, especially in a landscape that continually evolves with advancements in technology.

Investor Expectations and Strategic Decision-Making

Investor influence plays a significant role in shaping the strategies of SaaS companies, particularly public ones. The pressure to meet quarterly expectations can sometimes skew priorities towards short-term gains rather than long-term viability and market leadership. This tension between investor expectations and strategic long-term planning highlights the complexity of navigating the SaaS business environment.

The Imperative of Continuous Innovation

The conversation also underscores the importance of continuous investment in research and development. Staying at the forefront of technological advancements—be it through AI, cloud computing, or other emerging technologies—is paramount for sustaining growth and remaining competitive. The necessity of balancing capital allocation with the imperative to innovate presents a perennial challenge for finance and strategy professionals within SaaS organizations.

The Role of Finance in Shaping SaaS Success

Finally, the role of finance in evaluating and guiding investment decisions towards high ROI projects is crucial. The collaborative efforts between finance and other departments, such as product development and strategy, are vital for crafting scenarios that maximize both growth and profitability. This multidisciplinary approach is essential for navigating the uncertainties of market demand, technological shifts, and competitive dynamics.

Conclusion

The pursuit of 30% EBITDA margins in the SaaS industry is a complex endeavor, intertwined with strat...

In the dynamic world of Software as a Service (SaaS), understanding and leveraging the right metrics can be the difference between merely surviving and truly thriving. A particular set of metrics, deeply ingrained in the success stories of all storied SaaS companies, can serve as a beacon for businesses aiming to achieve sustainable growth. Among these, Customer Acquisition Cost (CAC) payback stands out as a crucial metric, but it is just the beginning. This podcast delves into the essential metrics that SaaS businesses should monitor closely, exploring how they intertwine to drive exponential growth.

The Paramount Importance of CAC Payback

CAC payback, the time it takes for a company to recoup its investment in sales and marketing through the revenue generated, is a fundamental indicator of a business's efficiency and growth potential. An ideal CAC payback period is 12 months or less, indicating a healthy, self-sustaining business model capable of exponential growth. This metric essentially measures the speed at which invested capital can be turned into profitable revenue, allowing for further reinvestment and growth.

Beyond CAC Payback: Customer Lifetime Value (LTV) and LTV to CAC Ratio

While CAC payback provides immediate insight into the efficiency of sales and marketing spend, understanding the long-term value of customers is equally important. This is where Customer Lifetime Value (LTV) comes into play. LTV measures the total revenue a business can expect from a single customer account throughout their relationship with the company. Comparing LTV to CAC, then, offers a comprehensive view of both the immediate and enduring value of customer acquisition efforts.

The LTV to CAC ratio, in particular, is telling of a business's sustainability and profitability. A high ratio indicates that the value derived from a customer significantly outweighs the cost to acquire them, highlighting an efficient and potentially lucrative business model.

The Enterprise Sales Perspective: High Value but Long Payback

The application and significance of these metrics can vary by sales model. In enterprise sales, for example, a longer CAC payback period is common due to prolonged and expensive sales cycles. However, these accounts often exhibit low churn rates and high potential for expansion, justifying the initial investment. This scenario underscores the necessity of balancing immediate payback concerns with the overarching value and return on investment.

The Rule of 40: Balancing Growth and Profitability

Another critical metric to consider is the Rule of 40, which assesses a company's health through its growth and profitability. It suggests that the sum of a company's revenue growth rate and profit margin should be 40% or more. This metric helps businesses navigate the trade-offs between investing in growth and achieving profitability, providing a framework for strategic decision-making in different economic conditions.

Churn: The Ultimate Health Check

Finally, churn rate, the percentage of customers who discontinue their subscriptions within a given period, acts as a comprehensive indicator of a business's health. It reflects not just lost revenue but potential issues with competitive positioning, customer experience, and overall market strategy. Monitoring churn in tandem with the other metrics offers a nuanced understanding of a business's trajectory and areas needing improvement.

Integrating Metrics for Holistic Analysis

While each metric offers valuable insights on its own, the true power lies in their integration. Understanding the interplay between CAC payback, LTV, the LTV to CAC ratio, the Rule of 40, and churn rate allows businesses to craft a holistic strategy focused on sustainable growth, profitability, and customer satisfaction. This suite of metrics provides a comprehensive framewo...

In the rapidly evolving landscape of modern business models, companies like Stripe and traditional Software as a Service (SaaS) platforms present a fascinating study in contrasts and comparisons. Having had the opportunity to delve into the inner workings of Stripe, a leading fintech company, it's clear that both fintech and SaaS models offer unique advantages and face distinct challenges. Here's a closer look at the dynamics, complexities, and opportunities each model holds.

The Profitability Conundrum

SaaS companies enjoy incredibly strong margins, primarily due to their recurring revenue streams. The path to profitability for these businesses is relatively straightforward, with inefficiencies, lack of product appeal, or heavy investment in growth being the main hurdles. On the flip side, fintech companies like Stripe operate on a different spectrum of financial dynamics. The margins in payment processing are notably thin, squeezed by the fees paid to partners such as Visa and MasterCard. This leaves a much smaller slice of the pie for the company after transactions are processed, highlighting the inherently low-margin nature of the payments industry.

TAM (Total Addressable Market) Challenges and Opportunities

The Total Addressable Market (TAM) represents a critical factor for growth potential in both sectors. For SaaS businesses, TAM can often appear as a gold mine at first glance. However, upon closer inspection, companies might find their true market potential (or Serviceable Available Market - SAM) to be considerably less when accounting for realistic customer acquisition prospects. This limitation can significantly cap growth potential and valuation aspirations.

Conversely, the fintech space, particularly in payments, boasts an expansive TAM that encompasses a percentage of virtually all digital transactions worldwide. For Stripe, this translates into a staggering portion of global GDP, offering a vast playground for growth and expansion. The continuous digitalization of businesses across the globe further augments this TAM, presenting ongoing opportunities for fintech companies to extend their reach and deepen market penetration.

Navigating Complexity

Transitioning from a finance role in SaaS to one within a fintech giant like Stripe sheds light on the sheer complexity of operating in the fintech space. Stripe's diverse product suite, tailored to myriad countries, market segments, and customer types, underscores the intricate nature of fintech business models. Regulatory, banking, and infrastructural variances across geographies add layers of complexity that SaaS companies seldom encounter.

Fintech companies must navigate these challenges while maintaining impeccable reliability and security. The consequences of a breach could be catastrophic, emphasizing the critical importance of these elements in the fintech industry. The operational, regulatory, and security hurdles that fintech companies like Stripe manage are monumental, attesting to the complexity and sophistication required to thrive in this space.

Concluding Thoughts

The journey through the worlds of fintech and SaaS unveils a landscape filled with both daunting challenges and lucrative opportunities. The business models, while distinct, each possess unique strengths — from SaaS's enviable profit margins to fintech's expansive TAM and inherent scalability. Stripe's success story, amidst the complexities of global payment processing, showcases the potential rewards for companies that can navigate these intricate environments effectively.

In essence, the fintech and SaaS sectors offer diverse pathways to growth and profitability, each demanding a tailored strategic approach. For businesses and finance professionals exploring these avenues, understanding the nuanced differences and inherent challenges of each model is crucial. As the digital econom...

What is Strategy? - A Deep Dive into Its Real Essence and Execution

In an era where the term "strategy" is ubiquitously tossed around in corporate corridors, its true essence often remains shrouded in ambiguity. Alex, a seasoned strategist, sheds light on the multifaceted nature of strategy, debunking the myth that it’s all about lofty titles without the grind. This comprehensive guide provides insights from Alex's masterclass on strategy, navigating through the misconceptions, the integral role of various teams, and the intricacies of crafting actionable strategies. Basically, you'll get the framework to the eternal question - how to create a business strategy?

The Misunderstood Glamour of Strategy

Strategy, often perceived as a glamorous echelon reserved for the elite few, is, in reality, a domain fraught with misconceptions. Alex humorously notes the allure of incorporating "strategy" into one’s title, highlighting a widespread corporate fascination. However, he argues this dilutes the concept, inadvertently suggesting that strategic thinking is exclusive to certain roles. This could not be further from the truth. Strategy should permeate every facet of an organization, from finance to HR, necessitating a holistic and inclusive approach.

Strategy Across the Board: A Unified Approach

The conversation with a CFO revealed an insightful perspective: every team within an organization should imbue their operations with strategic thinking. This is not to say that every department needs to operate in isolation under the "strategy" banner but rather, strategic finance and other functions should collaborate closely, ensuring that every action aligns with the broader business objectives.

Alex emphasizes that true strategy intertwines operations, finance, and strategic planning, far from the hands-off approach some might assume. He shares examples from his own career where the most impactful strategic roles involved a deep engagement with the operational and financial aspects of the business, contrary to the misconception of strategy as a purely abstract exercise.

Good Strategy vs. Bad Strategy: The Differentiator

At its core, the efficacy of a strategy hinges on its ability to propel the business forward. Alex outlines the attributes of a well-formed strategy—comprehensive, actionable, and communicable. He stresses the importance of operational integration, where vague directives like "Go big on enterprise" must be dissected into tangible action plans detailing the what, how, and when.

The Strategic Role of Finance

Alex underlines the pivotal role finance teams play in bridging strategy with operational reality. This synergy between finance and product development underscores the transformative impact of strategic planning when executed with a nuanced understanding of the business’s core offerings.

Decentralizing Strategy: A Collective Endeavor

Contrary to the notion of centralizing strategy within a dedicated team, Alex advocates for a dispersed approach, encouraging strategic thinking across all levels and departments. He shares insights from Stripe, where a senior leader played the role of a "synthesizer," harmonizing diverse strategic inputs across the company. This exemplifies the value of having strategic liaisons embedded within various functions, fostering a cohesive strategic vision that is reflective of the entire organization’s insights and expertise.

Strategy in the Age of Data and Technology

In the contemporary business landscape, data and technology play a crucial role in shaping strategy. Alex warns against the pitfalls of basing strategic decisions on anecdotal evidence or hearsay. Instead, he advocates for a data-driven approach, leveraging technology to gather comprehensive insights that inform well-rounded strategies. Moreover, he encourages a first-principles mi...

Why Indian Executives are So Successful Globally?

The global success of Indian executives is a phenomenon that has garnered significant attention in recent years. As India emerges as a major player on the world stage, its executives are increasingly occupying top positions in leading global corporations. But what drives this success? Let's delve into the unique qualities and experiences that set Indian executives apart.

The Story of India and Its Executives

The journey of Indian executives mirrors the story of India itself. While India has a rich history dating back millennia, the real narrative of its rise in the global arena has been written over the last 25 to 30 years. This period of rapid economic growth and liberalization has not only transformed India but also its business leaders.

Indian executives embody the "art of the possible." They are driven by the hope and ambition of what can be achieved. This forward-looking mindset is a key factor in their success, both within India and internationally. Their journey is not just about personal advancement but about pushing the boundaries of what is achievable.

Resilience and Adaptability

One of the defining characteristics of Indian executives is their resilience. Coming from a country with immense diversity and numerous challenges, they have learned to navigate complex environments with agility. This adaptability is a critical asset in the dynamic and often unpredictable global business landscape.

In contrast to many Western executives who may have grown up in more privileged settings with many resources readily available, Indian executives often rise from more modest beginnings. This background instills a sense of determination and a relentless drive to overcome obstacles and seize opportunities.

Ambition and Aspiration

Indian executives are fueled by high aspirations and a strong desire for growth. The environment they come from is one of intense competition and continuous striving for excellence. This ambition is not limited to personal success but extends to contributing to the growth and progress of their organizations.

The rise of Indian executives in global roles also reflects the aspirations of a nation eager to make its mark on the world stage. Their success stories inspire countless others back home and demonstrate that with hard work and vision, one can achieve remarkable heights.

A Global Perspective

Another factor contributing to the success of Indian executives is their global perspective. Many have pursued education and early career opportunities in different parts of the world, giving them a broader understanding of diverse cultures and markets. This global outlook is crucial in today's interconnected world where businesses operate across borders.

Moreover, Indian executives bring a unique blend of Eastern and Western management philosophies. They combine traditional values with modern business practices, creating a balanced approach that resonates well in various cultural contexts.

Conclusion

The success of Indian executives on the global stage is a testament to their resilience, adaptability, ambition, and global perspective. They represent the dynamic and forward-thinking spirit of a nation that is rapidly transforming and making significant contributions to the world.

As India continues to grow and evolve, its executives will undoubtedly play an even more prominent role in shaping the future of global business. Their journey is a source of inspiration and a powerful reminder of the art of the possible.

Rethinking Risk Management: A Strategic Approach

Risk management is often misunderstood as a restrictive and defensive practice. Many view it as a hindrance, focusing on the negatives and potential failures. However, this perspective misses the broader, more strategic role that risk management plays in driving success. Let's explore a more integrated and proactive approach to risk management.

The Importance of Taking Risks

Taking risks is essential for achieving higher returns. In every decision we make, whether it's choosing to act or to abstain, we are inherently taking risks. Avoiding risk entirely is not only impractical but also counterproductive. To succeed and achieve significant growth, it is crucial to embrace risk as an integral part of the decision-making process.

Integrating Risk Management

Instead of treating risk management as a checklist item at the end of a proposal, it should be viewed as a fundamental aspect of strategic planning. By thinking about risk management from the outset, we can identify and address potential challenges proactively. This approach allows us to balance risk and opportunity effectively, leading to better outcomes.

Consider the following reframed approach:

1. Identify Opportunities: Start by clearly defining your goals. For example, if your objective is to attract more consumers, increase prices, or achieve cost savings, articulate these targets upfront.

2. Assess Necessary Risks: Once the goals are set, determine what risks need to be managed to achieve these objectives. Instead of asking, "What if this goes wrong?" focus on "What do we need to do to make this work?"

3. Develop a Risk Management Strategy: With the opportunities and associated risks identified, create a comprehensive strategy to manage these risks. This includes mitigating potential downsides while leveraging opportunities for growth.

Reframing the Risk Question

The traditional approach to risk management often centers on the fear of failure. This mindset can stifle innovation and progress. Instead, we should reframe our thinking:

   Old Question: "If I price up, there is a risk."

   New Question: "I want to gain more consumers and increase prices. What does it take to get there, and what risks do we need to manage?"

By shifting the focus from fear to opportunity, we create a more positive and proactive environment. This encourages taking calculated risks that drive growth and innovation.

The Role of Leadership

Effective risk management requires strong leadership. Leaders must foster a culture that embraces risk as a natural and necessary part of achieving success. This involves encouraging open discussions about potential risks and opportunities, promoting a balanced view of risk-taking, and supporting teams in developing robust risk management strategies.

Conclusion

Risk management should not be seen as a restrictive or defensive practice. Instead, it should be an integral part of strategic planning, focused on balancing risk and opportunity. By taking a proactive and integrated approach to risk management, we can unlock new opportunities for growth and success. Remember, every decision involves risk. The key is to manage these risks effectively to achieve your objectives.

Embrace risk, reframe your questions, and lead with a balanced approach to risk management. This strategic mindset will help you navigate challenges and drive your organization forward.

The Importance of Decisions in Business

In the fast-paced world of business, decision-making is a critical skill that can significantly impact an organization's success. However, contrary to common belief, effective decision-making isn't about making numerous choices daily but rather focusing on making fewer, yet more impactful decisions. Let's explore the nuances of decision-making in business and why it's essential to prioritize and perfect this process.

Evaluating Upside and Cost

In business, decisions are rarely about finding a single "right" or "wrong" answer. Instead, it's about evaluating the potential upside and the associated costs of realizing that upside. This means that every decision should be weighed carefully, considering both the benefits and the risks involved.

For instance, when evaluating a new market entry, the decision isn't just about the potential revenue but also about the costs and risks, such as regulatory challenges, competition, and operational complexities. The key is to balance these factors to make informed decisions that align with the organization's strategic goals.

The Paradox of Decision Quantity

A common misconception in large organizations is that more decisions equate to better management. However, making too many decisions can stifle innovation and hinder the organization's agility. In reality, successful organizations empower their teams to make decisions at various levels, reducing the burden on top leadership and fostering a culture of autonomy and responsibility.

As a leader, it's crucial to focus on fewer, but more significant decisions. These are the strategic choices that have far-reaching implications for the organization's direction and success. By concentrating on the big decisions, leaders can ensure they have the time and resources to make these choices thoughtfully and effectively.

The Role of Objectivity

Objectivity is a cornerstone of effective decision-making. Leaders must bring a balanced and unbiased perspective to the table, especially when making critical decisions. This involves gathering relevant data, considering diverse viewpoints, and analyzing the situation from multiple angles.

Objectivity also means being aware of cognitive biases that can cloud judgment. By fostering an environment where facts and evidence take precedence over personal opinions or preconceived notions, leaders can make more rational and well-informed decisions.

Enabling Conversations

A significant portion of a leader's role is to facilitate and enable meaningful conversations around important decisions. This involves creating a collaborative environment where team members feel comfortable sharing their insights and concerns. By engaging in open dialogues, leaders can harness the collective intelligence of their teams to arrive at better decisions.

Enabling conversations also means breaking down silos within the organization. Cross-functional collaboration can provide a more comprehensive view of the potential impacts of a decision, leading to more holistic and effective outcomes.

Making Big Decisions Right

Ultimately, the goal is to ensure that the big decisions are made correctly. This requires a deliberate and structured approach to decision-making. Leaders should:

   1. Define the Decision: Clearly articulate the decision that needs to be made, including its scope and significance.

   2. Gather Information: Collect relevant data and insights from various sources to inform the decision.

   3. Evaluate Alternatives: Consider multiple options and weigh their potential upsides and costs.

   4. Engage Stakeholders: Involve key stakeholders in the decision-making process to gain diverse perspectives.

   5. Make the Decision: Commit to a decision based on a thorough evaluation of the available information.

   6. Monitor and Adjust: After implementin...

In this episode, Rohit Agarwal interviews Jean-Manuel Izaret (JMI), a managing director and senior partner at Boston Consulting Group (BCG), about the strategic importance of pricing in business. JMI shares his background in engineering and how he transitioned to consulting. They discuss the challenges of pricing, the role of pricing in business model innovation, and the alignment of pricing with value creation. JMI emphasizes the importance of understanding costs, customer value, and competition in pricing strategies. He also highlights the different pricing approaches for mature industries, luxury brands, and technology companies.

JMI shares his views on impact of product differentiation, why capturing all the value may not be the best strategy, how to think about fair pricing strategy and nuances of dynamic pricing and associated bad reputation. They discuss game theory in pricing, how pricing strategies can vary across different global markets, as cultural perceptions of fairness and pricing differ, and how companies should customize their pricing strategies based on their specific situation and market dynamics.

The conversation further explores various topics, including the impact of inflation on prices, the role of AI in pricing, the balance between simplicity and complexity in pricing, and the challenges and lessons learned in strategic pricing projects. The future of pricing is discussed, highlighting trends such as price differentiation and dynamic pricing. 

Takeaways

- Pricing is a strategic lever that can change the trajectory of a business and industry.
- Understanding costs, customer value, and competition is crucial for effective pricing strategies.
- Different industries require different pricing approaches, such as cost-plus pricing, value-based pricing, or pricing to scale.
- Pricing should align with value creation and capture, enhancing both customer satisfaction and profitability.
- Pricing is a cross-functional discipline that requires collaboration between finance, marketing, and sales.
- Companies should consider pricing as an integral part of their business strategy and align it with their value proposition. Capturing all of the value may make customers indifferent between you and your competitors.
- Sharing value and creating a fair pricing strategy is important for building long-term relationships with customers.
- Dynamic pricing can be effective when implemented correctly, but it requires careful communication and justification.
- Game theory pricing can be effective in situations with few competitors, but it requires understanding the dynamics between competitors and finding an equilibrium.
- Pricing strategies can vary across different global markets, as cultural perceptions of fairness and pricing differ.
- Companies should customize their pricing strategies based on their specific situation and market dynamics. Inflation can impact prices, and people's willingness to pay higher prices can contribute to price stability.
- AI models are currently priced per user, indicating that they are here to help rather than replace humans. When AI models are priced per task or outcome, it may indicate a shift towards replacing humans.
- Adding complexity to pricing models can be advantageous for sellers, but companies should be careful not to push it too far, as it can lead to customer dissatisfaction and the emergence of competitors offering simpler pricing.
- Strategic pricing projects require leaders who are open to radical decisions, willing to ask the right questions, and accept the answers from their team.
- The future of pricing may involve more price differentiation, dynamic pricing, and the use of AI to manage complexity.

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Quotes

“People underestimate the strategic side of pricing.”

In a recent podcast episode, Rohit Agarwal and Jean-Manuel Izaret (JMI) dived into a pressing question on many minds today: "Is AI going to take our jobs?" Their conversation illuminated an often-overlooked aspect of AI's impact on employment – pricing models.

The Current AI Landscape

AI technologies have undeniably transformed various sectors, performing tasks that were once exclusively human domains. With the advent of advanced AI models like ChatGPT-4, which can mimic human conversation and perform numerous functions, the anxiety surrounding job displacement is understandable. However, JMI offers a nuanced perspective by examining how these technologies are priced.

Two Primary AI Pricing Models

Per Token Model:

This model is commonly associated with AI services like ChatGPT, where usage is measured and billed based on the number of tokens (or units of text) processed. This model doesn't directly correlate to replacing human jobs but rather complements human capabilities by offering an efficient way to handle large volumes of data and tasks.

Per User Model:

Seen in AI tools like Copilot, this model charges based on the number of users. According to JMI, this pricing structure inherently supports human workers rather than replacing them.

The rationale is simple:

if AI were designed to replace humans entirely, the user base would shrink, leading to reduced revenue for AI companies. Therefore, as long as AI is priced per user, its role is primarily to assist and augment human productivity.

The Future:

Task-Based Pricing JMI predicts a significant shift in AI's role in the workforce when pricing models evolve to focus on tasks or outcomes rather than users. This change would signal AI's capability to fully replace specific human tasks, charging for the efficiency and productivity achieved without human intervention. In this scenario, AI wouldn't just enhance human work; it would render certain human roles redundant.

Implications for the Workforce

The current per-user pricing model suggests that AI is not yet at a point where it can entirely replace human labor across the board. However, even with this model, some level of job displacement is inevitable as companies seek efficiencies and cost savings. The key takeaway from JMI's insights is the importance of monitoring AI pricing strategies as indicators of broader shifts in the labor market.

Preparing for Change

Businesses and employees must stay vigilant and adaptable in this evolving landscape. Understanding AI pricing models can provide a clearer picture of how and when certain job roles might be at risk. Emphasizing continuous learning and skill development will be crucial for workers to remain relevant and competitive.

In conclusion, while AI continues to advance and integrate into various sectors, the immediate threat of widespread job displacement may be overstated, given current pricing models. However, as these models evolve, so too will the impact of AI on the workforce. Staying informed and prepared will be essential for navigating this dynamic and ever-changing landscape.

In this episode, Michiel de Bruijn, a procurement lead at Bloomreach, shares his journey in the field of procurement and discusses the challenges and strategies involved in software procurement. He highlights the importance of understanding the specific needs of the business and aligning procurement objectives with overall business goals. Michiel also emphasizes the significance of cost reduction, turnaround time, and compliance in procurement. Additionally, he explains the complexities of cloud procurement and the need for benchmarking and understanding the metrics and criteria of different cloud providers. Michiel also highlights the need for compliance and privacy considerations when dealing with AI applications. The future of procurement, according to Michiel, lies in direct access to data, community platforms for sharing experiences, and aggregator platforms for standardized pricing and contract terms. He advises aspiring procurement professionals to gain experience through internships and to reach out to industry experts for guidance.

Takeaways

- Align procurement objectives with overall business goals

- Focus on cost reduction, turnaround time, and compliance

- Understand the complexities of cloud procurement and the need for benchmarking

- Software procurement requires Apple-to-Apple comparisons and benchmarking

- Benchmarking is crucial in procurement to ensure fair pricing and transparency

- Compliance and privacy considerations are essential when dealing with AI applications.

- Managing a multifunctional procurement process requires prioritizing risks and customizing the process accordingly.

- Optimizing software contracts involves understanding the scope, documenting requirements, and tracking savings.

- The future of procurement includes direct access to data, community platforms for sharing experiences, and aggregator platforms for standardized pricing and contract terms.

- Aspiring procurement professionals should gain experience through internships and seek guidance from industry experts.

- Success in procurement is defined by making small daily impacts, enjoying the work, and continuously learning and adapting to new challenges.

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Quotes

“Procurement is still such an undersold profession.”

“The great thing about the profession is that everything I do is with people, for people, and yeah, so it's very people-oriented.”

“Ironically… every crisis for procurement is a good one because like suddenly procurement gets a voice.”

“[Cloud spend is] way more about utilization, and optimizing utilization and infrastructure versus the actual negotiation.” 

“Without benchmarks, you're just kind of standing out in the street naked.”

“[As a negotiator] don't change too far away from your personality.”

“You're not negotiating with another company, you're negotiating with a person.”

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Where to find Michiel de Bruijn: