Finance as a Growth Driver

Mika Kasumov: I almost fell into it a little bit accidentally. This was a while ago, but when I graduated from college in the middle of a financial crisis, one financial crisis ago, not the most recent one, I ended up working in e-commerce at Sears, the iconic American brand just in the cusp of where we still thought there was a chance to turn it around. And I realized that I’m really good at bridging product managers, engineering teams, business outcomes, and kind of like customer outcomes. So that led me to seek out a role in an analytics-driven role in tech, right? And I ended up doing M&A at eBay, which taught me a ton, right, when you’re coming in as a relatively junior analyst on an M&A team, you have a fantastic exposure to thought leaders, right? You have exposure to the C-suite, you have exposure to the M&A committee, talking about board level considerations. And I learned so much from that in terms of just how to think as an executive and how to think of it as an investor. And I think that’s something that to this very day continues to permeate the way I operate, the way I advise my clients, the way I really approach the finance function, focusing on finance being a driver for growth as opposed to an accounting oriented cost center.

Why finance is a growth driver#

Rohit Agarwal: Very cool. Tell us more about what you are doing right now. You are no more in that operational seat as you used to be. You are more of an advisor, a consultant to the CEOs, to other CFOs. So what is Abacus & Pencil? How did you come up with that idea? And what is it really trying to solve?

Mika Kasumov: that’s a great question. I’ll give you a little bit of context and kind of how I got started because I’m really in my third quarter. So, you know, any early feedback you have here goes a long way towards shaping the journey. But I hit a point in my career last year where the natural next step was to be a tech CFO. And I realized that that’s not what I was passionate about. What I was really passionate about wasn’t necessarily going and running a fantastic finance team at one company. What I was passionate about was helping transform the way the finance function operates within the tech startup world. And that’s why I started this, kind of went down this consulting journey, looking for the opportunity to go partner up with visionary founders and CEOs and operators and CFOs and CROs and change the way finance is viewed in the, in the startup ecosystem, change the way we frankly, people like myself deliver value. And because fundamentally, I think that finance can be a competitive advantage. Right. It’s not the function you hire for compliance. Yes. Compliance is absolutely important. You have to do that. Right. And if you don’t do that, you get in trouble. And frankly, it’s really hard to do a good job in strategic finance. If all of your accounting is messed up. So like there’s a lot of good reasons to do this. Right. Uh, but the way I think the functional can differentiate itself, the way successful companies differentiate themselves. is when they use the function of the toolkit to be a bridge, to be between departments, to be the connective tissue between what is the investor narrative, how are we pitching, and where 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.

Rohit Agarwal: Very cool. Makes a ton of sense. When you started out, you said, the next step was for you to be a CFO. Whether it’s in Valley, US broadly or globally, certainly there is a certain kind of validation that comes along with having been there, done that. Why did you think about taking the sleep before becoming like getting that title, official title of a CFO at, let’s say a growth firm, and then maybe three, four, five years later doing abacus and pencil versus doing it right away.

Mika Kasumov: it’s certainly a trade-off and I’ve thought about it. I’ll be transparent with you. I thought about doing this three, four years ago for the first time and the time wasn’t right. I felt that I didn’t necessarily have the right set of skill sets, the right set of frankly network, the right way to brand myself and I wanted to get a little bit more experience. You can always stay and keep progressing the linear career path and do more. And, you know, you’ll later make the move. Yes, of course the move is going to be easier, but for me, it was a question of how much longer do I want to wait before I started working on things that really make me tick, right? And the moment when I actually saw that and I had a fantastic opportunity where effectively like I knew what my first client was going to be within the first you know, couple of weeks of going down this journey, that felt like an opportunity I couldn’t pass up. like the timing felt right. It was never going to be perfect. It’s a risk, you know, being entrepreneurial is always a risk, going out on your own is always a risk. My wife is actually kind of like doing her own solopreneur thing as well. And it kind of made sense to go and put all our eggs in one risky basket and say, okay, 2023 is the year when we figure out if we can make this work.

Rohit Agarwal: Very interesting. Tell us a little more in terms of which stage of startup could benefit the most from what you are doing. If you are going and pitching, are you going seed stage, A, B, C, D, and what is the kind of value that you think you are truly delivering to them?

Mika Kasumov: maybe kind of take a step back for a second. So here’s what I’m focused on, right? I’m focused on helping leverage the finance toolkit as a way to reorient the company’s growth drivers that create focus, stack rank decisions, right? And it comes out of my own experience, like earlier in my career, where when I owned the revenue forecast, I realized that I actually had… a bird’s eye view of everything that was driving the company and the risks that are coming around the corner. And while maybe I wasn’t close enough to the execution to understand, hey, this is how this deal is gonna play out and this customer is gonna turn, I could actually zoom out and be a really good partner to the product team to help to understand what kinds of things drive the revenue. Especially when you’re building features that you’re not necessarily selling individually, but you’re trying to understand how they affect a broader platform trajectory. So. Based on that, I think there’s kind of like a set of philosophy, there’s a mindset that you can bring into a finance function. It’s a, and like, frankly, like most of my clients don’t do FP&A. Like we don’t like do real BVA. Like we just go jump straight through that and say like, let’s go figure out reduce rigid finance, right? Like it’s not, it’s not a bill. It’s not like, Hey, you need to start saying that kind of tools. Like, yes, you know, as you grow bigger, you do want FP&A cause you need people to keep kind of budgets and block. But like, you can start doing this in any stage. And it starts with abandoning this idea that some CFOs swear by being Switzerland. This idea of like, oh, I’m neutral, which means I sell arms to both parties or whatever. If you have an opinion, if the data says one thing, go out and state it. Don’t try to be this artificially balanced and playing play both sides. And if you’re wrong, admit it that you’re wrong. Be open to feedback, of course. Because there’s only so much we can learn. data versus customer stories and whatnot. But I think that’s the mindset you have to bring into the finance function. And there’s definitely a stage when it’s too early, I’ll tell you that, right? Like when you only have two dozen customers, right? And you know them all by name, like you don’t need this, right? Like as a founder, you know exactly where you need to go. And frankly, you’re at the very early stage of figuring out your product market fit, your figuring out your vision. But I think the point where you have the initial product market fit. you’re trying to understand how that product market fit can evolve towards your vision. You’re gonna in financial or in equity terms, that’s usually around the point where maybe you’ve already raised or you have a clear path to raising your Series B, right? Up until the point where you figured out the engine and you just need to go and just like put more wood into the fire, like, and you know, you start focusing on compliance and IPO prep and whatnot. And typically, you know, that’s the point where you cross. million bucks in ARR. That’s the range where I think this mindset is crucial. That’s where the range where this finance as a growth driver mindset can actually act as a way to differentiate yourself against competitors.

Defining the modern CFO#

Rohit Agarwal: Mika, makes a ton of sense. Let’s unpack a little in terms of what are your views on the role of a modern CFO. If you were to create an ideal profile of a modern CFO, what else should a modern CFO do for its company?

Mika Kasumov: CFOs are very different. They typically come across like three different tracks, right? They come either across an accounting track and they’re more compliance and kind of process oriented CFO. They come up through some kind of like operator F&A role and they’re more like deep, deep business partner on CFO or they come through a banking investor type route and they’re more of a deal making, more of an externally oriented CFO, right? All three are super, super important. Very few people can do more than one really, really well. Of course, to be a CFO, you need to be able to wear all hats at different points in time, but there’s one you feel you’re really, really strong in. To me, it comes down to like, what is the founder looking for? So that founder-CEO partnership, sorry, it’s founder-CFO partnership. is crucial for success, especially at the early stages, especially when you’re at the series B, C, D stages. That’s the opportunity for the founder to scale their impact, to have somebody who is business-oriented, who speaks the investor language, who they can put in front of their board more so than anybody else in their team. And the question is, where does the founder need help? And what kind of help are they looking for? What kind of feedback are they looking for? So the CFO’s role is to go and compliment the founder’s skill set. 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. Which functions you own within that, that frankly doesn’t matter as much. I mean, I’ve seen CFOs that own RevOps and Strategy and HR and Legal and seen CFOs who are really focused on FP&A and accounting and everything else falls outside of their purview. Ultimately, the way CFO is influenced is through the relationships they have with their peers on the executive team and the relationship they have with the founder and of course, the relationship they have with the board. So whether the functions are all up to you or not shouldn’t matter in the grand scheme of things.

Rohit Agarwal: Is- You mentioned in one of your LinkedIn posts around cognitive dissonance in this discussion around the CFO and founder relationship. Is that kind of what you really meant, what you explained around the whole?

Mika Kasumov: That’s part of it. Yeah. I mean that particular policy referring to that was a deep personal learning for me That’s actually relatively recent. It just kind of the aha moment came maybe a few months ago around the time that I posted it I Was trying to under like the backstory here is that I was trying to understand What’s the best way for me to engage with founders and what’s the best way for me to push back? Like when I see something and or you know support aid in the bet And for the longest time in my career, I struggled with that. Uh, it, you know, not every conversation went as well as I hoped it would. And sometimes I didn’t understand what I could, could have done better or differently. Uh, and the aha moment for me was when I, when I, when I realized that founders are wired up differently, right. And being a founder myself with my own kind of consulting thing, I kind of get that, that I felt that like he, to be a founder, like your success and your ability to raise the first seed round. And from that point on, onwards, is predicated on the ability to go and convince other people that everybody else is wrong and you’re right. Because statistically, 90% loss of startups will fail. So to be able to go and choose to do a startup, you need to be willing to believe in something despite all the data around it, not because of the data around it. So 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? This idea that it’s really hard for us as humans to hold to contradictory beliefs in our head. That’s a huge emotional toll, that’s a huge mental toll. So as a CFO, I think we often, or myself at least, contribute to that. by just saying, hey, here’s a bunch of data that says, this is the wrong decision. Great, I’m right. Like there’s no data that says it’s the right decision. So like, we shouldn’t do this, right? End of argument. No, it’s not, because founders don’t make decisions based on that, right? They incorporate data, but they also tell a story. They also orient themselves against the vision. And I have found that, you know, focusing on internal consistency, focusing on stories as opposed to boiling in the ocean, figuring out all the data we can get, like looking for… you know, what do we need to believe, right? While balancing that against confirmation bias, because that’s always a risk, is the art of helping founders find their way to their vision.

The tech ecosystem in flux#

Rohit Agarwal: That brings a very interesting point. As I look back, let’s say over the last four or five years, where at least across the whole tech startup ecosystem, the true focus was growth at all cost. And in some ways, CFOs also attuned their mindset around that growth at all cost kind of a proposition. I’m not saying perhaps everyone let go of the profitability meter. but certainly the knob was more towards the growth side. Now, what we have seen over the last, call it 12 to 18 months, where the funding has tightened, the inflation is rising, interest rates are rising. There are basically elements which are kind of anti-growth. Are you seeing that CFOs are struggling to change that mindset still to be able to much more… profitability oriented and have that right balance between growth and profitability or you think they’ve already made that leap and it’s kind of like Back to you know where the mindset had to be Because the founders are not going to change. It’s a temporary blip in founders’ mindset, I would imagine, that they’re saying, fine. And I’m going to take a breather. I’m going to understand that the times are not what we expected it to be. But then, fine, I’m going to go through this six months. I’m going to go through this 12 months. But I’m back again on the growth side. Is CFO mindset agile enough to tweak that through the various cycles that happens now rather too quickly?

Mika Kasumov: I don’t think so. I think if anything, and this is the adverse CFO, this is not the best CFO, the median CFO out there in the market probably thinks, oh great, I have an opportunity now to go cut all the costs, right? And that’s not really what this is, and that’s not really what the company needs. That’s not, that’s exactly how you behave when you’re a cost netter, not when you’re trying to be a growth driver. So in my mind, I think… the best CFOs out there, they acknowledge the fact that there was a little bit of a misaligned incentive here in the market, right? Not between them and the founders, but actually between investors and economic theory, for lack of a better word, right? I was talking to an economist once, this was in the context of hedge funds or whatever, and we talked about why do we use valued risk as a 5% cutoff, right? Why do we talk about, oh, what’s the worst case scenario that’s gonna happen at 5% of the time? That’s not, that’s a relatively common. worst case scenario. So why do we all plan around that like in the finance hedge fund world? And his response was kind of tongue in cheek. He was like, look, 19 years out of 20, you get paid really well. Once every 20 years, you get a new job. Not a big deal. And there’s a little bit of that going on with VC investments, right? Because ultimately, we’re still competing against the same LP, you know, hedge fund, 401k, pension fund money. When times are good, everyone’s go, go. When times are bad, you kind of have a little bit of a yo-yo effect. And the best CFOs recognize that and treat that as a feature, not as a bug. It means that you support the growth when you have the work with all to invest behind it. And in the back of your mind, you always know that when the next crisis comes, how are we gonna use that to your advantage in a way that your competitors can’t? Right? COVID, let’s take COVID for example, right? Like early 2020 when everything shut down and there were terms right and left. A lot of companies use that as an opportunity to go and upgrade the leadership team, to have the hard conversations and use a little bit of the crisis and it’s an excuse for why they need an EVP of sales or they need to change like the other product team at the expense of their engineering team and whatnot. So, but you can’t do that. in a way that’s timely and effective unless you’re already thinking about it ahead of time. And this is where I think, this is where there’s cognitive distance for CFOs, frankly, right? Like, it’s not about being agile and reacting to like where the market’s going. 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. And what we’re going through right now is, I think, similar. The best CFOs already knew where they wanted to trim costs, where they wanted to adjust the risk, and they needed the air cover to be able to do that in front of their boards, and they did that. The worst CFOs said, great, I can talk about EBITDA all day long and won’t stop talking about it. And the reality is that ship has already sailed. If you haven’t built sustainable business, simply cutting half the cost doesn’t make it sustainable. You’re just making a different kind of trade off. We’ll see where this goes. Like we’ll see how long this, you know, non-recession lasts, if you will. But my sense is that, you know, the wind has already turned and we’re orienting ourselves against growth again. We’re just asking everybody to go put in 110% to get there.

Rohit Agarwal: I love the framework around what you can do and what you want to do in the longer term and having a clear sight of that. You mentioned in one of your LinkedIn posts that you can’t shrink your way to profitability. We have talked a little bit about that, but can you unpack that a little more, especially in that context that a startup may not have an opportunity to be able to raise more money? for the next 12 months, 18 months, 24 months, and they do need to extend their runway. What else they could perhaps do to not really, shrink their workforce, but perhaps try to do some other things that can still give them that timeframe or that room to grow into a certain valuation that they are able to raise the next round.

Mika Kasumov: Well, first I’ll say like, don’t let hubris around your evaluation number get in the way of building a long-term company. And if you’re successful five years from today, no one’s going to remember if the round you took today was structured or not structured, or if he was a flat or down route or not. Like, yes, it’ll hurt in the cap table. Most ultimately, hopefully we’re all in this because we’re trying to go build towards the vision, not because we’re trying to go optimize a few points in the cap table. It’s great to be rewarded along the way, but that’s not the only reason we’re all doing this. But let’s put that aside for a second. Let’s talk about shrinking your rate of profitability and managing your burn. The biggest source of cash that most companies have is revenue. So if at this point in time today you’re doing things that put your revenue at risk, and I’m not talking about churn, I’m talking about your revenue growth, you’re actually just, you know, you’re cutting a dollar in sales to lose out on $3 in future revenue. So why, why would you do that? That’s actually cash negative, right? It looks like you’re going to go hit your current quarter, you know, your cash burn divided by even does going to hit some kind of magical number they direct to solve for, but you’re putting your biggest source of cash at risk. So that’s what I mean that you can’t shrink your weight profitability, right? That doesn’t mean you should never do terms. You should never cut costs. Like that, that’s all is important. And there’s, there are ways of doing that. There are humane and understanding and can I produce better outcomes for everybody. But you still need to be oriented towards revenue. So a lot of companies today are facing this dilemma of do we cut sales and marketing, do we cut R&D? They view R&D as their defensible mode. That might be true most of the time, but it’s also important to keep yourself honest and say am I building something that I simply can’t sell? And yes. It is maybe it is the fault of the sales team that they can’t sell it. But at the same time, if you keep building something that you can’t sell, you’re just wasting money. Uh, and you need to go and make sure the two are in balance, right? The taken approaches of we’re just going to cost sales and marketing and protect R and D because that’s important is myopic. Taking the approach of I’m going to call it R and D because that’s not going to agree, like that doesn’t bring in quarter revenue is also myopic. You have to actually, you know, if you’re adjusting the balance, you have to adjust the balance across both. then at the same time, you might find yourself investing into back office operational functions like RevOps, strategic finance, HR or IT even perhaps, because those are the things that increase productivity for the remaining staff.

What strategic finance actually is#

Rohit Agarwal: makes sense. Let’s dig into a little bit into strategic finance. Can you tell us a little about what do you mean by strategic finance and talk through maybe the emergence or the evolution of it rather, and where do you see it going and the criticality of that in today’s business environment?

Mika Kasumov: I mean, I mentioned earlier, most of my clients don’t do FP&A or BVA in the traditional sense, we skip it, right? So you’re just reaching finance. And what I mean by that is, you know, finance being oriented towards revenue, using that financial toolkit to understand how to reprob your revenue. Costs are obviously part of that equation. You want to be able to understand like where’s my sales efficiency instead of just like, what’s my pipeline? Because that’s what you have sales ops for. But Strategic finance is kind of like a relatively new phenomenon. And what I’m actually seeing is that a lot of CFOs say, I want my first non-accounting hire to be strategic finance instead of FP&A. I can go like, you know, I’m a former banker, or like, so that this is kind of different CFOs. I talk to like, I’m a former banker. I can build the model of my sleep. I’m just gonna build the budget model. We’re gonna give it to the board. Every quarter I’m gonna update myself. I don’t need my team to do that. What I actually need is somebody to go and be a good business partner to the rest of the world. Be a good business partner. the CMO, the CRO, the COO, et cetera. And that’s how that function started getting prioritized ahead of other parts of finance.

Rohit Agarwal: What all would you put under the bucket of strategic finance? Is it predominantly the planning piece? repeat. What all would you put under the bucket of strategic finance? Is it only the planning piece or there is more to it and is there a certain cadence with which CFO should think about strategic finance and is there a monthly reporting, a quarterly reporting, an yearly reporting or an analysis that makes sense under that umbrella?

Mika Kasumov: To me, strategic finance is fundamentally business partnering, right? And you have to go meet the rest of the business where it’s at. If you have a RevOps team, you partner with your RevOps team. If you don’t, you go and build those capabilities within a strategic finance org. And in the best cases, this is, of course, if you have the right kinds of trust-based relationships with the rest of your peers, and of course, your founder or CEO. Strategic finance is setting the operating case. When I’ve been in finance roles, I’ve usually driven the OKR setting process for the company. And this is where that ability to see what’s coming, like the risks are coming around the corner, the ability to go and own the company revenue forecast, understand where the big block drivers of that are on quarterly annual cadence, is where that comes into play. More so than being able to own budgets and figure out where the costs are going. So strategic finance can… can mean a lot of different things depending on what you’re talking to, but ultimately it’s the idea is that like, you’re filling the void between departments and you’re doing that by being a good best partner for each one of them.

Rohit Agarwal: Great. That brings us to a very interesting LinkedIn post that you made. I’ll read it aloud. FP&A emerged because accounting wasn’t close to the growth drivers. BizOps emerged because FP&A wasn’t close to the operations. RevOps emerged because BizOps wasn’t close to the customer. Strategic finance is emerging because RevOps isn’t close to financial priorities. Can you? put some more light on this and sort of dissect it a little more in terms of FP&A versus BizOps versus DevOps and strategic finance finally.

Mika Kasumov: of course. I mean, I see it as almost like a little bit of a pendulum swing between different teams, different departments, the idea that sometimes you need a centralized finance team or analytics team, then you need to centralize. Ultimately, it’s a situation where the grass is greener on the other side. And I think this is, again, there’s a little bit of a yo-yo effect where investors, founders, through the community give each other different advice, have given each other different advice over the years. To me, I think it keeps coming back to like, there’s a gap in the way we built companies and that gap is mindset, not job descriptions. I’ve seen FP&A roles that were effectively doing strategic finance. I’ve seen business roles that effectively are doing RevOps and I’ve seen RevOps roles that were glorified Salesforce administrators. So it’s not. It’s not about what you call the role, it’s about how you approach the role, whether you approach it with a mindset of driving growth and being a partner to the rest of the org or owning a process, owning compliance. But there’s also a little bit of a talent story here too, right, like the top talent is always chasing the next sexy title that’s gonna accelerate their career into the C-suite or VP or whatever that is that they’re solving for, right? And for the longest time, banking was the default path. for hungry, ambitious professionals coming out of top colleges. And then that changed. People started going to tech. People started going straight into hedge funds and private equity. So the talent you get in investment banking at the analyst, your analyst level took a hit. That means the pipeline for FP&A changed. And now it’s really, really hard to get a fantastic FP&A analyst. So you need to be able to attract the same talent that is now coming from private equity or… different tech job, you need to change the title. You need to change the title to be a little bit more appealing and I think that’s where BizOps came in because there was a way to go and attract former consultants into what effectively was, in my mind, a high-performing FP&A role. But it got the job done and we were able to go build some fantastic BizOps talent and now the talent that came into those roles five, seven, 10 years ago is in product leadership roles, in finance leadership roles, it’s an operator role, et cetera. But now that pipeline is dried up because as that title emerged, more and more people started copying it, saying, oh, I’m just gonna go hire a BizOps person while thinking through what they’re really looking for. And BizOps became something between a glorified chief of staff and a project manager. So, okay, well, the work still needs to get done. We still need to figure out how to drive roads. As a CRO, you need someone who’s gonna tell you. what the data says, what your customer feedback is, and how to staff your sales team to go get that. And that’s where RevOps comes in, right? We took, in fact, with sales ops role, figured out that if we give them a broader mandate to own the entire customer journey, call it RevOps, we can drive change. Then we complimented that with go to market strategy roles, right, and what you said in biz ops analysis and revenue strategy, revenue operations. But that role again is getting diluted now, right? Because you’re getting RevOps people who are glorified Salesforce administrators. So where does the work migrate next? Now it’s moving back to finance land. It’s moving into strategic finance. I’m sure that title will get diluted again. In five years, it’ll be something else if we’re calling where the work needs to get done. I don’t know what that is. And frankly, it doesn’t really matter because the work that’s driving value has not changed. It’s just the job title that has changed.

Rohit Agarwal: It’s really funny whenever you put some strategic or strategy in front of something, it just becomes more appealing to consultants and ex-bankers. Somehow that just makes sense for them.

Mika Kasumov: no, I mean, I’m guilty of the same thing, right? I’m guilty that it’s a signal, it’s a signal on your resume, it’s a signal for your next job, but ultimately, that’s not what actually helps you get the next job. It maybe gets you past the resume screen, but it’s the impact that you drove is what gets you the job, what gets you through the interview process.

Rohit Agarwal: Makes sense. Let’s talk a little about, you know, you have, again, I’m just piecing through the various LinkedIn posts that you have made. One of the ones was around product market fit. And you shared the importance of identifying challenges and providing solutions in order to achieve product market fit. And there was, you know, the reference to sort of you being a product of, you know, Abacus and pencil itself and kind of your experience. So what has been your experience so far? in terms of being marketing the brand of Mika and what are maybe some of the challenges or the triumphs that you have been able to have in finding the right product market fit.

Mika Kasumov: a decision that I keep pushing off. I thought I was gonna have to make it middle of this year when I first started, then I said, I’m gonna make it in time for Q4. Now I’m saying I’m gonna make it next year. But the decision I keep pushing off is whether Abacus & Pencil needs to be a one-man show, or it’s something where I wanna go build out a team. And there’s two ways to build out a team. We could go hire juniors, for lack of a better word, people who can own a model. or I can go and partner up with someone who is a peer but has a complimentary skill set, right? HR, RevOps, etc. And I keep pushing that decision off because, you know, the trickle of customer feedback that I’m getting right now isn’t necessarily forcing me into that decision just yet. And I think that’s like as a founder, like that’s an important thing I learned about product market fit. It’s also, so it’s about finding at the right pace, right? It’s not about You need to go figure it out, figure out your ICP and just go, go. Bombard it, market it, right? And I’ll like spend a ton of money on Google AdWords or LinkedIn ads or whatever it is you’re trying to do. Because chances are the product market fit that I would have kind of honed in on six months ago is very different from the product market fit I’m gonna hone in six months from today. Now my skillset is changing, my approach is changing, the client feedback is changing and even within the same clients that I’ve been working with for, during this time, like. the way we partner up together has changed as we built more trust, as I got to know their business better, as I got to know their team better, right? And as their team has changed and I’ve stayed part of a constant. So that’s been my personal journey. But then again, like I’m also not in a rush. I’m effectively bootstrapped, right? I’m cashflow positive from this. I’m not raising investor money. I’m not chasing a billion dollar valuation, right? Like this is for me, this is about having the kind of impact and like work-life balance that I’m looking for, not necessarily like going building something that I can sell in five to seven years. If that changes, yes, I probably would be in a little bit more of a rush, right? But I also would have a little bit more of a investor funded cash cushion to go figure it out.

Rohit Agarwal: Makes sense. Let’s talk a little about, you know, you’ve been part of multiple different startups and you have now certainly worked with multiple different startups in this kind of new role that you have. What has been your experience with technology in finance departments and how that has evolved over your career?

Mika Kasumov: Excel’s the workforce, right? It always has been, it probably never goes away. But I’ve actually been an early adopter of Google Sheets. And I think for the last five years, every model that I’ve built has been in Google Sheets. And I love the calibration capability of it, right? I love the ability to track changes, version control, like tag people and whatnot right now. There’s some limitations. But for me, they’ve been worth it because I found that while maybe you can’t build a 30,000 row model on Google Sheets, get the little just break, it is very rare that at the serious B/C stage, you actually need a 30,000 row model. If you’re pushing the capabilities of Google Sheets, you’re probably just falling for the wrong problem in the business, right? Or maybe it’s setting up, maybe you just need to have a data scientist instead of an FPNA person. So I like technology, it absolutely helps, right? And I think the collaboration piece is critical when you’re thinking through business park, right? I’ve also found that technology helps wherever you have kind of like a recurring process that just needs to run correctly 99% of the time, right? Whether it’s deal desk, contract approvals, accruals and whatnot. Like you wanna put the systems in place there that are gonna remove the paint. It’s not so much about saving time or saving costs of replacing humans with software, it’s about replacing human error with software predictability. Because when something is missecured or you have the wrong contract with maybe a provision that you’re not supposed to have based on bank covenants or whatnot, the cost of that is really, really high. But I think an emerging area where software is trying to find its fit is kind of like… planning and company wide visibility and KPI like measuring KPIs whether it’s a dashboard or an FVNA planning tool And that’s where I think the product market fit hasn’t been found yet. And part of it is because the market isn’t there Going back to going to the mindset It doesn’t matter what grade of a tool a dashboard in KPI reporting integrations planning whatever you give to somebody Who has a cost center mindset there? just not going to be able to produce the insight. Cause like none of these tools, now maybe AI will change that, but as of today, and none of these tools actually produce novel insights that help you grow the business. And if they did, well, everybody would have access to that and that can be a competitive advantage anymore. So it’s still about, you know, human creativity, humans connecting the dots. And that comes down to the kind of talent you bring in. The rest is just how you, you know, make that talent a little bit more efficient.

The first 100 days#

Rohit Agarwal: Very cool. Let’s get into a hypothetical. Let’s assume I’m joining a series B funded company as a CFO, their first CFO. What would be your advice for me for my first hundred days in that company to be able to lay a great foundation for a long term future?

Mika Kasumov: you want to do three things. And the foundation link here is actually relationship oriented, I think, right? Because ultimately, your success in the role is going to be based on not your ability to pass an audit, but you’re based on your ability to go and build partnerships, build partnering with the rest of the company. One, you want to do something that just removes a very obvious pain point. simplifying invoicing, improving collections, whatever it is, it’s often a process, it’s often gonna get back off this pain point that people struggle with usually as Series C company, 17 different people trying to figure it out, just take it over, say, hey, it’s my problem, solve it, right? You build a reputation for being someone who helps people, helps people actually simplify their lives. Two, create some kind of process so that people get used to you saying no. Not always, of course, but it’s important to actually set some boundaries and clarify that you’re here like not to Follow instructions and just do accounting but actually like figure out what are the decisions that need to be made Right and whether it’s saying no to you know The occasional expense approval or no to hire like doesn’t matter The point is like you need to show that you have authority say no and that the CEO supports that And then three, do something that actually creates a long-term value between you and CEO. Whether it’s having a conversation about what the next fundraise looks like, building a different kind of relationship with the board, updating the long-term financial model and using that to drive a pricing conversation from next quarter or hiring conversation for next year. Something that actually helps you get that CEO dialogue started. And ultimately the decision itself that comes out of it doesn’t matter as much as the fact that you guys are talking.

Rohit Agarwal: Got it. Did you ever do anything to foster that relationship on a regular basis? Is it like a weekly lunch or a dinner or any kind of specific meeting that is slotted for each week where yourself and the CEO has to come and then has to talk about those strategic matters or something else that you did to really foster on those things?

Mika Kasumov: I mean, of course you should have a one-on-one, right, with your boss. Everybody should have a weekly one-on-one with their boss and if you’re not having one, that’s a problem. How you approach the one-on-one between the CEO and the CFO can be interesting conversation. The best CFOs I’ve seen often bring in a team member into that, right? Maybe it’s a different person every time, but they know that if founders see the strength of the talent they have on their team, that he actually builds credit. They give opportunity for their team to grow. So I think that’s something that’s important to do. That means you may need to have a longer one-on-one. Maybe you have an hour where the last 30 minutes are just the two of you and the first half hour you have the option to bring somebody in. And that also creates a little bit of more of a, breaks the echo chamber for lack of a better word. Gives them the opportunity for everybody to grow, get visibility, make common decisions, and ultimately helps the rest of your team. as the rest of your finance team, get visibility into how to think as an investor, how to think as a founder, as a leader. And that makes them more impactful in their roles today, let alone grow their careers in the long run. And then of course, you should always align and realign as circumstances change, as the company grows with the founder and what kind of relationship you wanna have with the board. It’s a… Really really great signal of trust when the founder is comfortable Not being in the room or not being in the email thread when a board member reaches out to this in CFO directly It’s a big piece of trust It’s important to not abuse it to connect might be mindful what you say to check for the founder with your CEO Make sure you’re 100% aligned because there cannot be any daylight between the two of you Definitely not daylight that the board can see But that’s the relation that you want to be able to still build on your own, right? and founders always come first, boards today’s day and age are super, super founder friendly. That’s a good thing. But as a CFO, you also want to be in a position where the board member can call you and tell you like, hey, I need you to go fix this, right? Something that’s important for long-term checker in the company, but maybe not important enough to bother the founder with, right? Ultimately, like that’s how you also end up having more of a growth impact in the company instead of being cost center.

Pitching investors today#

Rohit Agarwal: Makes sense. I love the point around visibility and credibility. Gives a lot of comfort to the CEO as well as the CFO at the same time. Makes sense. Let’s dig into… Uh… sorry. Lost my mind. Um… You mentioned investors. I want to talk about, is there, what I want to talk about, what are the qualities of let’s say a series B funded company that investors are looking for to fund further in series C, series D and so on. Is there a set of characteristics that makes a lot of sense right now? And- perhaps are also hard to find.

Mika Kasumov: I mean, it’s simple to say it is efficient growth, right? You know, the metrics, the individual benchmarks that the investors look for are gonna be different based on when you’re fundraising and whatnot. Like ultimately, like at that stage, you want to show that you have product market fit. You want to show that you understand that, you know, a dollar invested into sales and marketing comes back with X dollars of revenue on Y time horizon. So. That means being able to measure sales efficiency, your CAC, LTV, etc. But more importantly also, being able to explain why it’s working and what would make it work better, faster, cheaper, etc. And then of course, you know, vision, team, talent, those things continue to matter. Like, you know, you want to have a good pitch, you… You know, the days when you could go pitch with a test slide deck that said, we’re going to go change the world and look, here’s a graph that’s up and to the right. And that’s it. Like that’s gone. Right. Um, you want to have a little bit of a story behind that. I actually explained how you’re driving it back to your customers and why that kind of impact is sustainable. Maybe one thing to maybe even add to that, right? Like if you’re actually like some practical advice, if you’re going out of pitch today, my view is that you wanna go out with a simple deck, right? That doesn’t necessarily try to answer every possible question. Every investor is gonna have a different set of questions they wanna look for in diligence. Get to the market first, get to them first, put the simple store in front of them and see if they bite. If they wanna have a second meeting, they will come back to you with a whole bunch of extra questions. But the point is that you’ll be able to answer them in context. Because oftentimes the way you want to answer a question two may be very different from the way you want to position the same data to answer question seven, depending on what they’re asking for. So you want to actually know the fullest question they’re asking before trying to go build out like a single deck that addresses every possible scenario. So a simple deck that talks about your vision, your team, your metrics, your path to efficient growth, your… like exit scenarios, like that’s what you need. You don’t, it’s still 10 to 15 slides, where I’m not saying you need to go build a long deck, but it’s one level deeper than what I think you would have shared in the past.

Rohit Agarwal: Got it. Super cool. Let’s talk a little about kind of your motivations, your energy. What keeps you going?

Mika Kasumov: seeing my clients achieve customer outcomes for their customers. It’s the same what kept me going in full-time roles, right? Like, except now I just get to do it three times more often because I have three sets of, you know, end customers of clients. When ultimately we’re pursuing these startups, we founders, employees, consultants, wherever, because we believe that they’re gonna go and improve other people’s lives, whether it’s consumers directly or indirectly, or employees of other companies in the case of B2B, you’re making somebody’s life easier. You’re producing a better outcome, you’re producing impact. So it all comes back down to that. The same way the macro economy runs on consumers. startups run based on improving outcomes for the end customer. So for me, that’s what keeps me going. It’s really hard to go work with or for a company, it doesn’t matter what it’s a full-time or a consulting role, where you think they’re not doing the right thing, where you think they’re whether the middle manager, not middle manager, intermediary rent collector, or they’re… preying on risk. They’re one of my clients in healthcare, right? And they’re changing the way companies get staffed, like hospitals get staffed and ultimately produce better patient outcomes. But there are also a lot of companies in healthcare that specialize in exploiting the system. So it’s not even about the industry, it’s about the business model you wanna actually go after. It’s important to believe in the kinds of outcomes you’re driving and understand that. Profitable growth also means being able to scale and have touch more and customers and consumers. And that’s motivating enough for me at least.

Rohit Agarwal: Super, how do you keep your calm? I hope nowadays in this kind of consulting role there aren’t very many shit hit the fan kind of moments but I’m sure when you were an operator those used to happen more often. How did you keep your calm back then at least?

Mika Kasumov: should hit the fan. Doesn’t matter what role you’re in. When you’re in an outside party, often you’re also overflow capacity, right? You’re like, oh shit, we’re having this meeting tomorrow and I just need a quick sanity check to make sure like last minute I just got the deck done. Can you make sure this investor pitch makes sense, right? So that still happens, right? You won’t be available. I think it, but it doesn’t, at the end of the day, like it’s a question of, We’ve been there, we’ve been through this before. We’re gonna get to the other side, knowing that there’ll always be another side and the world’s not blowing up. And focus on what you can action and don’t worry about the things that you can’t action.

Rohit Agarwal: All right. Last question before we move into the lightning round. What would be your advice for emerging professionals who want to grow up the ladder, climb up the ladder of finance and become sort of leaders in finance, CFOs, etc.?

Mika Kasumov: I have a very conflicted relationship with remote work. I’m a personal fan of it for myself. I like being able to work out of my house. And I’ve gotten to the point in my career where I’m able to go and maintain relationships with a relatively light and frequent touch. I think early on in my career, remote work would have actually hindered me. And I think it has a risk of hindering. people are in the course today as well, right? If I was managing, if I were managing a junior team right now, it’d be really hard for me to mentor them, unless I was sitting right next to them. Cause a lot of this happens in hallway conversations, real-time feedback as you walk out of the meeting, looking over somebody’s shoulder and noticing they’ve spent like the last 20 minutes in the same Excel spreadsheet and being like, hey, you can automate that with a formula, right? Simple things like that. ultimately matter when you’re early in your career. So I think if you are just starting out in a career in your first like in a couple of years, you’re even a couple of years out of business school, I’d say, think long and hard about your attitude to your work, right? There is a trade-off, there is a cost. Now there are huge benefits to it as well. Now not having the distraction of people coming and tapping your shoulder. is the flip side of people coming and tapping your shoulder and saying, you can write that formula a little bit better, I just saw it over your shoulder. Make that call, figure out what’s right for you, and be open to changing.