Greg Lopez has served as the CFO and VP of operations at companies including Futurism, a digital media company, Wirecutter (acquired by the New York Times) and Gawker Media (acquired by Univision). Now Greg is a consultant at high-growth companies working with clients ranging from a “family owned business doing $20 million”, “SaaS businesses doing $10 million a year” to private equity-backed business doing $500 million a year.”
In this episode he provides his formula for success in FP&A and finance:
- How a career in finance suited my character traits and passions
- Learning the full aspects of finance, FP&A and business partnering
- Building to a commercial mindset as CFO
- Acting as an investigative journalist for the business
- Why finance needs to lead in defining metrics in a startup
- Moving from a bigger company to a startup – what you need to know
- Increasing the feedback loop in finance teams
- Expectations of CFO in a startup
- Favorite KPIs – from contribution margin and profit to Sales cycle velocity
- Variables and determining drivers for the business
- One of the biggest finance challenges – developing talent and cyber attacks
- Lightning round: pickup basketball and lessons for finance
- Best Excel feature: introducing Scenario planning and modeling using Watch Window
Contact Greg
@glopeztweets on X
glopez@eventusag.com
Linkedin: https://www.linkedin.com/in/greg-lopez-4b248b88/
Show Notes:
Recommended reading:
How A Hulk Hogan Lawsuit Launched A Career in M&A | Greg Lopez
https://podcasts.apple.com/us/podcast/how-a-hulk-hogan-lawsuit-launched-a-career-in-m-a-greg-lopez/id1642784919?i=1000606411968
Financial Intelligence, Revised Edition: A Manager’s Guide to Knowing What the Numbers Really Mean: Berman, Karen, Knight, Joe, Case, John: 9781422144114: Amazon.com: Books
Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams (Techstars): Blumberg, Matt, Birkeland, Peter M., Dorsey, Scott: 9781119772576: Amazon.com: Books
The Ten-Day MBA 4th Ed.: A Step-by-Step Guide to Mastering the Skills Taught In America’s Top Business Schools: Silbiger, Steven A: 9780062199577: Amazon.com: Books
Amazon.com: Financial Planning & Analysis and Performance Management (Wiley Finance): 9781119491484: Alexander, Jack: Books
Full Transcript
Glenn Hopper:
Welcome to FP&AToday. Today we have the pleasure of welcoming Greg Lopez to our show. Greg is a seasoned financial leader with an impressive track record of driving growth and profitability across a diverse range of industries. Currently, Greg works as a CFO and consultant at Eventus Advisory Group, leveraging his expertise to help private equity firms, venture capital investors, founders and CEOs make data-driven financial and operational decisions. His clients span across media, e-commerce, professional services, consumer goods, finTech, and software. Prior to his consulting role, Greg served as the CFO and VP of operations at Futurism, a digital media company that covers breakthrough science and technology. During his tenure, Greg played a pivotal role in launching Gravity Products, a sleep wellness, e-commerce brand that quickly grew to generate over $25 million in annual revenue. Under his financial leadership, both Futurism and Gravity products were successfully acquired. Greg’s career also includes his roles as VP of Finance and operations at Wirecutter, which was acquired by the New York Times and Head of Finance at Gawker Media, which was acquired by Univision.
With his deep understanding of financial strategies, operational optimization, and data-driven decision making, Greg has consistently delivered results and navigated complex challenges throughout his career. In this episode, we’ll dive into Greg’s wealth of experience, exploring his insights on scaling businesses, driving profitability, managing risk, and adapting to the ever-changing landscape of media, e-commerce and beyond. So let’s welcome Greg Lopez to the show and learn from his invaluable perspective on financial leadership in today’s dynamic business world. Greg, welcome to the show.
Greg Lopez:
Thanks, Glenn. Excited to be on.
Glenn Hopper:
We got a lot to cover today. So let’s go ahead and dive in. You know, looking at your background and career, and you’ve worked in several industries, you’ve worked in media, e-commerce and finance. Looking at your roles, I was wondering what initially drew you to the world of finance and how has that experience shaped your approach to, uh, financial leadership? Yeah,
Greg Lopez:
Great question. So for me, I believe that finance fits my personality. So growing up, I was always someone who was very logical, rational and, and tended to be pretty risk averse. So when the opportunity arose in college to pick a career trajectory or career path, I, I knew I wanted to go into business. Uh, and specifically within business, I studied, uh, accounting and business administration. And I thought that was a great foundation, uh, for me. And I really thrived during my studies, uh, at school. Uh, and when I got out of school, it was basically the recovery. It was 2009 from the great financial crisis. So there wasn’t a whole lot of opportunities, but I was lucky enough to find a role at a public company that just spun out of ADP. It was called Broadridge. And at the time, there were about a $2 billion company.
And today, I think it’s, uh, about over $10 billion market cap. Um, and for me it was a great opportunity as my first role out of school because I was able to work in an environment that had, you know, a corporate foundation being part of ADP prior, but also was trying to carve its own path, being a new publicly listed company. So the environment was incredibly collaborative. Everyone was incredibly supportive to kind of pave Broadridge’s own way. And, and Broadridge is a FinTech company that, that powers a lot of the backend of, you know, trade settlements and mutual fund. My first role there was in the finance department, and over the two year tenure I had with Broadridge, I got to essentially do rotations in a variety of different departments. So I was able to work in treasury, I was able to work in corporate development.
I was able to work at FP&A, I was able to work in credit and collections, and then most importantly, I was able to work in operations and be down on the warehouse floor. With the team and the operations, you know, one of the things that they did was, at the time, if you buy a mutual fund, uh, you would get a prospectus in the mail. Today, a lot of it’s digital and they’ve kind of made that shift to digital, but at the time, you were getting a paper prospectus that would have all the information about the fund you were buying or the fund you maybe you were considering. Same thing with annual reports. That was one piece of their business in regards to many others. But sitting, uh, you know, on the, on the warehouse floor with the team, understanding the operations, how everything moves throughout the company.
And, you know, this is one segment of the business, but there’s a whole bunch of other segments of the business as well. It just really great learning experience and spending time with business operations is key. That’s kind of my background of how I got started in finance. Second part of your question of how my experience throughout my career has shaped my approach to financial leadership. So the foundation at Broadridge, like I just said, you know, spending time with the business operations is key. And that’s something that I still feel really strongly with today. Uh, one of the things I like to say to folks is, especially my clients, is the financial statements. They’re not reality. They reflect reality. The reality is the operations of your business, right? And that’s sales, marketing, operations, technology team. And my belief is that finance should really act as an investigative journalist for the business. And in that role, you’re discovering the relationship between variables at the business and uncovering what makes the business tick beyond just the financial statements. And our job as finance leaders is to keep stakeholders informed across the business, across different departments with the latest data and guidance.
Glenn Hopper:
I love to hear you say that because that is, uh, I think about, you know, maybe 20 years ago as CFO, you could just kind of be in this ivory tower of finance and accounting, and it didn’t matter what the widget the company was selling, you were just doing the financial statements. You were just, you know, get that trial balance, get the financial statements out and, and do the reporting, and have your annual budget just operate from the place of I’m the subject matter expert on finance and accounting. And I think that, that it’s really shifted over the last 20 years and I’m seeing now. So when I come in, whether I’m as a consultant or as a, a full-time, CFO, when I come into a company, the first thing I want to do is look at, I think of it like an audit of the entire back office process.
I want to see everything from the CRM, you know, your sales pipeline, your leads, your prospects, when deals are won, how data is passed from the, um, from the CRM into the GL or the project management system or, or whatever other software is. And look at that flow of it’s, it’s the customer lifecycle, but it’s also the flow of data across, because all the, all the data that you have is gonna be imperative to your reporting and your metrics and your, your forecasting and all that. So if you don’t understand where the data’s coming from, you don’t have the identified source of truth and you don’t know how you’re defining the metrics and understand really what’s coming in. So I think, I mean, would you say that you’re getting down into operations if you kind of seen the same thing? Do you take the same approach when you come on with a, a new client or a, or a new company?
Greg Lopez:
Yeah, for sure. We’ll talk about later. I have kind of a concept of having a commercial mindset as a CFO that is going to be what excels you and makes you stand out amongst leaders. And having that commercial mindset gives you the the framework to be that partner and that trusted advisor to other stakeholders at the business. Whether it’s the board, whether it’s the CEO or whether it’s other department leads or your peers.
Glenn Hopper:
It’s interesting that you had those opportunities being at a, at a large company, because normally you think it’s, you know, big enterprise level or or mid-market company, you are really kind of forced to stay in your lane just because of the size and redundancy. Whereas in, in startups it’s very different. You ha have to wear a lot of hats. So I’m thinking about you getting those opportunities in a larger company and then being able to take it and apply it, um, to smaller companies. So what, you know, thinking about those corporate experiences, what did you take away from your experience there? That definitely applies to smaller companies as well.
Greg Lopez:
Yeah, so the one thing I’ll say that big companies typically do well is they create a great job, uh, at creating structure and process. ’cause at the end of the day, your business is just a bunch of smaller processes that need to be repeatable and need to be similar in how they’re done. You could take the best examples of those and apply them to a smaller business, but in a smaller business, you can create, you can keep the creativity and innovation. A great example is first impressions matter in my opinion. And that could be whether you’re fundraising or you’re selling to customers or launching new products or even just your website, it’s usually the first touch point that someone gets familiar with your business. I’ll remember always when I receive my internship offer from PricewaterhouseCoopers, it was like they rolled out the red carpet. It was so impressive.
I had a folder I had, um, you know, day one, everything was laid out perfectly, everything was structured. There was an agenda. Uh, it wasn’t just, you know, hey, you’re here, no one knows who you are. Get an ID tag, go to some random floor, try and find someone who’s your manager. Ask around everything was really done well. And that always stuck with me. And those are small things. So when you’re onboarding employees at your company, make it special, make it feel like it’s serious, and that you are appreciative that they chose to work with you, and that they are lucky to have the opportunity to work for you. Um, and that’s a small thing, but that, that is a output of clearly defined, you know, structure and process that was repeated because, you know, big four firms, they, they bring on, I don’t know, thousands if not hundreds of thousands of interns and new associates annually. So they’ve got that down. And that really makes you feel a certain type of way
Glenn Hopper:
Thinking about that for a startup environment where you’re inventing processes as you go. So you mentioned onboarding, but I imagine, you know, there’s no back office process. Like even provisioning customers has to be like, you know, depending on what stage you are in startup, uh, very difficult. So I guess kind of a follow up to thinking about processes. I think a lot of times when people keep getting drawn back to the, uh, the startup world from corporate, it’s, it’s a company reaches a size where it can be too rigid. Do you think that, is there a level of flexibility? Like you wanna keep that startup mentality, but you’ve gotta start, if you’re gonna scale, you’ve gotta start putting those processes in place. How do you define that line between we have to have processes and we don’t wanna be too rigid because we have to be able to pivot while we’re finding product market fit while we’re building out the, uh, you know, the new company.
Greg Lopez:
If you’re in market and you’re selling and you have customers, there will be signs. Now pre-market or pre-revenue or pre-product, that’s a co completely different story. And I’m not advocating for building processes in that regard, but once you’re in market, there will be signs, things like customers not getting the attention that they once were getting, or balls being dropped, or sales cycle velocity slowing down, or people, frankly leaving the company <laugh>, right? Because there’s just not enough there to keep the ball moving forward in a way that everyone feels confident. So there will be some signs as you continue down the path of scale. But yeah, early, early stage, your, your superpower is the ability to be, to be flexible and adaptable and to pivot frankly. So, um, I’m not advocating for rigid processes at that stage outside of maybe a couple in, in finance that are, you know, I think are non-negotiable. And we could talk about that later.
Glenn Hopper:
Yeah, controls are nice, right? <laugh>
Greg Lopez:
<laugh>, exactly.
Glenn Hopper:
Your background. And when you talk, you’ve been doing consulting and fractional CFO work for a while, and you’ve worked with businesses in all stages. I know you’ve done a significant amount of startup work too, but thinking about just, you work with so many types of clients across so many industries, um, so you probably, I’m guessing in that regardless of the industry, you’re seeing some similar challenges for each. What would you say are some of the most common financial, and I guess even operational challenges that, uh, your clients face and, and how do you help them overcome these from your role as a, as a fractional CFO and a consultant to the company?
Greg Lopez:
Yeah, so I see a lot because I work with a variety of different businesses across different, uh, stages of growth. Uh, so I, I work with, uh, the family owned business doing $20 million. I work with the SaaS business doing $10 million a year. I work with the private equity backed business doing $500 million a year. So it really runs the gamut, uh, in terms of the experiences in what I see. But there are, uh, especially on the earlier stage side, uh, pretty common items that I continuously see, I’ll start with with one I think is the most important, define your metrics. And I say define in all caps. Uh, there’s a, a tendency to change your metrics or change how you calculate them when it doesn’t fit the narrative. But the first exercise I like to do when we’re talking about metrics is literally define them.
Understand your data mapping. What is the source data? What’s the numerator? What’s the denominator, uh, how are we calculating this? Uh, gotta get buy-in from your peers and your counterparts on, on how the data is reported ingested and interpreted. And that really rolls into, you know, developing your company’s operating system. You know, it could happen at all stages, but it, it’s very common in early stage, and that’s a problem that, uh, can easily be fixed once you get everyone in a room that’s a stakeholder for those metrics. And finance should lead that conversation and act as the, the referee to a certain extent, but also listen and understand some of the challenges that might, uh, come up from the, you know, from listening to the feedback from, you know, maybe the sales team and the marketing team on, you know, why that might not be, or maybe the right way to do things
Glenn Hopper:
Across industries. There’s commonalities and there’s probably, I think also because of the different stages where you’ve worked at companies from those, you know, pre-revenue to established businesses, how do you see that the financial priorities and the challenges differ between each of those stages? And what advice would you give to the founders and the maybe a, a new CFO or, you know, in, in the case of a startup, A CFO at a later stage company? What, what advice would you have for them for navigating each of those phases?
Greg Lopez:
Early stage, I’ll, I’ll, I’ll be real with you, right? If you’re pre-revenue, you don’t really need a CFO, you need someone keeping track of a couple of high level metrics like burn, um, headcount, and you need a good firm that’s bookkeeping, uh, and, and keeping a QuickBooks file for you if you use QuickBooks or Xero or whatever, something basic, not a spreadsheet, right? Um, and at a certain point, you have to, as a founder, embrace that finances beyond just, you know, backwards looking and record keeping. Uh, I think that is, that is a sometimes a tough mind shift because you’re so used to, you know, your accountant giving you or your bookkeeper giving you financial statements, you know, 20 days after the month’s over, and there’s really not that much activity, so you don’t really put a lot of value, uh, there.
But as the business grows, um, it becomes incredibly important to keep accurate books and records and have a strategic finance partner that helps you, you know, look around the corner and helps really, you know, steer your ship, uh, and provide guidance. What I would say, the way you get that buy-in from a founder or from your peers, or if you’re joining, uh, a new company, is you really, and I talked about this before, you really gotta embrace a commercial mindset. And, and what that means to me is understand that in most businesses, the sales team and the business development team, or whatever you want to call it, whoever’s driving revenue, they set the pace for the business.
So you need to partner with them, understand, you know, the sales velocity of their sales cycle. It could be marketing in an e-commerce firm, it could be the sales team in a B2B firm, whoever’s driving revenue, um, that is an ally, and you need to work with them and enable that growth mindset, that commercial mindset, and be that valuable partner to them. And that can be, um, performing ad hoc analysis that could be, uh, like I said before, helping them define me, helping ’em define metrics and keeping them, you know, accountable to those metrics, explaining to them how, if we hit a sales target, if we miss a sales target, if we exceed a sales target, what does that mean for us, for us as a business? What does that unlock? Does that if we exceed a target by 20%, does that give us more capital to potentially invest in the next product or make additional hires to accelerate product development?
If we miss the target, um, does that put us in, in jeopardy of raising our next round of, of funding? And, you know, devolve into a downward spiral of layoffs being a clear communicator, um, and partnering, you know, with the business team is piece of advice that I think is essential for, you know, the modern CFO or whatever we want to call it. Um, and it kind of gets you out of that analogy that you mentioned before of like the CFO who’s kind of separated from everyone in an ivory tower’s. Preparing financial statements and talking numbers
Glenn Hopper:
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Um, I am thinking about that difference in the mindset that you have to have, um, in that startup early stage business versus an established business where you have all the processes and everything, and you, and the kinds of things you’re looking at are very different when you’re looking at your cash flow, uh, in a going concern versus the burn rate in a startup. So coming in, if, if someone is making that shift as you did from a bigger company to a startup, from a financial perspective, we’ve talked about process and kind of across the company, but really digging in on the finance perspective, what is the kind of mindset and, and what advice would you have, um, for someone coming into that position?
Greg Lopez:
So another common trope is, um, when you’re joining a startup, obviously you have constraints and you need to understand them. And the most typical constraint is just cash and your access to cash. But it could also be talent acquisition, ability to hire and retain talent. It could be your product distribution, it could be your brand recognition. So really understanding what those constraints are and how that affects, you know, the plans for, for growth and the plans for the future. Building a business in general just just takes time. And it’s rare that there’s an instant gratification or, you know, instantaneous feedback, especially early stage. You have to do what you can to increase that, that feedback loop or the speed of feedback, whether that’s, you know, shipping new product or reaching out to customers or getting out in the market. Um, all of those things will help you accelerate the odds and chances that, that you’re gonna, you know, find product market fit and be able to scale revenue.
One of the other things I see is, uh, once you bring in a finance leader and you, you, and you know, you understand that there’s potentially constraints like cash, there’s now this expectation, uh, to start tracking every single dollar. And, and yes, we wanna be fiduciary for the business and we wanna, uh, be mindful of how much we’re spending, but no, we don’t have to have a meeting with six leaders at the company to talk about a $500 vendor that we wanna bring on. I see that happen a lot, and I, I think you, we need to, again, going back to that commercial mindset, it, it might feel comfortable to be like, yes, we need to be really rigid about what we’re spending, but also when we have five people in a room who are making six figures talking about bringing on a 500 or a thousand dollars expense for an hour, we just spent more money, um, in wages <laugh> talking about that specific vendor than if we just made the decision to move forward.
So I, I would also offer the advice of, you know, trust other department heads, uh, your peers, essentially to make, you know, small ticket decisions. Uh, obviously if anything’s going to materially impact your burn rate, that should be a bigger discussion. But if we wanna swipe a credit card for a hundred dollars to get a new license for some tool that might make, uh, you know, prospecting easier, uh, I’ve always like, go, go for it. Uh, I trust that, that you’re making gonna make the right choice here. And then as the, the CFO coming into early stage company or a company that just entered the market, we really need to understand the market and the customer profile.
And that’s where, you know, again, going back to that commercial mindset, spending time with sales, understanding the, the voice of the customer selling solutions, not, not necessarily the features of your product, right?
All of those things are really helpful as a, a financial leader when you’re talking and trying to build that, that bridge and partnership with your sales team or your marketing team to, to get the trust so that you’re getting accurate pipeline reports or accurate forecasting and, and able to ask the tough questions without coming across accusatory or, or blaming or, um, you know, just taking whatever they’re telling you at, at, at face value. And then a couple other things, uh, that, that you really need to hone in on, in my opinion, um, is there’s a common one for startups, and sometimes it works out and a lot of times it doesn’t, uh, don’t mistake unsustainable underpricing for product market fit. We all love a deal as a consumer, B2B, even, even better if we’re getting a deal that we feel like is underpriced and there’s so much value being extracted.
But in reality, whoever’s offering us that service or that product is using, you know, you know, venture capital or just underpricing to gain market share is gonna have a big issue when they have to create a viable business model. So, so you need to understand on the flip side is, is that your business, right? Are, is revenue growing because you have an unsustainable pricing model? And then how do we address that and get ahead of it? And it’s not a bad strategy, we just have to have a plan for when we need to flip the switch to becoming viable that we don’t lose our entire customer base, or we don’t piss off everybody so bad that they start, you know, writing LinkedIn rants so right as a CFO, that, that, that, that’s kind of our job to, to figure that out and keep everyone aware of that.
Uh, and then really understanding from a financial perspective, cash flow and how much cash is needed to achieve the next, next milestone. Especially when you’re out raising investors, like to invest in companies that have a plan, they don’t like to invest. Maybe some do, but my opinion most don’t like to invest in companies that give you a range of fundraising. Oh, we’re looking to raise five to 10 million to do kind of these things. It’s like, no, tell me exactly what the plan is. I wanna raise 5 million and if I do, I’m gonna hire these people and those people are gonna work on this product and we’re gonna launch it on this date. Right? That just gives you, even if it’s not entirely or very aggressive in, in terms of the plan, not entirely true or really aggressive, it just gives that confidence. It goes back to my point of, you know, like a first impression. It, it matters. Um, when you come to the table with an investor and you’re asking them to invest in you, you need to lay out exactly what the plan is. You can’t be wishy-washy
Glenn Hopper:
Hearing you talk about that. It’s, I’m, I’m kind of thinking about war stories from my own past and startups, and I’m thinking about in those early stages, um, where everybody’s wearing a lot of hats and I’m thinking about, you know, sales and marketing has their plan and, you know, kind of what they, their forecast that they’re doing on their own. I think typical sales leaders, you know, have an idea of what they think is gonna happen, and then there’s the, the financial model and everyone has their inputs and, you know, the operational costs and everything. Is it difficult in that early stage for the finance leader to make it, I’m, I’m thinking about those conversations where, you know, sort of the blue sky, um, startup model where everybody’s gonna have the hockey stick exponential growth. I mean, is it, how hard is it to get sort of that cooperation and buy-in among, you know, what the, the founder CEO what his vision is or her vision is, and what the, the sales person’s vision is, and finance and all that? When you’re coming up with that model, is there potential conflict between what sales thinks is gonna happen when finance is gonna happen and how do, if, if so, how do you smooth that over?
Greg Lopez:
Yeah, we, listen, we’ve all done the business model where in five years we’re now working at a billion dollar unicorn, and we close the file, go to bed, and kind of just sit there rolling our eyes. Like that’s, that’s actually not gonna happen. But, but that’s natural. As a, a finance leader, we’re, we’re, our job is to balance risk and growth. If we can grow that fast and we know where our next fundraising is coming from, and we have infinite line of capital to draw on, yeah, you know, possibly, but the reality is there are constraints. And when we have to make decisions on can we afford this hire or can we afford invest in, into this new product, uh, you know, again, cash is the constraint. So you have to know what those milestones are to unlock that next round of, of, of financing.
You have to know what the plan is and what the trigger points are, and you gotta clearly communicate that in early stage business. You know, we’re gonna wear a lot of different hats as the finance leader, and, you know, one of the most important things is to really ensure that there’s a support system and the other leaders are aligned with you. And if there, there’s not a culture of being data-driven or being realistic, or if the culture is always just, you know, always optimistic all the time, always rah rah, it definitely can wear on you. And there is a balance, right? I, I’m someone who, uh, again, likes to have that commercial mindset to a point <laugh>, right? But my job as the, the finance leader is to make sure that the business sees tomorrow and that the business lives to see another day. And it’s my responsibility to, you know, articulate that to my peers and, and raise my hand when I feel that we’re not going in that direction or I need cooperation. That would be my, my piece on that. And
Glenn Hopper:
Hearing you say data-driven, that brings up another great point. I think about, you know, as FP&A people and financial modelers and, and the, the kind of work that we love to do, we love to make these models data-driven and not just based on, you know, in, in startup it’s easy to start just like stacking one assumption on another, and that’s how you get to the, uh, hockey stick of exponential growth. So, I mean, I, I, I know your background, um, in, and data-driven decision making is a core part of your approach. And I’m thinking, I guess I wanna think about this in two ways. Uh, one, if you’ve got an example of how, how you’ve used data at, at a company before to drive significant improvements in their financial or operational performance, but then also thinking about how much of your time you’ve spent in the startup space where you just don’t have a lot of data, what advice would you have for companies who are still in that early stage and don’t have a lot of data yet?
Greg Lopez:
I’m gonna be honest, right? Entering an environment that does not have a data first culture is difficult. Uh, it’s hard to be really successful, but it’s also our job to usher in that, that change management of the firm. Uh, there is kind of like this misconception, I, I feel, especially as a consultant of what data is, and, I imagine many of the listeners and myself included, have been in a position where we’re expected to just be mind readers or know the insights about a business so that that customer doesn’t belong to that seller. Well, you know, why is that not in Salesforce? Why is that not in Pipedrive that way, right? Um, you might know it as the CEO, but you haven’t kind of removed that from your brain and, and created some kind of process to, to capture it. Um, which is, you know, further to my point, that actionable data, it, it, it’s a byproduct of routine processes, right?
And it needs to be enforced by the culture from the top down. And if we are working in an environment that doesn’t really value doing things in a routine process, you know, a pipeline, uh, CRM is, is a, a perfect example of that. If you have a bunch of different sellers doing things their own way, some folks not putting it in until, you know, not putting in their data until the end of the week, some people putting it in real time, someone who is thinking that they’re at 90% close when it’s really 50% close because they’re just more optimistic than the other seller who might be under, uh, underweighting their pipeline, right? Our job as finance is to come in and be like, Hey, I’m not getting what I need here. Uh, I don’t think this is being done sufficiently. Let’s set up a process. The only way you’re gonna be successful there is if you get the buy-in from the team. And it’s not always easy, but, um, it needs to be, uh, emphasized how important it is to get good data on key areas of the business.
Glenn Hopper:
When you come in, it’s, you know, if the company was, uh, kind of scattered, not a lot of process, they know, maybe they’re at their A round, um, and they realize, okay, now we have to have true financial leadership. And you come in and you’re tasked with gathering up all this data and getting this information from different systems. It feels like sometimes there’s an expectation that this CFO incoming head of finance just has this understanding of where and how to get data. And like, it’s almost like an expectation that you have, uh, development IT skills know how to hook up APIs and build a data lake and data warehouse. I mean, when you come in with that, what is something that as finance people that we need to keep in mind and to level set expectations and really the team around us to move them to a, a data-driven culture where it can’t just be finance because, you know, trying to <laugh> write SQL queries and, and pull this out. I mean, what is, what’s the ideal setup when you come in and you are trying to establish this data-driven background? What do you need to do it? Who, who needs to be involved?
Greg Lopez:
Yeah, it goes back to my previous comment. This is kind of like, we feel like as finance professionals, we have to pick up the pieces, right? Sales booked that deal and didn’t tell anybody, and we wanna know why we didn’t invoice it. Oh, well, it wasn’t in the CRM <laugh>. We didn’t get a notification. We didn’t, we didn’t get, uh, a heads up that this deal was closed. We never got a copy of the contract, right? A and it, it’s, again, it’s raising your hand and laying it out and saying, Hey, this is a team sport is a team effort. Um, and explain how person A not doing their job in sales marketing operations trickles down into finance, which then trickles down into inaccurate financial statements, which then trickles down into lack of confidence in the finance department. Um, but it’s kind of like advocating for your own career.
If you don’t say anything, everyone’s just gonna assume you’re fine. So you have to be, um, um, an advocate for yourself in the finance department. Uh, and again, I’m gonna go back to it again, but having that commercial mindset gives you that, that credibility. You’ve already built the bridge, you’ve partnered with those teams for what, well, when you’re asking them, Hey, you guys really gotta get this in, they feel like they’re letting you down, rather than feeling like, oh, here’s Greg again asking me to get my expenses in. Or, here’s Greg again asking me to, to, to weight my pipeline properly. I’ll do it when I want to. It’s like, that doesn’t really fly, but you have to have the accountability. So, so, you know, as finance leaders, we have to hold everyone to account, but the reality is we can’t be accountable for everything. We, we, we don’t manage the pipeline. We just don’t, we don’t know what you spend on your credit cards. Um, you do. And that has to, again, come from the top down as a business leader or CFO or the A CEO or founder.
Glenn Hopper:
Yeah. And I think about all this data, and of course the data leads to, uh, FP&A people’s, uh, next favorite words in terms of, of metrics and KPIs and, you know, you have to track, identify, um, label the data that you have so that you can build these metrics and KPIs. Thinking about all the industries you’ve been in, in, in what you’ve seen, um, are there some KPIs kind of across the board that you would say that companies should focus on to drive growth and profitability? And, and if they’re not the, you know, how do they vary across industries as well? I guess
Greg Lopez:
If you’re, if you’re selling physical goods, consumer goods or, or B2B or, or whatever, um, if it’s a physical good, I’m a big proponent of, of looking at the contribution margin and the contribution profit for those items and really honing in on, uh, what your margins are. It’s really hard to remove costs from physical products. And everyone who’s worked in e-commerce built a model five years ago that said, once they hit some scale, magically your fulfillment costs are gonna go down. Your cost of good sold are gonna go down, your shipping costs out are gonna go down. Um, your shipping costs in are gonna go down. Uh, and the reality is, all that stuff has gotten more expensive, and you don’t have the amount of levers you thought you potentially had. So if you mispriced your product, it can come back to haunt you. So going back to the theme prior, you know, don’t mistake underpricing or, you know, insane value for product market fit because it’s gonna create a situation where you have to make a choice that, you know, do we become a viable business or can we continue to, you know, fundraise or figure financing, keep the unviable business going, which it could be a strategy.
I mean, look at like someone like Uber, right? They got such a big market share. We all love paying five, 10 bucks for a taxi ride. Now it’s 25 to 50 bucks. And I personally don’t use it as much as I once did, but maybe some people are still, you know, they’re just in the habit and just like, whatever. And clearly, you know, something like that’s worked for, for them. But, uh, it takes many years and you gotta get to a certain level of scale, and not all companies will will get to that point. So the more realistic reality is that they just won’t be able to close their next round of financing and, uh, unfortunately have to either change their business model so drastically that they churn customers, um, or, or something else. And then for, you know, B2B software businesses, uh, you know, sales cycle velocity is, is a huge metric to track.
And what that is essentially just how fast from open to close we get on a, a sale and then figuring out where deals are getting stuck and figuring out, uh, within that bottleneck, are there any threads that finance, via and analytical mindset could partner with sales and figure out how can we speed things up, uh, to close more deals? And then the most important just for any business is, is customer feedback. And, uh, sometimes startups, uh, are a little hesitant to ask for feedback because they don’t wanna seem too, um, needy or, or nascent or they don’t wanna bother their customer ’cause they have a good relationship and it’s, it’s a paying customer, we don’t wanna bother them. Um, but think about, um, you know, Amazon <laugh>, every product you buy, they’re asking for feedback. Was it good? Was your experience good? You know, um, and I think going back to, you know, you know, the ethos that Jeff Bezos has has put in Amazon, like their customer first, and they’ve kind of built their business on, on the backs of customer feedback and pleasing the customer.
So I don’t think anyone’s gonna look at you strangely if you’re, you know, asking for feedback or, Hey, if we built this feature, would you use it? Or, um, I personally do surveys all the time for when, uh, companies ask to do surveys and if they pay me even better,. And then the, the, the final piece in just tracking these metrics, we gotta define them, like I said earlier, figure out what the source data and data mapping is. But when you’re using those metrics, uh, and informing your financial model, uh, I’m a big believer of not overcomplicating things. I like to keep my variables focused on, uh, you know, 80 20 figure out exactly what’s a, a driver here for the business. And, and then again, it goes back to my other point. It’s like the financial statements, your models, they’re a reflection of reality. Um, you’re not gonna get bonus points because your forecast was like right on the money. Um, you’re not gonna get, uh, a promotion because, you know, some really fancy Excel model, you’re gonna get a promotion, uh, you’re gonna get noticed because you are someone who can partner with the business and business leaders, um, provide value, be a trusted advisor, um, provide, um, some level of, of accurate forecasting, right? Um, and, and do it in a manner that is, uh, you know, timely and and efficient.
Glenn Hopper:
Looking at the future, what do you think will be the biggest financial challenges that, uh, I guess financial and operational challenges that companies are gonna face in the next five to 10 years? We have, you know, on one end we have fewer people coming into accounting on the other end. Right now everybody’s talking about AI, specifically generative ai, how it’s gonna change the workforce. Um, how can companies and finance professionals, how can they prepare themselves to overcome these challenges?
Greg Lopez:
I do think one of the bigger challenges that, uh, firms are gonna face in the next couple of years is just retaining and developing talent, which leads into, you know, as an individual, uh, you should be staying on top of the latest tools and technology. And I, I know it’s hard because we all have day jobs, but really playing around with these tools, and Glenn, I know you’ve done a ton of tinkering yourself, but, uh, you know, re-skilling and up-skilling, these tools will level the playing field for most folks. So, like I said before, knowing some fancy Excel formula, in probably six months from now, I’ll be able to just in plain English, uh, explain what I want to do in an Excel model. And copilot will be able to output the assumptions and, and output the, the formula for me. Alternatively, you know, the, the threat of cyber attacks, the more digital businesses become, the more of a threat tools, uh, pose for, for cyber attacks or customer data breaches. As a finance person, making sure we have the right controls in place and the right insurance lines in place to protect ourselves and our firm. Uh, it’s just a big risk that I would be focused on, especially for, for companies handling a lot of data, especially customer data.
Glenn Hopper:
Yeah. Makes total sense. And I, you know, and, and also, uh, with cyber attacks, you know, when you have, um, algorithms kicking out and kicking off more of these attacks, I mean, I think it is, you know, it it’s that arms race between the security side and the hacker side. The need for security goes up proportional to the powers and abilities of those who are, uh, doing the cyber attacks. We’re getting close to the end. So I’m gonna go three question lightning round. We always try to get these in, um, at the end of the show so we can get a little bit of the, uh, personal side of everyone. Um, I guess, uh, first off, what is something that, uh, not many people know about you? Something that maybe, uh, you know, they couldn’t find by, by googling you or, or looking you up on social media?
Greg Lopez:
I’m a big junkie for pickup basketball. So, uh, one of the, I just moved from New York down to Atlanta, but in New York, whenever the sun was out and it was decent weather above 65, I was down at Brooklyn Bridge Park, uh, trying to get a pickup game in. Uh, and the, one of the first things I did down here, now that I moved to, uh, the Atlanta area is find a couple courts where folks gather and, and get games going. And I think it’s, uh, it’s just interesting ’cause it, it’s kind of like, it, it it’s kind of related to like going into a startup and trying to figure out, you know, how I can work with these people that I don’t know and, and figure out what they’re good at, what they’re not good at, and, uh, how I can play off of them and um, partner with them. I think it’s definitely helped me professionally kind of roll into a, a situation with strangers and then try and win a game, um, against other strangers, <laugh>. And you have to be really, uh, perceptive about kind of all things that are going on on the court. That’s
Glenn Hopper:
Great. That’s great. And I love the idea of just, yeah, like you said, it’s, it’s dropping into a new environment. You’ve gotta figure out what’s going on with people. You’ve gotta establish trust. You’ve gotta learn who you can trust there and who your go-to people are and who people maybe, uh, you know, maybe you don’t need to make that pass to them ’cause they’re gonna jack it up from <laugh> from 30 feet back and <laugh>. It’s, it’s also,
Greg Lopez:
It’s also knowing and having self-awareness of where you, you fit in, right? Do I have to take over or am I not the, you know, the best player right now to take the shot and, and maybe give it up for a better shot, right? Uh, I think that’s important too. ’cause in, in a business sometimes you have to kind of take the ball and run with it yourself ’cause you don’t necessarily have that full trust or you’ve given and handed off tasks prior and they haven’t been done up to your standard, right? So it’s like, it just, it’s just really interesting dynamic.
Glenn Hopper:
Alright, this is the big one. Uh, if you’ve listened to FP&A today, you probably knew this was coming. Uh, what is your favorite Excel function?
Greg Lopez:
Yeah, so I’m gonna actually flip this one on on you. And I think we should change the question to Excel function or feature because for me, uh, recently I’ve been doing a lot of scenario planning and modeling for my clients. And one of the features that I came across, which I didn’t know about until recently is this, uh, watch window. So you can just go into the search bar on the top and type in watch window and ultimately what it does is you can select one cell or a handful of cells and you can even make them named ranges. Uh, so for example, ebitda, you can click your fiscal year EBITDA and then go onto another tab or change all your assumptions. And this watch window will change the EBITDA figure based on the assumptions. So rather than flicking back and forth or having multiple tabs open or multiple models open, you can kind of scenario plan on the fly and you could do it with as many outputs, uh, as you’d like. So it’s been really helpful, you know, sitting with a CEO or sitting with, um, uh, a founder and saying, okay, well here’s what the baseline is and then if we change a couple things here and there, here’s what it looks like. Uh, if we make a couple hires sooner than we thought or we, uh, have a higher marketing cost or conversion cost or whatever, um, it’s just really, really powerful.
Glenn Hopper:
See, and this is why we asked this question. I’ve been, I’ve been using Excel since, you know, before the days of Clippy, you know, <laugh> and I, I was not familiar with the Watch Window, but, uh, now I’m, I’m excited to, um, open up a model and, and geek out and watch that. I guess just the last question, um, you know, you know, for listeners of the show and anyone out there, uh, what’s the best way to, to get in touch with you?
Greg Lopez:
Uh, probably LinkedIn, um, but I’m also on, on X. Um, if we call it X now, uh, you can find me at gLopez tweets, um, or you can email me at uh, glopez@eventusag.com.
Glenn Hopper:
Okay. Well, Greg, I I really appreciate your time and we’ll, we’ll put that contact info in the, in the show notes and, uh, just great having you on today and getting your insights and, uh, wish you the best of luck. Thanks
Greg Lopez:
Glenn, appreciate you having me.