Casey Woo is a serial high Tech CFO turned investor. The Harvard educated financier “escaped” a life as an Investment Banking Analyst, at Morgan Stanley to take a big pay cut and join a 10-person startup (“If you wanna do tech, you gotta go to the Bay Area”).
Since then, he has held finance at CFO roles including at WeWork and property tech company Landing before founding an “operators community” turned investment fund FOG ventures.
In this episode Casey talks to Paul Barnhurst about his journey:
- How finance was seen as a “second class” citizen when he entered Silicon Valley and how he had to “learn a new language”
- How he built up the Operators Guild “a club of number twos” ( finance, ops, HR, talent, legal, IT) into an exec community of 700 leaders who now run the FOG VC
- What good FP&A looks like at an early stage company
- When early stage companies are making $200,000 $300,000 total is when FP&A can be a powerful addition
- Why FP&A leaders need to focus on business first rather than finance first
- The CFO’s future as the Office of Business Intelligence that will separate the The Ancien Régime CFOs with those who can adapt
- If CFOs are not “pounding their fists on the table” asking to own data they will not survive
Watch the full show on YouTube
Read the full transcript and blog
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Paul Barnhurst:
Hello everyone. Welcome to FP&A Today I am your host, Paul Barnhurst, aka the FP&A Guy. And you are listening to FP&A Today. FP&A Today is brought to you by Data Rails, the Financial planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis and discuss some of the biggest stories and challenges in the world of FP&A. We’ll provide you with actual advice about financial planning and analysis. This is going to be your go-to resource for everything FP&A. Today I am thrilled to welcome our guest, Casey Woo. Casey, welcome to the show.
Casey Woo:
Thanks for having me, Paul.
Paul Barnhurst:
Yeah, really excited to have here. So a little bit about Casey. Casey is located in Silicon Valley. He went to West Point and then he graduated from Harvard studying economics. He started his career and spent the first 10 years working on Wall Street, worked for Morgan Stanley, also did some hedge funds, some of the Tiger funds. Last 10 years, he’s been working it as an executive leader across the gamut with a number of different startups, both as a CFO and a COO, multiple different stages. And he also is the founder of the Operators Guild, which is a preeminent operator guild around the world. He’s also part of Fog Ventures, and I’m going to go ahead and ask him to just give us a little bit more about his background.
Casey Woo:
Thanks Paul. And he did a pretty good job. So as you mentioned, my 20 year work history kind of breaks into first 10 years as military, and Wall Street, so pretty classic sell side path. Go to the island called Manhattan <laugh>, get a banking job at Goldman Sachs or Morgan Stanley which is amazing training ground. I was at my half my groomsman there. I had my wife there and I learned how to be very good at Excel without a mouse. Those are lifelong things that you take away from that two year program. And then of course after that, most people go to buy side private equity or hedge funds. I chose the hedge funds side. Long short fundamental equity covered consumer retail. So super fun. We’re talking about Mattel and Hasbro and Under Armor and all the consumer products. So I learned a lot about consumer psychology and just had a lot of fun there.
But then after being in Wall Street, which was like what you strived to do for so long as an economics major, you’re told that’s the pinnacle. And I was very fortunate, I would say at via Central Park, my corner office was bigger than my shoebox apartment. There’s really nothing to complain about. But I was really unfulfilled and it took me a while to figure out why. And why was I realized I missed my team. The military’s a team sport. Banking is a team sport. Hedge fund investing is not. So when you tell me corner office, I think lonely.
Casey Woo:
I don’t actually think, cool, don’t get me wrong. The office is cool. The second thing I realized in hindsight is I’d love to build things which I think operators understand that. As a lawyer, banker, auditor, investor, for the most part you transact. You advise, consultant, but I realized I wanna get in the action. So anyways, after 10 years, I took a big pay cut, joined a 10 person startup FinTech SaaS in New York or Silicon Alley. And I loved it. I like, it’s like what gives you energy? So from there, I had a mantra, if you wanna do something, go where the best in the world are. If you wanna cook, you should go to Paris. You wanna invest, you should go to New York, you wanna do film, you should go to LA. If you wanna do tech, you gotta go to the Bay Area. So I came out here, I learned very quickly, finance was a second class citizen.
And I know that because I mean one of the, oh, well I, I’ll leave this decacorn more than a decacorn startup, unnamed as they were, 65 people I went in, they kicked me out and I was just looking for, I like, I’ll take any job here, I wanna work here, don’t care about the pay. And they said, you don’t have a CPA so you don’t qualify for finance. I’m like, I don’t even know what or where to begin with that statement as an investment professional on Wall Street. So basically you go from top of the totem pole finance, air quote finance in Wall Street to, Hey, here’s my meal receipt. Are you the bookkeeper? Which, but once again, nothing wrong with bookkeepers, but that’s not what I do. And if you ask them what a controller or CFO is, they would say the same, right?
Being a little facetious here, but that’s sure essentially what it was. And there I always say there’s, there’s three people that matter in Silicon Valley, when I came 10 years ago, the people who fund it, VCs, the people who build it, product engineering, the people who sell it, sales and marketing. Notice I did not say finance, ops, HR, talent, legal, IT, “back ops”. So anyways so to fast forward the story I got lonely and I said, you know what? I changed careers, doesn’t mean uphill battle. And I was invited to a group of nine people that were VPs of Finance and ops who shared this misunderstood, misfit mutant feeling. And I said, hey, do you guys wanna just meet every month, create a little support group think of it like a mom’s group. Same thing. Shared hardship. And they said, yeah. I said, okay, cool. And co-founded it who invited me to that much. And I sent her on a Google doc with I said, there’s only five rules. Number one, no promotion or solicitation. Number two, leave your ego at the door.
Number three, what’s said here stays here. Number four, give more than you get. And number five, operators only. That nine is now 700 today. We can go into that, what that is, but is one of the most amazing accidental communities that have been built. It’s called Operators Guild. So we’ll get into that later. But anyways, to finish my background, so for the last 10 years, I learned the hard way through almost every stage you can imagine. Seed, a, B, C, D, 10% to 15,000 some of the fastest company growing growth companies in the world like WeWork to companies that had to be spun down. And I fired myself and closed the door behind me all the way from SaaS, pure SaaS companies to tech enabled operating from marketplace to B2B to B2C from every sales channel, partnership, direct self-serve. So really kind of went through every time of battle on tour of duty I could. And then lastly, last two years Operators Guild created their investment arm, which is one of the coolest things that’s ever happened is we are the angel syndicate arm that only operators can be a part of. It has been incredibly successful and additive to both our tier one VC partners and to companies building the next operator toolset, especially CFO Tech. And that’s me.
Paul Barnhurst
Great. Now I appreciate that overview lot there. Sounds very fascinating. Why don’t we start a little bit, you know, talked a little bit more about your transition from investment banking, moving to corporate finance, but maybe a little bit of what that was like and what you saw as kind of the key differences when you made that switch.
Casey Woo:
There’s many, but I will share a big one, what I realized when you’re in air quote “Wall Street” banking investing for as long as I was, and that’s the only kind of jobs I knew besides the military, you think . You forget the fact that there’s different types of people in the world. Now what does different types mean? <laugh> type is not race type is not gender. I actually see people in, I mean in one angle is a corporate breed. Are you in the counting breed, the controller breed, the inside sales breed, enterprise sales breed. Are you the visionary CEO? are you the narcissist CEO Breed, are you the strategic CFO? Are you the corporate CFO? They all speak here it is punchline different languages. So my joke is you think you’re speaking English, I’m fluent in English. That’s not the language that’s spoken in startups.
So what I mean by that is to use these weird analogies I have is make it up. So if we’re all breeds of animals. In Wall Street, there is investors and executive assistants. There’s only two sides of breed. So let’s call investors rhinos, I don’t know. So when I’m talking to another investor, we’re talking the same language. I have a horn, do you have a horn? And it just, it’s all good. I stepped over to startups, it’s a zoo. I didn’t realize I was talking to a giraffe and then a flamingo, but I’m using my horn and all of a sudden I’m like, why aren’t we getting this done here? Why don’t you understand? So over time where I became a much more successful CFO and operators, I started to become Google Translate. I am now multilingual. If I’m speaking to controller, I have a very different language than an engineer, which is very different than the head of marketing. And all of a sudden things got done. All of a sudden life got better. So the biggest difference when you move from a banking Wall Street startup is a one or two species biosphere to a 50 species. And you better pick up languages fast.
Paul Barnhurst:
I love the way you described that and the analogy there and just the different languages. Being able to work with all kinds of different people to be successful. Because it’s so important. One of the great lessons I learned, I did a great leadership program when I used to be involved in a boy scout organization and they taught a lot about situational leadership and how you work with teams. And it’s just so true. Everybody’s different. At this stage you need to be doing this or with this type of person, you need to approach it this way. And that’s an invaluable skill. So I appreciate you sharing that because sometimes we hear the, hey focus on Excel or focus on this and those are all good things to have. But at the end of the day, if you don’t have a fundamental understanding of people and how different people think, you’re limiting yourself.
Casey Woo:
It’s all about people. In fact, when you know have these business books and these health books, I’m like, why is everything about psychology ? Wait, what happens to corporate finance and SWAT analysis? Oh, I learned. No. It’s all about influence, motivation, communication people.
Paul Barnhurst:
Yeah, I learned that the hard way early on. I pitched an idea early in my career and thinking, well, makes sense. So they’ll all buy into it not realizing actually how to influence people.
It was a disaster. And that was a reminder that yeah, it’s about influence. It’s not about a great idea. There’s a lot more to it.
Casey Woo:
You have a great example, which is you assume that you understood it and liked it, that they would, that means you assume they’re also the same breeding species.
Paul Barnhurst:
Yep.
Casey Woo:
But you’re right. If you need another, for example, if you’re an accountant and you like it, generally speaking, another accountant will think the same as you generally speaking, right? But if you talk to a salesperson, maybe not. So once you realize there are different breeds, all of a sudden the world gets more sensical
Paul Barnhurst:
To Totally agree. I appreciate that. So can you talk a little bit more about the operators guild? You mentioned how that started. You have 700 people. So maybe just give us an overview of what that’s all about and how that can help finance operators, FP&A people, that kind of thing.
Casey Woo:
Operators Guild is like any other association, it’s a shared hardship understanding group where there’s a very high relevance. So the demographics of the operator guild the middle of bell curve. So we have 700 people. The middle of the bell curve are director, VPC level seniority, it’s high growth VC backed companies. So mostly tech. There’s tech enable operating, but it’s not like coal lines and pizza shops, it’s more techy. 70% Bay area, 30% rest of world. And obviously the tech hubs, London, Miami, New York Boulder Austin, etc.. In terms of swim lanes of roles, we’re talking early state, CEO, CFO, COO, business operations and strategy and supply chain ops. And so of course and the roles beneath them. So, FP&A etc It has been an incredibly successful mission because it stemmed from a problem I was solving myself, which is one therapy. So if you think about it, moms have moms groups, alcoholics Anonymous, they have alcohol, they have a group. CEOs have YPO, the number of CEO groups founder group, right?
Where’s ours? Where is the omni air quote? Number twos? Number threes. If you think CEOs lonely, number twos are also very lonely or I know I’m using Air quote number two, but yeah number, we’re not the number one, right? So we have the same human needs, which is to be understood. So the other thing about operators, this demographic I just described, we are not sales, legal, engineering. What do I mean by that? Those are very clear what they are. When you say VP Finance and ops, no of course for people that don’t understand what we do, which is a lot of people finance, I know what you do. You do my T&E report. Oh I know what you do. You do DCF analysis. Oh, I know what you do, you do excel, you do the budget. No, anyone listening to this call will probably tell you that’s kind of what I do, but probably one 100th of what I do.
So, it is the simple misunderstanding, kind of like a mom’s group. You ask them what dads misunderstand what moms do, right? That’s why dads aren’t invited to mom’s group of, because it’s a very, very simple misunderstood, but we understand each other. So we’re this nebulous glue in the middle that is important but misunderstood. So anyways, operating guild helps with jobs. We share all the best jobs it helps with. Coolest thing is Q&A. So I did the math, 10,000 years of operating experience on a single email. The immediacy, accuracy, potency of answers that can come within an hour because the role is you can’t live every life. You can’t live every job. And we always are faking it until we make it right in a weird way where it’s a new problem. But together we can cover 90% of all your problems. By yourself, good luck.
So that’s really that we have incredible social events we’re built around friendships and relationships we’re not built around. Hey, the quarterly dues are coming up. You attending the Friday CFO panel. I never really liked that type of community. Yes we have dues because it costs something to run it, but it’s fun and it’s extremely helpful. And I think we have a very high MPS it’s been 95% word of mouth for seven, eight years. We don’t have a marketer or a salesperson. So anyways, it’s extremely organic and pure, authentic. That’s operator Guild. Oh and we’re in 22 cities.
Paul Barnhurst:
Sounds like a great program. We will definitely put that in the show notes. So people who wanna go look at that. I know when I knew you were going to come on the show, I went and looked at a little bit and it sounded fascinating so I really enjoyed hearing more about that. But something you said around operators, obviously I know you’ve done a the CFO role, the COO role, I was having a conversation with someone who works a lot in rev ops, runs a business around that. And we were talking about, hey, well where’s the FP&A end and what role is sales ops? And he’s like, someone should really put together a Venn diagram with kind of best practice of how they should be separated or some kind of framework. And we talked about it and I haven’t found time to do something like that. But I’m curious, what’s your take, and I know it varies between every company so much, what is FP&A’s responsibility? So how do you think about all that?
Casey Woo:
I know exactly the riddle that you are proposing. And I know by the way, this is why we exist as a group is because if it were an easy Wikipedia, look it up, we’d be understood. Of course we all know the answers. It varies. It depends on what angle you wanna cut it. But at the end of the day. I’m working on a medium post for this by the way. So I don’t have a lot of things to write about. But this one I want to document, which is basically the biggest distinctions between, and when you’re talking about where does it sit, the one cut is functional versus cross-functional. Cross-functional is HR, cross-functional is legal, cross-functional is finance, and then obviously functional is sales and engineering. So that’s a clear distinction. So for example, then it goes, what is the role of cross-functional? The role of cross-functional is a support functional. I am in service of my employees. Notice my customers aren’t the customers of the business as a CFO, my customers are sales are the employees are the CEO. Yep. So right there, that’s a framework. So when you say where’s rev ops? Well rev ops I think supports revenue and has a corporate lens. Sales ops supports sales. So sales ops sits in a functional group under the CRO.
Paul Barnhurst:
Yep. Right?
Casey Woo:
And they report to now for example, who owns commissions, not sales ops. But you can’t do that, right? You there, there’s a very general conflicts of interest and honest broker type framework. So where things sit in finance or central is what I deem honest broker things that require end-to-end visibility. Like LTV CAC can only be calculated by finance because marketing doesn’t have all that information and sales doesn’t have all that information. Finance can see it all can do it. So there’s also just the logical nature of if you wanna ask someone to do company KPIs or company related matters, they should sit in cross-functional because they need to access different functions and vice versa. So anyways, that’s not a Venn diagram, but that’s how I would start drawing it. I don’t know if I answered your question, but that’s .
No, you did. And that makes a lot of sense how you laid it out there. I get it. Which one’s? Functional, which is cross-functional, which needs to be at a corporate level, conflict of interest, kind of managing all those different things to help to decide this should slot down here, this should slot over there.
If you’re the FBI, you need to access all the 50 states. Yes. So you don’t sit in Massachusetts, you report to the federal government. And then so state versus federalists, it’s, it’s very similar though. Some states wanna get the federal power
Paul Barnhurst:
Truth to that for sure.
[Datarails ad]
So one more question here. So you’ve talked about Operators Guild, can you talk a little bit about Fog Ventures? Kind of how you got involved in that, how that came about?
Casey Woo:
Yeah, fog Ventures is probably one of the most fun things that came about from Operators Guild. So as I mentioned, operators Guild is now about 700 people. We are very Switzerland. What said there stays there. Community, no advertisement type of thing. Of course you have sponsors. What happened was just like what happened with HR finance started to matter. Now what do I mean by that? Who really mattered all the time was VCs, product engineers and salespeople. They’ve always mattered.
But the whole, are you an accountant? What does FP&A? Like HR? Are you the sexual harassment police? It is a very back officey non-strategic lens that for the most part in startups, that’s what that cycle class isn’t set was on. Over time that has changed. HR is now called People you know have half million dollar Chief People Officers at startups. It is a strategic C level C at the table function that reports to CEO. That is a nod to the value and recognition of the people function. What happened is that has finally happened for finance. We are no longer the, “show me how the book’s closed. Keep me outta jail people”. We are actually, oh my god, strategic bring in the room if we need to make a decision about something. Unit economics that matters. So the startup industry has gotten a lot more sophisticated where it’s not just about a good product.
Okay, what happened? You’re like, what actually about, what are you talking about? What happened? What happened was OG was a place for talent. VCs would reach out and say, Hey we have an opening for CFO or a COO spot. And all of a sudden it went to, can you take a look at this deal? I was like, why would I look at a deal? I’m a CFO. Because it’s a CFO tool. Hey Casey, it’s really weird. This is the seventh CFO tool that has been presented to me and the other six VCs that called you in the last month. And you just crack a smile and you’re like, we matter now. We matter. bill.com. Not good enough. NetSuite not good enough. Anaplan good 20 years ago. Wow. They have come to innovate for us. So the light bulb went off and they said, I said, they’re asking you because we’re not CFOs.
So how do we validate this? And I turned to my operator friends, I said, who wants to Angel invest? And the coolest thing happened. We created Fog Ventures. It’s separate than Operators Guild. You don’t have to be part of Operators Guild to be part of FOG. FOG stands for For Operators Guild. And it’s kind of cute right in San Francisco fog. But anyways, it’s super fun because most syndicates are money pools. So for example a DoorDash syndicate or an Uber syndicate or fantastic. But their association is, they’ve worked at an employer. Ours is designed to be a persona. So the only people that can be in fog are operators. Mostly CFOs, COOs, CEOs, heads of people. Why does that matter? Because as a syndicate, we are an incredible distribution arm or advisory arm. So if you’re building a HR product, a CFO product, an FP&A product, an operator product, who better to pitch to than 700 CFOs And CFOs who also wanna invest in you. So it’s kind of like, I don’t know, a new mom’s product. You pitch it to a mom’s group and tell you they’ll give you the real feedback you want. And by the way, if they pull out their money out their pocket to invest, that says a lot.
It’s a no brainer. It is immediate validation, it’s great feedback. And by the way, then the VCs follow, oh all the moms like the new mom product. That is what matters because everyone pitches that thing matter. So anyways, ask the customer. So we bottom line is we invest SPV deal by deal into the best companies in the world, alongside tier one VCs who are kind enough to invite us because of the value add we bring. So a truly strategic, valuable check, any operator can be a part of it. There’s no commitment. You can just be able to watch it’s servicing the operator community.
Great. No, thank you for sharing that. Sounds like two great organizations came out of that and it’s probably shaped a lot of your career, helped, you know, do a lot of exciting projects beyond just the day-to-day work.
It’s been really fun. That’s a key word. It’s a super fun for all business. Have fun.
Paul Barnhurst:
That’s what we all want. We all wanna have fun. I mean we wanna enjoy what we do. None of us wanna be miserable. So that’s always good to have those type of projects. So I’m curious, you’ve been a CFO, COO C-level roles at a couple different companies here. Number two or number three in air quotes as you put it. Did you always wanna be that was or did it just kind of happen? Yeah, it’s that come about.
Casey Woo:
It’s a really good question. I love teams. So I’m a very kind of team oriented for the team. So to me CFOs, CEOs is very in support of, and so there’s that, I don’t know, enjoyable selflessness. I don’t like spotlight generally. So kind of like just do my thing. I love to build, I love to get things done. I think when it comes to being CEO, I think that if that’s what you’re implying I deem CEO as a whole another level of commitment. And this sounds weird, it sounds obviously you’re committed, but to me generally I think a CEO’s founder. So maybe that’s my distinction. Sure.
That’s like a five, 10 year commitment in my opinion. That is, you gotta be so passionate, it’s mission driven. That’s what for me to be wanting to be a CEO, it’s a mission driven bleeding in coming out of my pores. It’s not a job. Because I am that loyal that if I was to start or take money from someone I’m taking it all the way. And I haven’t found that yet. Now maybe it’s called Fog, maybe it’s OG, but that’s why I haven’t. But I definitely thought about being a CEO or leading something, but it needs to have the passion first and the mission first
Paul Barnhurst:
That I get what you’re saying there. And I totally agree. You wanna have that passion or mission. I know I always wanted to do entrepreneurship, but until I found the right thing, I was like, I’m not going to just go start a pizza joint so I could say I have my own business. Exactly. Sure I can make 80,000 work twice as many hours and I can go make 150 somewhere else. So why would I do that and why would I? And I wouldn’t like it.
Casey Woo:
The beauty of finance is such a portable skillset to help other people’s visions. And so I get to see and build many different visions that’s really fun until I have a vision that is more exciting than any other that I wanna do. So the other way is where CEO is not, it’s weird, CEO is not as portable as CFO. Mm-hmm Right? There’s a specialty to it. This goes back to the specific mission or passion and that’s another reason why I stay where I am. Cause I’m having a lot of fun.
Paul Barnhurst:
Well that makes sense. Stay where you enjoy it. So next question I had for you. You mentioned you love to build. Is that kind of why you’ve been mostly startup community, your whole career is really kind of scaling companies? Sounds like a little bit of a passion of yours. Obviously the operators guild fog, you just really enjoy that stage of companies.
Casey Woo:
I I’ve spoken to over 1000 operators convinced that “breed” air quote, we love to build. We don’t like to come into places that are not growing or changing. We don’t like to have no impact or little impact like corporate cogs in the wheel. That’s why it’s generally earlier stage, sometimes, not almost all the time, some dysfunction is something that needs to get changed or fixed. But fast growth equals change equals whatever you was working yesterday, it doesn’t work anymore. Translation build a new thing. But when it comes down to it, it’s problem solving. It’s the challenge of got a problem, how do you operationalize it and dissolve the problem. Oh here’s another one. And what if you do that and love that. It’s like a hunting dog. If you stop hunting you get bored. So people look at it as work people look at it as a grind. Is it a grind for a hunting dog? It’s just what they do. It is what they love. So that’s the analogy is when I got a long sabbatical, I lasted four weeks.
It supposed be nine months because I realized I had more anxiety not hunting so to speak, not building than relaxing every day. So it’s just like a passion and I think we all love
Paul Barnhurst:
It. Yeah, no it’s obvious. I can see the passion as you talk about things and the excitement you bring. So it’s very clear you enjoy it and that I love talking to people like that because it’s so much fun. I learned a lot. So that’s great. And I know our audience will sense that passion as they listen to you speak.
Casey Woo:
You are a very successful builder, mean what you’ve built is very impressive as well. So congratulations.
Paul Barnhurst:
Well thank you. I appreciate that. It’s been a lot of fun. I’ve really been enjoying it. It’s been a great journey. Kind of speaking of building and obviously working with some startups in early stage, how do you think FP&A departments are different in a startup? What’s kind of the key role and how do you think about some of that? When
Casey Woo:
You say start up, I think you’re referring to how a stage, sorry,
Paul Barnhurst:
Early stage companies, when is the right stage? Is company startup up to have FP&A? How do you think about it in those early days of a company and as they start to scale? Yeah, so just that part.
Casey Woo:
So I think there’s two aspects. One is that which every company needs. And the second is that which is specific to a company. So the first one, I mean I’m sure we can all guess chart of accounts, just organizing your data, cash in, cash out and an operating model. So whatever you are, you’ll probably need those. If the questions when to hire, it depends on speed and complexity. I think a big mistake of startups that are growing fast is they hire in-house accounting way too late. It makes sense in the beginning. Beginning of course it’s like the outsourced, right? Totally. Cause there’s like five people in one department. But as we all know, there’s an accounting debt, people, no, no, no pun intended. People talk about technical debt. There’s accounting debt, there’s finance debt that people forget about. And that debt builds a lot when you’re not paying attention to it.
So I think in the very beginning, a senior manager, someone in-house that is full-time control of the books, who understands the business is well worth it. One of each one, FP&A, that’s it. Now generally FP&A is sometimes is owned by the founder, but if they’re not financially savvy or that I think it’s worth it to hire a manager level at a minimum and that’s it, right? So it sounds like a lot, right? Wow. There’s two people, they probably make $200,000 $300,000 total if you’re talking about bay area startups. So obviously you gotta wait for that, but the minute you can, they’re well worth it. Or an outsourced personnel build operating model. So the operating model chart accounts after that. I always look at the business, some businesses are payments businesses, some businesses are marketplaces. So you need the merchant side, some are fraud related. Well guess what?
You have to backwards solve. So if you’re collecting merchant payments all the time on behalf of them, etc., you need a team that just does that. So there’s a specialist that needs to be hired for that. Uber needed a lawyer needed general counsel immediately, right? Because that’s what their thing was there. So after that, it’s very bespoke to the company and of course it’s growth based. So at a certain point we all know one person can’t be doing AP and AR so they split it and et cetera, et cetera. But at the very basic, one person had to do the model and forecasting the other to get all of the data reconciled and lined up in the way the business is represented.
Paul Barnhurst:
That all makes sense and I think a huge challenge you mentioned starting with that chart of accounts. I can’t tell you how many CFOs and fractional CFOs I talk to that they go in and spend the first six months cleaning up their data before I can build a budget because the accountings a complete mess.
Casey Woo:
Because they use an outsource person part-time who doesn’t know the business. But one joke I remember is I came in, I look at the p and l and it was an outsourced account and it was great. And yeah, everything’s working great, we don’t need to touch accounting. I was like, I think we need to bring accounting in. And all of a sudden I was like, oh my god, we spent $300,000 in office supplies like last month. And then I clicked it and it was AWS.
Paul Barnhurst:
<laugh>. Yep.
Casey Woo:
I’m like, I mean come on, let’s get in-house, spend another $10,000 and get an in-house person.
Paul Barnhurst:
That totally makes sense. I’m a big believer now, especially as finances become much more strategic, as you’ve mentioned, that seat at the table, you want it earlier. You want someone who can bring that value and can bring the economics and the financial perspective to the strategy because they’ll notice things that people who aren’t financial won’t notice. And so they can bring tremendous value when you allow them,
Casey Woo:
Right.
Paul Barnhurst:
So what do you think is the kind of the most critical thing for FP&A to be successful, especially in the earlier stage companies, kind of the venture backed, a lot of where your experience is what’s most important that FP&A needs to do to make sure they have that seat at the table and they’re really helping the business move forward versus being back office.
Casey Woo:
I sound like a broken record if you ever heard me talk about this topic, but this is my answer to all of it. I have a mentor who I borrowed this from. So the analogy is the weather. There are I think there’s four levels. There’s an underground level and there’s level one, level two, level three. So think about a pyramid. So under the ground level one is data. Just getting that data right? Okay. And so clearly the pyramid stacks, right? So you need one layer after the other. Okay? Level one report the weather. What happened yesterday? You need that data underground. Got it. So level one, get that right. Level two, forecast the weather. Is it going to be stormy? What do you think? Now everyone gets that right? I Ironically, it’s extremely hard to do level one and level two. Sounds easy for all the reasons we know, it’s not easy. Also the business changes. So the infrastructure changes. So all of a sudden you go back to underground and level one gets messed up, then you can’t do level two because you don’t have level one, blah blah. But guess what? So the answer to your question is the ultimate goal of “FP&A” or I would call finance because we’re a team obviously. Level one is accounting, right? Level two is FP&A, is level three, influence the weather. Change the weather.
It’s okay to say yesterday rained. It’s like, yes, I know it rained yesterday, I got that. Cool. Right? Tomorrow’s sunny. Okay, that’s interesting. Or Friday’s going to be really bad. You know what’s really powerful? Friday’s probably going to be really bad, but if we do this, this and this, it can probably turn it to be sunny or Friday’s going to be really bad. Let’s buy some umbrellas and prepare for it. That is super helpful. That’s called strategic. That’s called get a seat of the table. Okay, so stop the analogies Casey. Okay, so level three is influence and change the word. Okay, what does that mean? There’s two categories in my opinion of a report. If you produce anything, think of it. It’s either category one or two. When you show it to someone, category one, good to know. Interesting.
Category two. Changes their behavior. You want as many category twos as possible. So what is being strategic? It’s two components, two requirements. One, it’s doing something that will change someone’s behavior. That’s requirement number one. And number two, a material impact is made. Examples are, I’m going to completely make something up. We just went through all the data and the P&L realized that, by the way, did you know all of our best customers come from Minneapolis? Wait what? Yeah, by the way, they all buy on February 3rd for this. I So all the money we’re spending in every other state, I say we just triple down on that or replicate it somewhere else. Okay, one definitely going to change people’s behavior immediately. Two makes a big impact. That’s strategic finance. Vast majority of finance unfortunately is category one. We’ve seen it.
Paul Barnhurst:
Oh yeah, we’ve lived it. I, I’ve lived it
Casey Woo:
I try to avoid that with my teams. We don’t bother stakeholders with stuff that’s like pie charts and what’s the point, what are you trying to tell me right now? And why? By tell me how do you wanna change my thinking? How do you wanna change my, how do you wanna reinforce something? One chart animal pictures have a big picture of an elephant and on the bottom it says elephant. Make it very clear what you’re trying to explain. Okay, so simple, impactful behavior-changing. That’s strategic finance. But it requires data, proper accounting and reporting. Great forecasting. So once again not, I’m not in any way trying to say that less or more. All of it is required to get to level three. To get to nirvana you need the whole stack. So that is my answer to how is FP&A get a seat at the table?
Paul Barnhurst:
Yeah, I’ve definitely seen that. If you don’t have a solid foundation, it’s really hard to be the strategic finance partner. And I lived in a company that our data and things were just, it was a mess. And I spent so much time on that, it made it really hard to be able to do all things I’d like to do. I did as many as I could, but you only have so many hours in a day. And so it limited the ability to truly be effective. And I think that’s what you’re getting at is without that foundation sure, can you make a difference? Yes. Can you make the difference you need to. No, you’re going to be limited.
Casey Woo:
I guess that another way do not under invests in the controllership. Yeah, do not underinvest because they think it’s accounting. Just account for stuff. Accounting is probably one of the most underappreciated, misunderstood roles of all the finance cousins. So I don’t underappreciate it. So I make sure to really invest on my team and guess what? It pays off massively. My FP&A team looks a lot better. Why? Because they have a very strong data set.
Paul Barnhurst:
I’ve said this on LinkedIn a couple times. The best friend of an FP&A is a good accountant. That’s right. That good partner. I love when I was working with somebody that could be like, Hey, what’s going on here? And we could talk through things and hey, how should we manage this? Or why did this happen? Let’s fix it for next month. Versus, well I was just told to book this entry or whatever when you had that strong, it makes a big difference. I’ve seen it again and again in multiple roles. So I I’m a hundred percent with you on that.
Casey Woo:
And the other one, this will be a much shorter answer. Business first, finance second.
Paul Barnhurst:
I would agree
Casey Woo:
Finance is a tool. So whoever out there, if you’re a finance air quote person, think business first. So what’s the purpose for the business of whatever I’m doing? There unfortunately are times where people just think finance first, finance second, finance third. It’s like if you’re hammer, everything’s a nail. Sometimes you don’t need to it. It’s not a hammer, it’s a wrench. So always think at the end of the day we service the business. So the best FP&A leaders are business first, finance second.
Paul Barnhurst:
And kind of an example, a little bit different, but I supported a business and every about once a quarter sales commissions were due the same week as the budget. And they’d always call me and go, why is your budget late? It’s like, because I’m paying people first. Do you want me to not pay them I am happy to drop it And do the never once do they say yeah, finish that budget first. Don’t pay our salespeople. And that’s the example. I was like business first, I don’t, they can get mad at me, I don’t care. I’m going to pay the people first. Because that’s what matters.
Casey Woo:
At the end of the day, we all service a singular goal is the business.
Paul Barnhurst:
So that’s kinda my analogy to that that I dealt with. So we’ve been talking for a while here and just have a few more questions for you then we’ll let you go. Next question love to ask you is what do you see as the biggest opportunity and risk for FP&A today? So what kind of the greatest opportunity and risk out there?
Casey Woo:
Oh, it’s a goodone. I’ve heard the opportunity one, I’m ready for that. Risk is an interesting one. The opportunity is, I’ll just say the blanket statement. I think the office of the CFO is going to evolve into the Office of Business Intelligence. For the longest time and that’s because of lack of tools, lack of the respect and understanding of what it can be, which also is a circular reference to the ability to provide the insights. That’s changing now. It used to be things were so manual that it took so long to even close the books before you could even forecast that. Finance always trailed the business. So of course they’re not at the table because they’re just busy doing something at the back and chasing sales and chasing the CEO’s vision thanks to technology, thanks to data automation integration and what I would call self reconciling systems. Stripe, HRIS systems like Rippling, those systems are actually an amazing forcing mechanism to organize your data. They’re all self-organized, you have to tag someone’s location. Guess what? There’s all databases. So what’s happening in the tech world, CFO tech world is all those systems are going to start talking to each other. Then instead of spending 80% of your time munching things together in excel
Spend 80% of the time reading the insight. So real time insight, the CFO function will come from the dark ages into the light because what people forget about is a lot of metrics and a business health must involve money. People talk about the product usage. That’s great. At the end of the day, someone even said, I think strategy and money are the same. If a lot of people talk about strategy without P&L, at the end of the day, a business, let’s call it what it is, generally just has to generate a profit, right? That’s generally speaking. But my point is strategy without finance injected somewhere in there is not a full strategy. Unit Economics must have finance in it. So much insight now must have that follow the money. But the money part was always so delayed in getting reconciled to everything else that was already real time.
So once that happens, the office of the CFO could finally be not just the reporting monkey, but did you know and start to shed insights that the company doesn’t even know about. And that’s what I think is the opportunity for FP&A where you become a hero. You come in and oh my god, I love those sessions where I’m like, one of my FP&A members, members discovered something. It’s all you present it. And I just love the CEO down going, wow, that’s so helpful, thank you. And that’s, that’s opportunity. And that’s because we have the tooling and the start etc. Risk. Honestly maybe the wrist is no with what I say with responsibility. With privilege comes responsibility, getting it wrong. But to me that’s just a high class problem. But yeah, once you have the data it’s like, why didn’t you tell me about this? So the risk is that. But I think it’s all good. I think people under appreciate estimate the air quote “CFO umbrella”, they think of the CFO a boring I must know accounting thing. No, no. It’s going to be a really, really fun strategic function that sees everything.
Paul Barnhurst:
I agree with pretty much everything you were saying there and I just think we’re seeing a lot of that data. I saw something to said almost 40% of CFOs that were hired last year were first time CFOs. And one of the biggest things they look for is an understanding of data. And data analysis often sits now in finance. My last company, one of the first things the CFO did was move it back under him when he came in. We got a new CFO and he is like, that’s under me.
Casey Woo:
Bingo. That is one of the clear signs. If you have a strategic CFO or someone that’s more of the first regime. If a CFO’s not pounding the table, I own whatever data or BI centralized and well, I don’t even know how you’re going to be insightful. Well the other thing is, when I came in 10 years ago, I said, where’s all the data product engineering, which I get. I mean because they are the kings and queens. They’re the first classes and they have all of it, but they don’t have the money flow, so they can’t process a certainty. So anyways, I think it’s going to be shared between obviously product and sales and finance. But finance is finally catching up.
Paul Barnhurst:
Yeah, I mean, yeah, obviously it’s a shared responsibility. You have to have a culture throughout the company of data. But finance is a great place in that it’s Switzerland, it’s a support function. It doesn’t have, it’s not like sales where there’s often that agenda. I mean, not that there’s not an agenda, but it’s different. They’re very much supporting their function versus a cross-functional that can look at it and say, no, this is the right way to calculate it and here’s why. I know you don’t like that sales or you don’t like that product because it’s not as favorable, but it’s what we need to move forward. It’s the right way to look at it from an economic and financial standpoint.
Casey Woo:
Yeah. Cause the danger the danger of looking at KPIs too granularly is you missed a bigger picture. So by definition, if I had to pick a functional KPI versus a cross-functional KPI, I would pick a cross-functional kpi, which is finance or HR.
Paul Barnhurst:
Now I like that example. I appreciate that one. I hadn’t quite heard it put that way. So thank you. So a couple questions we like to ask here are a little more on the personal basis, get to know our guest a little bit more. So the first one is, what is something unique about you that you can share with our audience? Something we wouldn’t find online?
Casey Woo:
I’ve never traveled or lived alone in my life. I think I’m maybe scared of my own shadow. I don’t even know. I’m a flaming extrovert. I love the energy of people to an extreme. But yeah, I mean maybe you could see from my background, but I don’t think it’s an accident even though I, it is kind of inadvertent that I helped create a community.
Paul Barnhurst:
Yeah, could definitely, just from when I first met you, I could tell you’re extroverted, very open to talking to people and get excited and the energy. So that makes sense to me. I can see that. So I appreciate that. One next question. Datarails is our sponsor and they’re FP&A platform that’s built around Excel. So we like to ask everybody and obviously it’s finance, Excel has a huge role. What’s your favorite Excel formula? Feature or function?
Casey Woo:
Oh God. Like it. Ooh, that’s a good one
One. And don’t say merge and center. We had somebody say merge and center and he’s actually a Microsoft Excel MVP. It was pretty funny.
Formula function or what
Feature? Yeah.
Oh, pivot table. Pivot table. And we’re talking about Formula. I actually like SUMIF, Averge IF. I know I use it a lot. Pivot table.
Paul Barnhurst
Okay, we’ve had that one a few times. I’m a huge pivot table fan. I love Power Pivot. Now that you can,
Casey Woo
What’s your answer to that question? Is it Power Pivot or what’s your favorite function?
Favorite function? Well, first favorite feature is Power Query. Probably then followed by Power Pivot. I love cuz I’m always cleaning data. It just saves so much time. As far as functions, I love the new dynamic arrays. I’m a big X Lookup, unique filter. All these new ones, these shaping ones they’re building, I love playing with them
Casey Woo:
Them. Oh, sorry, unique now. Yeah, I Unique, sounds Unique is a Google sheet
Paul Barnhurst:
Function. It’s also an Excel now. Is it now? Yes, it’s new.
Casey Woo:
Sorry, I take it back. Unique. No, I, yeah, I love New, unique,
Paul Barnhurst:
Yeah, they changed the calculation engine when they came out with 365 and it’s now dynamic. So all the formulas spill automatically dynamically and will adjust, but everybody still thinks it’s point to point. So you have a unique, have a filter, you have a sort, X lookup, which is kind of a modern V lookup and now they’ve added a bunch of others. You can stack vertically and horizontally cables. You can drop things from your set. You could say, dropped the last row, take only the first three rows or the bottom three rows and start combining things together with all those formulas. It’s pretty crazy.
Casey Woo:
Alright. Right. There’s a few functions I probably love more, I just don’t even know what, but that was a very helpful explanation of dynamic versus point to point. Now that’s okay. Now I know.
Paul Barnhurst:
Yeah, there you go.. You can see ex I do a lot of Excel training. I’m an Excel nerd.
Case Woo
Yeah, totally. Yeah, with my role, unfortunately, I do less modeling
Paul Barnhurst
More. Yeah, I was going to say, if you’re doing a lot of that, I’d be a little worried. I would think you’re not doing your job very well.
I think it still get down and dirty, but I’m a little slower. And the new kids, so to speak, will crush me with these dynamic ones. I still love to code, just like how sure as an engineering leader, just get back in there.
Paul Barnhurst:
Yeah, no, sometimes it’s great to just sit there and get your hands dirty. Spend some time in the model. It’s not your primary role. And so you enjoy it when you get to do it, but if you’re doing it too much, there’s probably a problem. So last question here and then we’ll let you go. What advice would you offer to someone starting their career today in FP&A?
Casey Woo:
I cheat with more than one thing. Number one is focus on relationships. I think a lot of people go in thinking about competency. How good am I in Excel and how fast I can deliver things? So one of my coaches had a quadrant, if you can all visualize, as I say this. On the X axis is it’s warmer/cold kind of a personality. And on the Y axis is competent/ incompetent. If you are incompetent and cold, you’re done kind of done in this. If you are, obviously these are harsh words, I don’t mean them , but if you’re incompetent, warm, you’re pitied. Okay? If you are competent and cold, you’re respected, but don’t turn your back.
Paul Barnhurst:
Yeah.
Casey Woo:
If you are warm and competent, you win. So I think a lot of people find, so more analytical creatures, they’re, they’re more like seek and destroy. Forget about the softer things. And by the way, that includes me. I had to learn, hey, this thing called buy-in, this thing called working relationships. I was all about, I got the job done, the answer is this. I’m going to bulldoze you and this is the answer, let’s not talk about it and waste time. No, no, no. It is as important if not more important how you get there than where you’re getting to, than the destination. How you get there is more important than the destination. By the way how you get there can determine the destination. So anyways, that’s all wrapped into people, people, people, people, people.
Paul Barnhurst
Yep. I, I’m a big believer we call it soft skills. I’m not a fan. I don’t like that term. Soft skills. Yeah, yeah. But it’s huge, as I say. Yeah, technical skills will probably get you your first job.
Casey Woo:
That’s right.
Paul Barnhurst:
Your soft skills are going to get you promoted and again, advance your career without ’em. Limited
Casey Woo:
At the senior levels, it’s all relationship based. I’m not modeling anything. And so you said it really well get you your first job, which implies the rest. And instead of soft skills, you call it eq, right? That’s a very
Paul Barnhurst
Common Exactly. Yep.
Casey Woo:
All right. But high EQ can get you, I think, farther than high IQ.
Paul Barnhurst:
I agree. If you have to pick one of ’em, I’d much rather have the EQ than the IQ.
Casey Woo:
By the way. Bad analogy. Artists, they’re experts at EQ.
Casey Woo:
It’s all about psychology. I mean, if you can relate with someone, whatever, that’s a really bad example, but some of the best salespeople, right? Right. Some of best salespeople basically have the same kind of skillset. So it’s that connecting with people that is a skill. Excel is a skill too, but lemme tell you, I’d rather have people skills, right? So yeah, can you marry that with a good Excel skill background? Golden.
Paul Barnhurst:
Yeah. We had someone on the show the other day that has both of those and just phenomenal modeler, but great people skills and it can explain things just to a three year old, right? Talk to me, I’m five. And it’s just everybody gets, it’s like, oh, that makes so much sense versus let me give you the technical jargon here, and 20 minutes later you’re like, okay, can you leave the room now?
Casey Woo:
And the career practicality is you have more options to expand into things. You go to product, you can go to sales, but if you’re just really technical and hard, you kind of going to stay in that same swim lane, which is okay if that’s what you wanna do, but once you have people skills, people skills is across every role in the world. Excel skills is only part of 10% of the roles. So just think about that
Paul Barnhurst:
Great point. Well, I know we’re up on our time here, but thank you so much, Casey. I’ve loved having you on the show. It’s been a great conversation. I’m really excited to share this with our audience and I hope you have a great weekend there. Enjoy the Bay area and the FOG, and hopefully a little bit of sun. Thanks for having me. Thanks Casey.
