SaaS Expert Voices presented by Maxio

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks to Bebe Kim, a seasoned entrepreneur and CEO of Basis, to shed light on the changing landscape of the office of the CFO and the evolving role of finance professionals. They take an in-depth exploration into the intersection of finance, technology, and leadership, offering valuable insights for those in the SaaS industry. Bebe shares the three-stage evolution of the office of the CFO and how financial acumen is crucial in today's fast-paced, software-driven business environment. With an emphasis on data-driven decision-making, cross-functional collaboration, and continuous learning, Bebe provides a wealth of knowledge on becoming a strategic financial leader in the 21st century.

Quotes

• "Growth at what cost is more of the question than growth at all cost.” -Bebe Kim [08:35]

• “As a CFO, you need to move from just reporting to helping your entire executive team become financially literate so they can understand how decisions are made in trade-offs. So you have this team dynamic versus the CFO off by themselves, building their budget and getting it approved.” -Randy Wootton [34:40]

Expert Takeaways 

• The office of the CFO is undergoing significant transformation, driven by advances in technology like AI, software managed services, and out-of-the-box financial tools.
• The evolution of the CFO's role can be marked in three stages: working in spreadsheets (no box), software-managed services (out-of-the-box phase), and finally, the incorporation of AI (black box).
• For modern CFOs, successful execution relies on understanding databases, trusting system-driven calculations, and adapting QA methods beyond traditional bottom-up approaches.
• Automation and AI are pivotal in scaling the finance function, necessary to counteract the dwindling pool of accounting and finance professionals entering the workforce.
• Continuous learning and adaptability in finance are indispensable, enabling CFOs to transition from mere reporting to becoming key strategic partners to executive teams.

Timestamps

[01:19] Bebe Kim's journey as an entrepreneur and the evolution of her role 

[05:25] Challenges and lessons learned from raising venture capital 

[09:47] The importance of growth efficiency and discipline 

[11:32] Lessons learned in a growth-conscious, VC-backed company 

[12:03]  Capital allocation and starting basis 

[13:29] The challenge of understanding financials for non-finance executives 

[16:47] The three stages of CFO role transformation 

[19:47] The importance of cash management for the CFO 

[22:06] The skill sets required for stage two CFOs 

[23:41] The challenges of working with databases for CFOs 

[29:48] The availability of enterprise tools at SMB and mid-market prices 

[32:57] AI's potential to replace repetitive tasks 

[34:40] The role of CFOs in partnering with fast-growing companies 

[37:03] Contact Basis

Links

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Bebe Kim LinkedIn 

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics. Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Ron Baker, CEO of Verasage Institute, author, and long-time influencer in the finance and accounting space. Ron and Randy discuss the concept of value-based pricing and the need for businesses to move away from the traditional hourly billing model. Ron also highlights the need for CPAs to shift from being problem solvers to strategic advisors, guiding businesses toward their desired future state. Ron and Randy discuss the value of taking risks and adapting to change to stay ahead in a disruptive market as a business. 

Quotes

• "For value pricing, it is just a different mindset. It's more of an entrepreneurial mindset than a production mindset. It's more of being a true professional, a definition of a professional, somebody who's accountable for creating a result, not performing a series of tasks. If I want a series of tasks, I'll hire a day laborer to walk my dog, mow my lawn, and clean my gutters. But if I hire a professional, I'm looking for some type of outcome. Perfect eyesight from an eye doctor, that type of thing. And the problem with the timesheet and the billable hour, the mindset that it creates is that's what we sell.” -Ron Baker [04:47]
• “The distinction between a series of tasks versus result orientation, one of the keys is vertical expertise. So, understanding the nuances, I used to talk about that with selling. You could sell into travel, but selling travel is super different when you're selling to hotels versus airplanes versus car rentals and seats versus heads and beds. The language you used, how they thought about getting people, and the acquisition costs, are all very unique to the sub-verticals. 20% of accounting firms that are doing well by being advisors is they have context, industry context, probably they know a bunch of people and they've got a bunch of. They're able to do pattern matching.” -Randy Wootton [12:49]

Expert Takeaways 

• Value-based pricing is a more effective approach than hourly billing, as it focuses on customer value rather than time spent.
• CPAs should move from being problem solvers to strategic advisors, guiding businesses toward their desired future state.
• Subscription business models offer simplicity, convenience, and peace of mind to clients while providing firms with planned capacity and the ability to offer additional services.
• Deep industry expertise and specialization are key factors in the success of advisory services.
• Businesses should be willing to take risks, as profits come from risk-taking.

Timestamps

[00:02] Introduction to Ron Baker and his work on value-based pricing 

[02:43] The need to move away from billing based on time 

[03:37] The problem with timesheets and the importance of measuring results 

[06:10] The pricing revolution in corporate America 

[08:46] Moving away from cost-plus pricing to customer-value pricing 

[12:43] Characteristics of successful accounting firms 

[16:33] Subscription business model for accounting services 

[21:37] Amazon's acquisition of One Medical and the subscription model 

[23:12] Differentiation in willingness to pay and understanding customer needs 

[31:13] Evolution of accounting and finance function to strategy and possibility 

[33:21] Profits come from risk, not just past data 

Links

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Ron Baker LinkedIn

Ron’s Podcast, The Soul of Enterprise

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics. Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Robbie Baxter, CEO of Peninsula Strategies and a leading expert on subscription business models and monetization. She has worked with companies like Netflix and has written two books on the topic: "The Membership Economy" and "The Forever Transaction." Robbie shares her background and interest in subscription models, as well as the key concepts and best practices outlined in her books. Robbie shares insights on the importance of designing products for ongoing value, the need for organizations to focus on customer outcomes, and the challenges of scaling and staying relevant in a subscription-based business. She also highlights the example of Strava and how they successfully built a community of loyal customers. 

Quotes

• "You need a lot of discipline, I think, in a SaaS model. So you need to know this kind of customer, this is how the relationship is going to expand over time and I think together to kind of start to set expectations about where is this relationship going to go after the moment of sale. The moment of transaction is the starting line, not the finish line.” -Robbie Baxter [13:03]
• “One of the interesting things about the SaaS business model, in general, is, obviously for Maxio, we help people understand their SaaS operating metrics, and we're able to pattern match across the 2300 customers. I think all VCs and PE firms are doing the same. So they say, look, if you're a SaaS company, this is what your net retention should be. This is how much you spend on sales and marketing. So I do think there's pattern matching going on, and everybody has the playbook now.” -Randy Wootton [21:50]

Expert Takeaways 

• Subscription business models require products that solve ongoing problems and are designed for easy deployment and expansion over time.
• Organizations need to focus on customer outcomes and align their pricing with the value they provide.
• Balancing acquisition metrics with retention metrics is crucial for long-term success in the subscription economy.
• Subscription fatigue is a real challenge, and companies need to continuously demonstrate value to retain customers.
• Listening to the voice of the customer means considering not just existing customers, but also lapsed customers and prospects.

Timestamps

[01:28] Robbie's career journey 

[08:33] Focus on customer success and engagement for retention 

[11:44] Sales-led growth vs. product-led growth models 

[13:35] Aligning pricing with customer outcomes in SaaS models. 

[17:06] Moving from short-term revenue to long-term customer relationships. 

[17:46] "The Forever Transaction" as a playbook for B2B SaaS success. 

[20:52] Loyalty vs. Inertia 

[25:31] Subscription fatigue and managing multiple subscriptions is complex. 

[29:30] Staying current and responding to market evolution is crucial. 

[31:31] Subscription dieting and the pressure to demonstrate value and justify prices. 

Connect 

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Robbie Baxter LinkedIn

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics. Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Dan Owens, CFO of Maxio, about the disruption of the Office of the CFO and the changing role of the CFO. Dan shares his insights and experiences from working with various portfolio companies and PE firms, highlighting the importance of data organization, the challenges of managing multiple systems, and the need for tech savviness and adaptability in the modern CFO role. Dan discusses the value of soft skills, such as leadership and communication, and the integration of sustainability in finance operations.

Listen this week as Dan gives recommendations for those starting their careers in finance and shares his favorite and most misunderstood metrics in the SaaS industry.

Quotes

• "Technology can be your friend, or it can actually be a burden when you look at all the nice shiny tools out there that are going to solve your problem. But at the core, you have to get to the fundamentals, the tool and the technology will help you get faster and more efficient at the fundamentals. But I think I never want to be in a position where I can't get to the answer or have to do it.” -Dan Owens [10:39]

• “I think as I describe it, the worst thing about a CEO and a CFO going to a board meeting is going into math camp, where the investors start poking and they find inconsistencies between what you may have represented last quarter or the quarter before. So one of the things is having a common understanding of where the data is coming from, a framework for reporting on it, and then making sure it's consistent .” -Randy Wootton [05:33]

Expert Takeaways 

• Data organization is crucial for CFOs to meet the needs of investors and partners and make informed decisions.
• The tension between different metrics reported by sales and finance teams can be resolved by having a unified data system.
• The modern CFO needs to be tech-savvy and adaptable to effectively use data and technology tools.
• Soft skills, such as leadership and communication, are essential for CFOs to partner with go-to-market teams and drive growth.
• The integration of sustainability in finance operations is becoming increasingly important for companies.
• The challenges for CFOs include attracting talent, managing remote teams, and making strategic decisions on technology investments.

Timestamps

[01:16] Dan's experience with portfolio companies and the need for better data organization 

[08:17] Changing skill set of CFOs: tech savviness, soft skills, and integration of  systems 

[01:06] Importance of data architecture and interoperability between systems 

[13:33] The value of bi-directional data sharing across departments 

[14:17] CFOs transitioning from back office to front office roles 

[17:41] The benefits of using the Maxio solution 

[20:19] The shift towards analysis and providing insights in finance 

[22:38] Balancing technology investments with ROI considerations 

[26:06] The importance of bringing people together in a remote team 

[27:39] Budgeting for internal use software 

[31:46] Favorite SaaS metric: Gross retention 

[33:07] Most misunderstood metric: Leverage ratio 

[34:29] Cash engine and growth engine in a business 

Connect 

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Dan Owens LinkedIn

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics. Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Kevin Sonsky, a finance executive with extensive experience in the SaaS industry. They discuss the evolving role of the CFO in the face of technological disruption and the importance of understanding and leveraging SaaS metrics. Kevin shares his insights on the transition from traditional accounting to business intelligence analytics, the dynamics between the executive team, and the challenges of implementing a metrics policy. He also highlights the need for CFOs to educate sales and customer success teams on SaaS metrics and the importance of aligning incentives with ARR growth. 

Listen as Randy and Kevin discuss the role of the CFO in driving strategic go-to-market partnerships and the potential for AEs to act as CEOs of their territories.

Quotes

• "When you're not in the room while difficult decisions are being debated, you don't always appreciate the fact that sometimes there's not always an easy or even great answer. Sometimes you're choosing from two suboptimal choices. It's not always easy. You do your best to do what's best for the company, for the employees, for the customers, and sometimes you have to take trade-offs on that.” -Kevin Sonsky [04:21]
• “I think that's what we're seeing even more broadly in the disruption of the office, the CFO. It's a new way of aggregating data. It's a new way of connecting technology. It's a new way of thinking about the reporting. It's not just the financial close and the three financial statements. But now you have a limitless number of operating metrics tied to the SaaS business model that you can pull together.” -Randy Wootton [09:07]

Expert Takeaways 

• The CFO plays a critical role in educating the business on SaaS metrics and helping teams understand how to measure success in a subscription-based model.
• A metrics policy is essential for defining and standardizing SaaS metrics within an organization, including definitions, reporting cadence, and incentive structures.
• CFOs can add value by running analytics on customer ARR and providing insights to account executives for better decision-making.
• Net retention value is a key metric to track the growth of existing customers and determine if the business is expanding without adding new customers.
• CFOs can help sales teams understand the sensitivity of churn rate on ARR growth and the impact of retaining existing customers.

Timestamps

[01:00] Kevin's background and career transitions 

[04:00]  Importance of educating sales and CS leaders about the business 

[06:11] Challenges in measuring ARR and SaaS metrics 

[08:07] The Role of the CFO in educating teams and leaders

[10:03] Components of a metrics policy and its importance 

[11:03] Ensuring data integrity and system alignment in reporting metrics

[12:52] Importance of consistent metrics and reporting 

[14:58] Shifting salespeople's focus to incremental dollars from customers 

[18:45] Alignment between the executive team and ARR growth

[21:26] FP&A adding value through analytics and cohort analysis

[22:24] Strategic pricing, packaging, and understanding unit cost economics

[24:46] CAC metric: payback period for sales and marketing investment 

[26:07] Best way to contact Kevin Sonsky: LinkedIn

Connect 

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Kevin Sonsky LinkedIn

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics. Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.

This week on the Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Chris Ortega, CEO and founder of Fresh FP&A. With almost 20 years of experience in accounting and finance, Chris is a leading expert in the field. Randy and Chris discuss the top three changes in the accounting and finance profession over the last 15 years and the impact of technology. Chris talks about the increasing value proposition of CFOs and the era of disruption in the office of the CFO. Listen as they delve into the role of AI in finance and the importance of employee NPS as a metric for success.

Quotes

• "People above profits, impact over income, purpose over praise. The more that we can have that inside the business, the more value we're going to bring outside.” -Chris Ortega [26:28]
• “You want to be able to find replicable things. The process, the information flow, and the data flow. Then you're able to layer in automation. What's interesting in the office of the CFO is there is this feeling of, I want to look at my spreadsheet because I trust that.” -Randy Wootton [07:02]

Expert Takeaways 

• Technology has dramatically evolved in the accounting and finance profession, providing tactical advantages and streamlining operations.
• The value proposition of CFOs has shifted from being scorekeepers to strategic partners, bringing more value to the organization.
• The office of the CFO is poised for disruption, driven by technology and the changing role of CFOs.
• AI is not meant to replace CFOs but to level them up and enhance their capabilities.
• Employee NPS is an undervalued metric that CFOs should focus on to gauge employee satisfaction and engagement.

Timestamps

[00:00] Randy’s Intro 

[00:34] Chris’ Intro

[00:59] Top three changes in the finance profession

[03:45] Embracing technology in the office of the CFO

[07:33] Resistance to AI in the accounting profession

[10:49] Prompting GPT-4 to create an ASE 606 memo for a retail client 

[14:24] Impact of AI on every function, data strategy, and go-to-market 

[18:21] Finding connections and insights through local meetups and events 

[25:25] Undervalued metric: Employee NPS for CFOs to focus on

[26:28] CFOs partnering with HR to improve employee engagement 

[28:22] CFOs prioritizing people connections and real-life interactions

[31:06]  Legacy and the importance of writing one's own story

Connect 

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Chris Ortega LinkedIn

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics. Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.

In the season premiere of the Saas Expert Voices podcast, Randy Wootton, CEO of Maxio, speaks with Todd Gardner, Managing Director at SaaS Advisors and founder of SaaS Capital. Randy and Todd discuss the current state of the capital markets for SaaS companies and the recent deceleration in the growth rate of SaaS companies. Todd emphasizes the value of three key metrics for fundraising: growth, profitability, and retention. He explains that while growth has traditionally been the most important metric, retention is now taking precedence and stresses that SaaS companies need to focus on improving their gross revenue retention and be intentional about their growth and profitability strategies. Todd also encourages companies to test the market for fundraising opportunities, as capital is still available for the right companies.

Quotes

• “Gross takes out the effects of cross-selling and price increases and even some usage-based increases. And gross is believed to be, and I think a more pure measurement of the stickiness of the revenue stream. It's not clouded by some of the things that can be included in net retention.” -Todd Gardner [09:38]
• “It is really hard to do a pivot in a high-growth SaaS business where there's been an enormous amount of capital invested in the future potential. So a pivot in that case turns into a recap. No investor wants a recap. But if you are looking at the reality of under single-digit growth and not being able to get profitable and running out of cash, it's a come to Jesus moment.” -Randy Wootton [20:12]

Expert Takeaways 

• Retention is now a top priority for investors, and companies need to focus on improving their gross revenue retention.
• Growth, profitability, and retention are the three key metrics for fundraising, with retention currently taking precedence.
• SaaS companies should be intentional about their growth and profitability strategies and pick a lane to avoid being caught in the middle.
• It is not a bad time to raise capital, as there is a lack of quality SaaS companies in the market and a significant amount of capital available.

Timestamps

[00:00] Randy’s Intro 

[01:14] | Todd’s Intro 

[02:28] | Productive time for focused SaaS companies to build their product

[04:45] | SaaS valuations have regressed to the mean

[07:00] | Growth, profitability, efficiency, and retention 

[11:19 | Logo retention and ACV are important factors in retention analysis

[13:03] | Burn ratio and profitability as key metrics for SaaS companies

[18:21] | Death Valley: Getting out of the low growth, low profitability 

[19:37] | Pivot or Recap: Options for companies with low growth

[21:41] | Testing the market for fundraising opportunities

[23:52] | Importance of clarity in value creation plan for funding

[24:00] | Contact Todd Gardner

Connect 

MAXIO

Upcoming Events

Maxio Institute Report

Randy Wootton LinkedIn

Todd Gardner LinkedIn

Todd’s post on Pick a Lane

Todd’s post on Dolphin Strategy

About MAXIO

Maxio helps businesses accelerate growth efficiency with the industry’s only all-in-one billing and financial operations platform purpose-built for the needs of B2B SaaS. With Maxio, businesses unify and automate every step of the order-to-cash lifecycle – across billing, payments, accounts receivable, revenue recognition, and metrics/analytics.

Maxio enables SaaS winners to operate with confidence, leverage insights they can’t get anywhere else, and scale without limits.