The Eliminator CFO

Arjun Mehta: So, you know, as you know, our generation, 20, 22 years of work X, we typically have a homogeneous childhood. So I grew up in a small town, you know, father was in a transferable job, PSU background. So I spent a large part of my life in Chandigarh, Punjab, towns of Punjab and Haryana, humble beginnings and then went on to graduate from SRCC Delhi University. And Back in the days, you know, when you’re an undergrad, whether engineering or, or mostly commerce students, the choice you’re met with is write the cat or do your CA. I mean, the more obvious choices. So I went on to get into CA because the big four back in the days, they were the big six with Coopers and Vibrant and, and one more. And they used to come on campus and, you know, attended the PPT, you know, got through. did my articles at KPMG, great reading ground, great learning, great exposure. But the irony of it was that just when I cleared my finals, I said, hey, I can’t be doing auditing, consulting, or work for a big four for the rest of my life. Very personal choice, I think the exposure and the learnings are great. So that’s when I decided to get an MBA and went to ISB Hyderabad. And post my MBA, you know, worked in the corporate sector, started with a very brief stint at HT Media, followed with… 10 and a half solid years with American Express, of which about two to three years were in New York as a part of an internal consulting team with American Express, then came back and spent seven years in the Shared Services Center and the India business. In my last role with American Express, I was the CFO for the consumer card and merchant services business back in the days between 2013 to 16. Then moved on to Apple from there. So a shift in not so much in roles but industry. So spent five years with Apple, started with the commercial controller for the iPhone business, moved on to do the B2B business, which is the non-iPhone, which is predominantly MacBooks and iPads and services. Very, very different experience moving from the services to a product company. Apple was at the cusp of the trillion dollar valuation. So I’d go all the way to two, two and a half. trillion and then around COVID mid COVID I decided to move on and do something different. So I moved into a head of strategy role with Max Life Insurance. That was stint was that stint was relatively short but a little less than two years out of and then right after Max Life the offer from Revolut came along actually while I was at Max Life and Revolut being a startup and the one thing that was missing in my profile was to see the zero to one journey. So a lot of my experience was predominantly with large multinationals or large conglomerates, steady stable companies looking to expand, looking to grow, looking to optimize. But this was very, very different. Revolut setting shop in India, trying to procure licenses, trying to launch some interesting fintech products. So here I am for the last one year with Revolut as their first CFO in India. very short and sweet. Outside of work, very important. Yeah, I’ve spent a large part of my professional life in Delhi NCR. I’m in Gurgaon. I have a 13 year old son married. My wife runs a bespoke furniture business. So that’s what it’s like.

Rohit Agarwal: Very cool. Very interesting journey so far. Tell us, you’ve worked at American Express, you’ve worked at Apple, you’ve worked at Max. Again, all sort of multinationals, right? And now Revolut. What are the maybe one or two similarities between, let’s say, American Express, Apple, and Max that you have found? We’ll talk about Revolut a lot more later. And then maybe what are one or two? differences that you have found, whether it’s in culture or how they approach business at a meta level.

Arjun Mehta: So the greatest similarity across all three businesses is a maniacal focus on margins, cash flows and profitability. I think high EPS businesses, high margin businesses and even though the products and services offered are relatively different, I mean, both Max and American Express would still be financial services, credit cards, and insurance, but within that, because Max is a listed company in India, you know, and listed companies kind of need to focus on margins relatively more than others. So this whole financial discipline and that complemented with a very high culture of compliances and in a good way. And you know, just having a good corporate fabric in doing the right thing, I think, which comes from the top, from the leadership. And that’s the other theme across these companies on the quality of leadership and doing the right thing. That is the largest similarity I saw across all three. Of course, the how of it would vary across three. So that is top of my mind, greatest similarity. Of course, needless to say, I mean, American Express is a company being around for 160 plus years. Max has been in India for… more than two decades, Apple again is a three and a half old, decade old company. So, with that, you know, needless to say, high on processes, SOPs, you know, and a functioning enterprise, some of the things you take for granted when you’re working for relatively younger companies and startups. So, that’s also a similarity. On the differences, I think you were right in saying it’s mostly cultural, it’s people that make a company and the way they operate. The… styles of functioning right from what you wear to work, to, you know, how, what the coffee chatter is about, or what people like to do outside of work as they engage with each other. I think that was different. Obviously there are other industry nuances. I mean, insurance in India being relatively… I’m not using the word commoditized, but homogeneous product because it’s easy to replicate. The game and the fight becomes distribution. But both American Express and Apple had kind of carved a niche of their own and had a very, very specific loyal clientele. So there it was about moving up the value chain and how to preserve that uniqueness or that… that excitement for the customers is what the focus was on. Because technically while there was competition, but the competition was not on the main turf. The competition was in segments, territories, or businesses you would ideally like to get into for growth considerations. So that one was one of the obvious differences. But the largest, as I said, was people, right? I mean, and that adjustment takes about two, three months as you get there and say, oh, okay, this is how it works. And this is what this. this say here and of course the acronyms that come with it.

Rohit Agarwal: Make sense. Double clicking on the cultural aspect a little more. Again, all of these are global companies. How are they permeating the global culture to the India units? And how, I’m sure the India units would have some of their own culture as well, right? As we found not only at a country level, even… A company operating in a single country may have different cultures within different functions. So I’m sure each of these companies would have a different India culture as well. How some of that rubs back onto the global enterprise. How does that mishmash of cultures and mishmash of just the, I guess, the transporting of ideas really happen. in this at this global scale.

Arjun Mehta: So, you know, the second part of your question first, because it’s easier to answer, the rub off of Indian culture and global, that impact is limited. Because the companies I’ve worked at while they were large enough in India, reasonable scale, but they were still a fraction of what the size of the global companies are. The part where the impact happens is all of these companies have large offshore centers. I’ve always worked in the revenue center of the business. So those offshore centers will help drive a lot of optimization, expansion, and kind of India becoming the talent pool. And there are those nuances, but I think all of those adjustments more are done at the market level as opposed to the global level. But It’s, you’re right. It’s a, it’s a bit of a hybrid. It’s a 60, 40 or a 50, 50. And if I had to structure this, uh, in terms of articulation, I think when it comes to business and operations. So the what and the why, and again, the, the overall strategy and philosophy that’s kind of trickling down from the global, because, uh, I think, uh, in terms of risk appetite, it’s limited for larger companies. They want to always go down from the top of the pyramid, kind of establish their presence in the premium market, see some cash flows coming in because of the profitability concentrations, and then say how we can win in the pre-affluent and the mass segment. And not everybody gets it right. So on business operations, it’s limited, the whole shareholder and customer aspect. The large difference is employee. how people function and there’s this famous lines which says, oh, India is different, right? I mean, I think we say that at least 20 times a week and we’ve been saying it for the last two decades explaining it to investors and global leadership and the media that India is different and India is different. So to that extent, I think the rope or the slack that the global companies need to cut India, actually, 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, et cetera, even tiered distribution because India being a fragmented market and consumer segment densities are not the same as large markets, 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. And this is not just the companies I worked at. This is across the board. I think if you look at case studies of companies that really made it big for India and became globally relevant, whether it was Nestle or it was HUL or it was And to a certain degree, even now, Apple is one of them, right? Apple’s been doubling market size every three years, doubling their revenues every three years. I don’t know. I might be off because I left Apple about three years ago, but you can see the penetration of the ecosystem across the board. So, so yeah, that’s, that’s what I think.

Rohit Agarwal: When you think about these global companies coming to India, especially now, where India is very vibrant and you are going through one of that zero to one journey from an India perspective right now for Revolut, are there any specific traits that you have identified for the companies who have made it big in India, which says, hey, these are maybe two or three traits that are common across all of these that has helped them to really win the market?

Arjun Mehta: Patience, deep pockets and speed to market in that order. So patience because I call it the tuition fee. You’ve got to spend money, do some small little experiments and pilots, get some quick learnings because 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 so at a point in time it’s very difficult to define but that’s why I said patience and deep pockets because the expectation setting that needs to be done with whoever is willing to cut the check or invest the money is that it takes time. And the analogy is the microwave versus the barbecue, right? Like, if you’re hungry, you’ll always prefer the microwave. You would heat your rolls or pizza or whatever else meat, if you’re a non-vegetarian, in the microwave and kind of you’re done. But if you want your meat to taste good and you want it juicy, then it needs to kind of simmer and slow burn on the barbecue. Sorry, I’m taking a non-vegetarian example, but that’s what it is, right? So in India, you’ve got to kind of let it simmer, get your learnings, have the right condiments, test in the right segments, customize a little. You can’t just pick the global product and kind of bring it in, especially in case of services. A product is a product, right? So if it’s a tech company, it’s different. And then kind of take it from there. And if you’re able to… get an understanding of that, then the 0 to 1, 0 to 2 is very challenging and painful, but then the 2 to 5 and 2 to 10 is kind of where the fun starts. And, you know, a lot of companies are experiencing that now are the ones who probably took a longer term view and kind of stuck it in.

Rohit Agarwal: Very cool. Very interesting. Let’s move the focus back to one of the switches that you made. You said you joined Max as the head of strategy. Tell us about that. What was going on in your head to say, hey, now I’m going to move away from pure finance to more of a strategy role?

Arjun Mehta: So it was actually a function of what I was undergoing as I was thinking about the next five, 10 years of my career. I mean, I reflected on my trajectory and I realized this is very homogeneous, right? It’s similar kind of companies and similar kind of roles, even though the industry was different. Uh, learning was good. Uh, you know, you were getting rewarded along the way, the rule was expanding, et cetera, but, but it was one of those things where, you know, the, the switch goes on and, you know, get on the other side of 40 and you say, okay, now, what can I do differently now? I can’t suddenly completely change all the things about me, but at least you can challenge yourself to take a role, um, in a different role. And for me, the change of role and industry happened together.

Rohit Agarwal: professional midlife crisis hits.

Arjun Mehta: So that’s what propelled me into the role. And the other thing was Rohit, till such time I was with both Apple and American Express, the window and the opportunity to move abroad in another market or HQ role was always there, but around COVID for some personal reasons, I kind of made up my mind that I want to be in India and we’d seen that we were witnessing strong tailwinds for a while and I was kind of, if I had to make a bet for the next decade, I thought it has to be in India. And that kind of triggered the move to say, okay, if in India, then I need to kind of diversify my profile because the one obvious thing that was kind of missing or something I hadn’t done in my previous roles was investor relations and kind of having worked for a listed company. Right. And then there is the whole bit of prejudice, etc. that comes with it. So invest. So at max, I didn’t get the exposure of both, you know, working for a listed company. And as a head of business strategy, there was a lot of you know, shareholder and board governance and investor relations interface. And I thought those were the things I’d like to experience. And so that’s how kind of it enriched. So it was expanding your thinking and profile horizontally and also kind of culturally, it was a very, very different and enriching experience to go from a high cash rich, you know, unique product company to… a company that has to go out there and fight and win in the marketplace every day and do it very, very well.

Joining Revolut India#

Rohit Agarwal: so then from Max, you move to Revolut to again, set up the basically India operations and now hopefully soon launch the products in the market.

Arjun Mehta: That is correct. That is correct. So this is a very different experience of setting up a team right from the basics of the accounting systems. Of course, it being a multinational company and globally Revolutes not a startup because they’re valued at 30 billion the revenues are in excess of a billion dollars and it’s a Reasonably profitable product line. So, so while globally it’s an MNC in India. It’s a startup and it competes with some of the very ferocious startups in the fintech industry, which is, you know, how the funding environment has been and competition these days is driven by how much funding the sector is attracting. Right. So, so, so I thought even though the opportunity came a little premature and I would have liked to spend a little more time at a max, you don’t control some of these things. And that’s what kind of propelled the move. So, so the experience has been very, very different from right from setting up things and Defining basic governance and hiring the team and proofreading contracts for the first time and all of those things. So of course testing the product out and doing surveys etc. It’s very well rounded.

Rohit Agarwal: Maybe do you want to take 30 seconds to introduce Revolut to everyone of our listeners?

Arjun Mehta: So Revolut globally is a financial services company with the vision of having all things finance in one app. And the layering of the financial services is payments, both domestic and international, followed by credit products, followed by insurance. And globally there is also trading products for US equity, domestic, and then crypto. And India obviously is the way vision also is to kind of introduce financial services products in a tiered structure You know we don’t plan to launch in the first six to eight months in the next six to eight months Our first suite of products followed by you know, there is a three-year plan and then You know go about it

Defining the modern CFO#

Rohit Agarwal: Super exciting. Again, congratulations on the, I would say rather bold move. And certainly looking forward to what Revolut brings to India. Let’s dive into the modern CFO a little bit. I’m sure over your career, you have worked with multiple CEOs, have seen multiple CEOs across the globe. Tell us how maybe that role has changed over time and how do you define a modern CFO today?

Arjun Mehta: So that’s an important question that I get asked. And if you look at the frameworks, typically there are those four pillars for a CFO role, which are the strategist, the catalyst, the steward and the operator, right? And I like to, frameworks and terminology aside, I very simplistically take it as three pillars, which the shareholder, which the… CFO needs to address the shareholder pillar, the customer pillar and the employee pillar. So, you know, on the shareholder side, it is more strategy and catalyst and focused where, you know, you try to balance growth with profitability and, you know, kind of challenge the leadership team to kind of do the same things with greater efficiency, you, you know, be different and, you know, cut the clutter, etc. On the customer side, there is this whole product and services angle to say, what are you solving for and why are we doing this? What’s the problem statement and how do I get to addressing that problem statement through the action of mine, this action of mine, this product of mine, this service of mine. And then for me personally, the most important component from a CFO standpoint is the whole employee or the creative community bit where how are you… It starts with your team. And then it goes on to expand to the greater organization that how are you improving their productivity and their efficiency and how are you facilitating what they’re doing? Because let’s face it, the leadership team doesn’t do things. They get things done and they’re supposed to be the guideposts or kind of like the Google Maps to say, this is where you need to go and this is, I think you should take this route and by the way, take this vehicle versus this vehicle. So So the employee one I continue to hop a lot about because there is so much in the modern day organization, there is just so much clutter and so much work to be done. And I was just, day before yesterday, reading an economist article around saying that the best leaders are the ones who subtract work. And a lot of what was written in that article resonated with the way I like to go about my day because. Every time I take up a new role or every six months, eight months, I like to do a dipstick of getting a view of how my teams or the broader org are spending their time. What is the percentage of time they’re spending in meetings? What are their deliverables? Are they doing recurring MISs? Are they attending meetings that have been on their calendar forever? Are they just doing stuff out of virtue of legacy? And how can I subtract that work? And that’s the, in every new role, I try to do this when I go out. Interact with the team and tell them, okay, if I were to tell you, you have to cut down 20% of your work or you have only 20% less time to get the work done that you have. What are the things you will not do? What are the things you will drop? So call it based elimination, call it subtraction, call it prioritizing. So me, the greatest job of a modern day CF or CXO is to help the organization and people prioritize their jobs. So. Rather than doing. 100% of the tasks with 75, 80% accuracy to 70% of the tasks, but do them 100% well, not with accuracy, because sometimes great can be the enemy of good. So depending on the criticality of the task, you take a call if I can live with 90, 95% accuracy or does it have to be 100, but it’s very important to help your teams prioritize because 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, 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 hours of work, but I don’t have much to show up for it. And for me, that is the reflection of how effective I am as a leader. So long answer to the short question of the modern day CFO role, but that to me is a very, very important part. Of course. This is the employee element, but once that takes care of your bread and butter, then it’s the jam to come up with ideas and innovations and smarter way of achieving the company objectives, the CEO priorities, etc. You know, addressing what’s keeping them awake at night. And it’s not a good thing for your CEO to be awake at night, but what are the problems they want you to solve? I honestly think that’s easier because that kind of at a leadership level, you can brainstorm, you can look at best practices, you can kind of make some bets and take some risks. The people element is the one which is harder and which needs to be done consistently. In terms of the other part of your question on how the role has evolved over 15 years. For me, the role is always evolving Rohit because every company at, whether it was 10 years ago, 15 or now, has a very different needs and priorities at that point in time. So an accomplished being around company like an Apple or an American Express will expect very different things from their CFO versus a series B series C funded startup of that matter, a domestic company, which is competing in a relatively cluttered space. You know, so, so the, the company, which is more competition has, has to have the CFO overindex on the operator role and the firefighter role more to make sure the books compliance is all of that is tight and at the same time, you know, there is enough fuel. that has been provided to the sales force to kind of deliver on the numbers. It’s a bit of an upward uphill climb. Whereas the companies which have the luxury of cash flow have been around for a while and are relatively stable have to go kind of progress on the path of, how do I continue to stay relevant and innovate? So very different. In 15, in the last 15 years, I think the CFOs are expected to collapse the boundaries and look beyond financial statements, reporting data, compliances to kind of become the, uh, the proxy CXO. So, you know, it’s, it’s kind of, there is COO there is, and the, and the mirror reflection of that is the CFO for me on the, on the numbers side, you know, uh, because that’s one way you quantify the actions, but the only way you can quantify the actions is to know what the actions. mean and what they’re translating into. So yeah, that’s what I think.

Rohit Agarwal: Very cool. I specifically love that whole ideology around, you know, your workday is not just eight hours, but then a consolidation of everyone kind of reporting under you, however many number of hours that they have in their workday. I think makes a ton of sense. As you touched upon efficiency, productivity. Of course, technology plays a large role in terms of bringing in certain kind of productivity and efficiency in the workforce. Do you have specific thoughts on how do you like to play technology in your teams? And we hear a lot of now chatter around AI and what it can do around workforce productivity. How do you think about that going forward maybe in the next five years?

Arjun Mehta: I think it’s still nascent and we all know what it can do. To what extent we are leveraging it, I think I don’t have a straight answer. People are leveraging it in very fragmented ways and kind of getting excited about it, right? If you want to write a report or a content or you want your presentation to look smarter and crisper, all of that is very, very basic. So I don’t have… convincing or my own view on AI, it’s very conflicted, but on technology, of course, for financial folks, the real pain points are around managing data, around removing redundancies through automation, and just how to process the transaction volume efficiently, which results in reducing turnaround times or simplifying things for them. So, So those are my top of mind ways in which kind of I’m always pushing the teams to, to figure out how tech can enable some of those things, uh, through either automated tools or solutions that are out there in the market. And then also, uh, work with the CTOs to kind of pick their brains on, uh, how this can be facilitated. The only challenge there is, and now I wear the CFO lens or a head of finance or a controller lens when you interact with CTOs is that they’re kind of more focused on solving things higher up in the value chain, right? So, so if you, in simple English, if you think of the kind of projects the CTOs work on without fancy words, it’s, the way I see it is there is run. There is transform and there is grow. And what I’m talking about is more around run, you know, uh, because the pain points, uh, of my team lie in their day to day work, they’re not interested in what can happen in a year’s time or two years there, but they’re more interested in what are you going to do to make my life easier next week? So that’s more run, you know, but the CTOs are focused on transform and grow. So some of these things, you know, you’ve got to kind of do. in-house self-service, some of these you need to push with the tech teams to create a larger interesting enterprise-wide impact. So that’s how I go about thinking about it in terms of tech. You know, one thing I wish for, or if you have to ask me like what is your magic wish, would be a single source of truth. One integrated platform or database. where everybody can get their information needs. And I know ERPs exist, but that single source of truth becomes very challenging when you’re looking at downstream metrics and data and information along different parts of the customer journey or value chain. That’s where the offline MIS is through emails or WhatsApp groups or whatever else comes in and doesn’t tie to… the company systems and a lot of people spend a lot of time reconciling that. That falls in my category of waste. We have to find a way to eliminate that effort.

Building the finance team#

Rohit Agarwal: Very cool. Let’s talk a little more about the people side of things. You have formed a team at Revolut, and I’m sure continuously bolstering it and will continue to bolster it as the product comes to market. For global companies, so it’s a two-part question again. Maybe one, if you have any tips around building a finance team from ground up. And there may be SOPs, technologies that are already set up that you anyways are going to grandfather from the global enterprise to the local offices. Do you hire for the technologies and the SOPs that are already established and people who can basically fit in that puzzle piece or do you hire the best minds and then say, hey, is this… SOP, is this technology going to be relevant for India? And does it work? Or I’m going to have a unique customization or a difference in the SOP or the technology that I’m going to use. But I have the best mind that I can get at my disposal at the moment.

Arjun Mehta: It’s not binary, Rohit. It’s the simple answer is it’s a mix of both, a respect for SOP or processes, but the courage to question them when they’re not relevant. And again, speaking of India, driven by regulation, driven by the nature of the market, driven by the need for customization to appeal to the market. there will always be some degree of customization or changes that are required. So if I had to pick one, I’d pick the best trains and let them figure out what to do. In reality, it’s a mix of both. That’s the second part of your question. The first part in terms of building a team ground up, I think it’s not easy because it requires a long term thinking around how do I want my function or my team. to look like three years or say five years from now. You’re hiring for at least three years these days, if not five, preferably five. And to visualize that when there are no clear answers around how the strategy will evolve based on the responses which will come. There is a strategy. It doesn’t mean we don’t have a strategy, but you might have a strategy which will require two or three pivots in the Indian context. That’s what I know. whether it is on pricing or features or segments you go after or the timing of it and FinTech particularly has this large regulator dependency, right? So all of that needs to be factored in. So with all those unknowns, it’s difficult to visualize and envisage what my eventual team or function should look like. And then you start filling in the pieces to say, okay, I need a controller, I need a taxation person, I need a FPNA person, I need a couple of folks who can kind of be project managers and cut across boundaries with great people skills and help bring it all together and stitch it together. So, yeah, I mean, you put that on paper to say, this is what I think, and then you go and hire for… the roles you define a knock chart. But more importantly, the one principle I use is again, at a softer level. One is of course, diversity, right? Like how does this person bring in diversity to my team? And diversity is not just experience, right? Of the nature of industry, the kind of diversity also in terms of personality. And B is, is this a person I will have fun working with? You know, mathematically speaking, You take out personal time, sleep time. If you take the sleep and the personal maintenance, hygiene time out, it’s about eight, nine hours a day. You’re left with what, 15? And on average, you spend seven to eight, sometimes up to 10 hours at a workplace or in the hybrid environment on the screen. Now, technically you’re spending 55, 60%, maybe more of your awake time with work colleagues, right? And everything else aside, you need to be having fun and feeling good about it. So at a softer, at a softer level, at least when I personally interview people, my lens, the last 10 minutes of the conversation, if, if I feel that this conversation is getting somewhere is to get to know them personally, or understand what their motivations are outside of work, how they unwind, you know, what kind of content or activities they enjoy to, to just try to figure. if this is someone that I would like to interact with more often. They don’t have to be like me, you know. It doesn’t have to be the same things, but it’s got to be something that kind of, that brings value to the team and their peers.

Rohit Agarwal: one more on the people side. Do you overemphasize on strengthening the strengths or do you go and say, hey, let’s kind of fill in the hole of the weakness a little bit more, which if.

Arjun Mehta: No, always the strengths, always the strengths. No, no, no two ways about it. The return on effort is far greater. That’s the philosophy. And in a team, I have to look at my team’s strengths. So I might not have two of the people in my team might not be extremely articulate or, or might not have great people skills, but, but if they’re filling in the gap for analytics and

Rohit Agarwal: All right.

Arjun Mehta: running a tight shop and hygiene and compliances, then there would be somebody else who can fill in the gap for articulation. So always the strengths. Personally, for myself also, I take that principle. I mean, tricketing parlance, you play at a Perth or a Johannesburg, you’re gonna go in with four paces, right? You pay on some of the Indian tracks, you’re gonna bring in three spinners, right? So you’re not gonna say that, no, no. play my fast bowlers on a flat tracker, right? So it’s the same thing.

The first 100 days#

Rohit Agarwal: Well, we’ll see about that in the World Cup. India may play three Seamers. All right, so let’s move on to maybe a hypothetical. Let’s assume I’m joining as the CFO and this is my day one at this company. How would you advise me on my next sort of 100 days plan?

Arjun Mehta: Uh… There’s a laundry list. So there are some basic ingredients that should always be there and then there’s the hundred day plan, but the basic ingredients kind of need to be open indexed. I think when you join, it starts with being curious about everything and asking questions, which kind of is the proxy for questioning the status quo. I love doing that. I’m that way a little anti-establishment in my head to say. and never accept an answer that this is how it’s done or how it has been. You need to understand the why of it. It starts with that and then again invest in relationships and understanding people and their problems, professional problems, functional problems because end of the day you might have a point of view or you might bring in something from your previous work experiences that can help them solve that. So the kind of people first lens and then… Try to complement it with your understanding, knowledge, analytics, whatever you bring in. There is the basic hygiene, which I think the orientation from the company should take care of, which is understanding the company, the products, services, organization chart, et cetera. Transparent conversations with your peer group and stakeholders, in my case, that would be CEO and the leadership team to understand. What are the problems they have? What are the priorities they’re chasing, et cetera, and kind of sync my action plan with that. As a finance person, specifically, the two things that I tell finance folks repeatedly is to spend a lot of time on the field, understanding the customer journeys, understanding how the products or services are sold, maybe listening to some customer calls to understand what kind of queries are coming back in. experience the supply chain. And this is very important because, you know, finance folks kind of tend to get lost in the day-to-day desk jobs and the real insights and understanding of the nuts and bolts of the business comes from being out there. I mean, and, and this is a common thing I’ve experienced in my younger years. And even now I learn more from two hours of a call listening session or a branch visit where I go talk to the, uh, the people on the ground or the sales folks or the servicing folks. You know, the learning there is far more enriched than, you know, the MIS and the data that you look at consistently because that’s more authentic and that kind of gives you other ideas. Going back to the original theme of a new CFO, the whole concept of subtraction, I’m sorry, I can’t over emphasize that a lot. I try to understand what can I take off people’s tables, which they consider unproductive and which I also think is unproductive. That’s one way of building credibility. That’s one way of driving prioritization and people will love you for it. And I’m gonna bring in a Peter Drucker quote here. Peter Drucker is one of his most famous quotes. There is surely nothing quite so useless as doing with great efficiency something that should not be done at all. And that is something I live by. That’s one of my favorite quotes. There’s no point going down a path that is not worth doing at all. He articulated it really well. So kind of bring that in my philosophy. And then of course, at a more. Organizational KPI level, you’ve got to identify two, three goals and wins for yourself, which are personal. It could be on the business side, number side, product operations, processes, you know, again, cricketing parlance kind of gets some runs on the board in the first quarter, kind of to build credibility and respect for.

Rohit Agarwal: How important for you to get that early win? And how should people think about that? Is it like, you know, solve for the low hanging fruit? Is it maybe do something a little more on the pricing? What is it that people look for to get that early win?

Arjun Mehta: Uh, the wind doesn’t have to be for me, Rohit. The wind needs to be for either a business partner, stakeholder or the team. It’s like, how do you make yourself useful? Cause, cause believe it or not, a lot of leadership roles are aggregation roles, right? I am not carrying my own day-to-day deliverable. I might carry my own big deliverable of preparing a licensing app. Okay. raising funds, identify an M&A target, re-engineer the treasury or the debt costs, etc. So those are larger deliverables and not all of those will typically not happen in a quarter. But the way I visualize this at a grassroot level is there’s a warm body, there’s a new person coming in who’s considered to be relatively senior. Rather than being a hindrance to other people’s work where you ask a lot of questions and then create work for them and they feel, Oh my God, I already had to do 10 things. Now I have to do this too. Now he has asked for it too. It’s you understand that how can I make your life easier? How can I help you accomplish what you’re doing? The underlying assumption being what you’re doing is critical to the company, right? Otherwise you shouldn’t be doing it again. Subtraction, you know, waste elimination. So, so that’s the lens you try to wear. I mean, Obviously nobody’s bonded that way. I’m not perfect. I’m on that path. But once you start doing that kind of, you start meeting and experiencing a lot of yeses and a lot of sponsorship from, from ground up or your peer group, as opposed to, uh, you know, opposition thinking, yeah, I’ll be a finance. Well, yeah, you know, he’s going to ask me for new data, new information. He’s going to question what I’m doing. All of that. Right. So yeah, that’s that.

Angel investing and today’s funding climate#

Rohit Agarwal: Vyco, let’s change gears a little bit. When we were talking earlier, you said you do angel investing as well. We are living in a pretty interesting timeframe from a funding perspective. Would love to get your views on that broadly. And when you do angel investing, maybe some of the traits that you look for in companies while investing, what makes a good investment for you.

Arjun Mehta: So Rohit, most of my angel investing portfolio is the high risk capital, which is early seed or first angel round. I wouldn’t go in through typically if it’s more than 70, 80 mil in valuation, I prefer not to go in. At that stage, it’s more about as cliché as it may sound about the founder than the business. So in some ways when you’re going after small companies, it’s more of an idea and a concept and it’s all about execution, right? That’s what we learn through successful companies. I like to look for specific traits and qualities in founders. Of course, there needs to be a business model proven to some extent with some unit economics and some cash flows. I mean, I would not invest in a paper company, but speaking of… traits on the founders, there are cues that I pick up. I like to hear about the more thoughts around what they wanna do in the next one or two years. That’s one. I don’t wanna be here hearing five years, Unicorn, six years, IPO. That’s a red flag for me, that’s one. I like to see points of failures in the founders journey. And when you’re looking for companies, that’s small. You have the luxury of spending some in-person time with the founders. And I think 80% of the companies I’ve invested in, I have personally met the founder and spent like time with them, maybe two meetings. So points of failure still tells me there is grit and it tells me this person will not give up early, right? So do whatever it takes kind of a thing. And then I also try to look for the understanding. their understanding of a going concern, running business versus a company valued at X. I pick on the cues of what their language is. Is there language around revenues? Is there language around margins? Is there language around bootstrapping around building a sustainable business? Or is there language around we’re gonna deploy this money in this. You know the spiel, right? Customer acquisition, cash burn, runway for 18 months, next round of funding, go to 18 cities. I’m sorry I’m using a sarcastic tone, but that again is a red flag for me. So those are some of the filters I personally like to apply. I’m relatively industry agnostic. It doesn’t have to be a tech business, you know, and then… And then again, depending on what I think about the founder, I go ahead with it.

Rohit Agarwal: Very cool. And any comments on the current funding environment? Where do you see maybe silver linings or major, major red flags?

Arjun Mehta: I think we’ve had a muted year in terms of the funding environment, but then for investors, it’s kind of a blessing, right? For investors like me who are not cutting very big checks, right? You are able to kind of get better valuations, right? And again, if you’re taking a slightly longish term view of the business and your focus is let this person become a bit positive or generate some favorable cash flows. at the back of favorable unit economics and not just cash burn, then I think it’s a great time to be out there. There is, I think, immense opportunity. And I am obviously more a fan of D2C businesses, but the challenge is they consume massive amounts of capital. But I continue to be positive. or what they say in stock market parlance, cautiously optimistic on the startup. Also, if you see globally, it’s also so many funds, whether Temasek or even in Japan, they’re beginning to commit capitals over the next two, three years to India. Now that is going to translate into both employment and business opportunities and bring in some more risk capital to kind of do new things, be creative and innovative. So I’m quite convinced. And what will happen over the last, what’s happened in the last two, three years will bring some semblance into the valuations as well. Will hopefully bring in a culture of all that I’m talking about because over time the VC community and the private equity folks have, they were always very smart, have become even smarter to kind of look at the right things and maybe they looked at the right things but the challenge was on corporate governance and compliances. So I think they will start coming in early on. I don’t wanna name the companies, but whether in the FinTech or the EdTech space, some of the poster boys aren’t getting great media for the commitments they’ve made and the lack of compliances, et cetera. So all of that is a good correcting mechanism for the industry to continue to prosper. I mean… Face it or not, 70% of the opportunities, leadership, mid-level, entry-level, blue collar jobs have been in the startup ecosystem. So we need to continue to create an environment to support that and let it prosper.

Career reflections#

Rohit Agarwal: Very cool. Makes a ton of sense. Let’s maybe change gears a little bit. Tell us what, how would you define a successful career for yourself?

Arjun Mehta: a successful career. It’s again, it’s not a point in time. Uh, Rohit, it’s, it’s. I think it’s two things top of my mind as I think hard. One is, am I pushing the boundaries and doing justice to my potential? So that’s one. There is a book by David Goggins called, Can’t Hurt Me, in which he talks about mental toughness and how you can push your physical boundaries to achieve what is the unthinkable. He’s done some great things in life, but that’s more on the… athletics, the physical fitness that can translate into careers as well. If you have the mental toughness and willing to put on the effort, whatever is required. And so, so one is that human potential is infinite, but am I even getting close to pushing myself enough? That for me is the first parameter of success. And for me, it’s a very big one because I’m, I’m fundamentally at my very goal, very, very comfortable. So that’s one. The second is, am I getting enough diversity into my experiences? So am I doing the same work 10 years over or am I doing three different, four different things over the last 10 years? And how am I enriching my perspectives? How am I exposing myself to a different set of folks? in, you know, individuals, situations, companies, seminars, geographies, etc. So, so for me, it’s very important to kind of have a change of scenery. It hasn’t happened locationally for me, but I have been fortunate enough to have traveled by virtue of both work and whenever you get the time personally. So kind of try to bring in those elements. So yeah, diversity and enrichment of experiences and pushing your potential is success for me. The third and the most important thing for success for me is this whole concept of the freedom of time and being able to do what I want, when I want. And I think it gets talked about in the book, The Psychology of Money by Morgan Housel, but he says that, you know, people define success or happiness as the ability to do what they want, when they want, and for how so ever long as they want. So I’m not there yet, but at least I try to design my routine and time in a way that I have the freedom to do that. So if in, if I get a call on a Tuesday from a friend who’s visiting from Mumbai or Bangalore on a Wednesday or a Thursday and wants to do a two hour lunch with me, I carve out the time because if I don’t carve out the time, I will get the feeling that I’m not in control of my time and I’m not successful because I can’t prioritize meeting a friend. over something else. The same applies to work life integration around, and technology makes it easier that, I can choose to do this on a Saturday and for me this is not work, this is fun. So this is another experience, right? Enriching of experiences. So yeah, I think you get the drift. Freedom of time, diversity of experience, exploiting my potential, those three.

Rohit Agarwal: Makes sense, freedom of time is the greatest wealth. Very cool. Tell us, how do you keep your calm, especially in the shit hits the fan moments?

Arjun Mehta: Uh, you’re assuming I keep my calm, but, uh, I, you know, my first reaction to shit at the fan or crisis is do nothing. That’s my first impulse. Uh, okay. You know, let’s process this. Let’s think about it. I might react after that, not in a pleasant way, but the first impulse is, okay, let’s, let’s do nothing and let’s kind of slow down to speed up kind of a thing. Right. And, uh, some people. do it, you know, some people naturally get to that Zen state by practicing meditation or, you know, focus time, et cetera. I don’t do all of that, but, uh, my lens is more less left brain to say that how bad can it be? That’s one. And will it may matter in two days, two weeks, two years, right? Because hindsight gives us the benefit to say your reactions to so-called crisis are always over-amplified. And hey, it wasn’t really that bad. I mean, it’s, unless it is a matter of life and death, unless it is a medical exigency, I don’t think I panic. Um, it’s the, the reaction is we’ll get by the reaction is, you know, nobody’s losing the farm or the bank on this. And so, so it’s, it’s all in a day’s work kind of a thing, right. And, and, and doing nothing, honestly helps, you know, at least it helps you deal with it better. It doesn’t make the problem go away. Again, cricketing thing, right? When the opposition’s taking you to the cleaners, scoring at nine and over, the bowling side will invariably slow you down by taking a break, change your gloves, getting a drink, like break the momentum, right? So, that gives you the time to think how bad can this be, right?

Rohit Agarwal: Seems like you’re a big 5-star fan. All right, last question before we run into the lightning round. Any advice for emerging professionals who want to be leaders?

Arjun Mehta: Uh, it goes to, I think something I said about, um, the first hundred days or 90 days when we spoke about it, I think, uh, get out there and build perspective, right? You will have a core set of responsibilities. You will have a core job definition and there is a 95% chance you will end up doing that well, because there’s a filtration process when you get hired, there’s tools and resources, there is guidance, of course. There are challenges at work too sometimes because of culture, etc. But in by and large people get by. Uh, but, but that to me is bread and butter. The real jam or the real goodies come when you step outside of that role, uh, build a perspective around what your peer is doing. Uh, you know, if you’re a product person, kind of get to know more about marketing. If you’re an accounting person, try to get a little more about corporate finance. Uh, If you’re a salesperson, try to get a little more about business development. I’m just, just saying the examples that come to my mind, but continue to step outside of your roles and responsibilities to expand your sphere of learning and influence, because you use the word emerging leaders, right. And leadership or emerging professionals for me, you begin to be perceived as a leader, you know, one, one benchmark I take is irrespective of the number of people who report to you what your designation is. The one way to test out if you’re doing well professionally and if you’re on the path of becoming a leader is how many people come to you for advice on a day to day basis? How many meetings are you being made of part of or how many brainstorms are you being made a part of where there isn’t a direct deliverable or ask from you? So kind of is your opinion thoughts information valued and are they being sought? And they will only be sought outside of your work when you build that perspective and it reflects in your conduct and your interaction. So, so one is your job description, but have that curiosity lens of, what does this person do? Yeah, this day seems to be expensive. Interesting. You know, he’s been traveling. He attended this webinar. He attended the seminar. He went to so and so place. Let me figure out what he did. Let me figure out what his learnings were. But yeah, you get the drift.