SaaS Metrics for CFOs to Elevate Strategic Growth with Mark Hansen

I'm always a little surprised how some people in organizations are not responsive. You're an FP and A. Just remind yourself that you are a cost center. You need to then add value the.

Way you add value is Mark Hansett is the CFO of Entrada. Mark was the head of Finance and Accounting at pluralsight and was the Corporate Controller at school.

Candy I view FP&A is kind of like the central nervous system in the business. Team member in FPA has partnered with every executive making sure good decisions are made. I do a daily standup with my team, understand what's going on, what are roadblocks, how I can be helpful. Great. FP&A is really involved in all the strategic initiatives of the business.

You gotta help develop and maintain all the SaaS metrics for the business.

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Hello everyone. Welcome to FPA tomorrow where we delve into the world of financial planning and analysis, examining its current state and future prospects. I'm your host Paul Barnhurst, AKA the FP and A Guy, and I will be guiding you through the evolving landscape of FP&A. Each week we are joined by thought leaders, industry experts and practitioners who share their insights and experiences, helping us navigate today's complexities and tomorrow's uncertainties. This week I'm thrilled to have Join me Mark Hanson. Mark, welcome to the show.

Awesome. Thanks Paul. Appreciate you having me on the podcast.

Yeah, really excited that you carved out some time for us and we were able to make this happen. And let me share just a little bit about Mark and then we'll jump into some questions. So Mark Hansen is the CFO of Entrada. Has been there since 2021. Prior to that, Mark was the Head of Finance and Accounting at pluralsight and was the Corporate Controller at school. Candy Mark also worked at EY as an Assurance manager. He has his Master's Degree in Accounting from the University of Utah and a Bachelor's degree in accounting from Westminster College. So, again, thanks for joining us.

Awesome. Thanks, Paul. Again, excited to be here.

Yep. So the first question we like to ask people, how would you define great FP and A? What does that look like to you?

Yeah, I'll start with a good FP&A. I think a good FP&A means that you have excellent relationships throughout the organization. I think good FP and A. And by the way, I think that's kind of the foundational layer. I think good FP&A is reasonably accurate at budgeting, at forecasting, at maintaining key performance indicators for the business. I think that's what good FP&A is. I think great FP&A is really involved in all the strategic initiatives of the business and providing, you know, excellent analysis and decision support for the various decision makers throughout the organization.

So if I'm hearing it, the really key difference between good and great is the great really is helping with the strategic and really get involved with making sure good decisions are made.

100%. Yeah, couldn't agree more.

Yeah, no, I. I think that's why I liked how one, I don't know if you probably have seen or use Grammarly. Yeah, everybody knows about that. So I had the opportunity to chat with their CFO recently and I never heard it so succinctly. He said finance. I think it applies to FB and A. He's like, our job is to help the business make better, faster decisions.

Yeah. Yep. Yeah, couldn't agree more. There's so many decisions to be made, and I think just making sure that they're being considered with that financial lens, understanding things like, you know, unit economics, things like gross margin kind of at a granular level. I think, you know, that the financial lens, you know, really influences a lot of decisions.

Totally agree. I mean, we've all seen it where, you know, someone thinks it's a great idea and you start walking them through it and the economics and you're like, okay, maybe this wasn't such a great idea, but on the surface it seems great till you really dig in and go, oh, yeah, our return is 15 years away or whatever it might be.

Yeah, exactly. Yep, 100%.

Yep. So you worked for EY for six years as an assurance manager. Maybe talk a little bit about that experience.

Yeah, happy to. You know, so in my view, I think there are certain jobs that can, that can propel you or really fast track your career. And what I mean by that, Paul, is, you know, spending five years or more in these jobs will really make you eligible for certain positions that when you leave may have only been available after, you know, call it 10 to 20 years of industry experience. And in my view, working for a big four accounting firm is one of these types of roles. There are others out there as well, I think. You know, I probably put investment banking in that category, private equity, working for one of the big consulting firms, maybe working for some of the larger law firms, you know. And although these, you know, routes, if done well, you know, do result in a fast track, they do require significant, you know, kind of dedication of time. During those years you're going to work a lot, like that's the simple way to say it. So I worked here at EY in the Salt Lake City office a long time ago. I love my experience there. You know, I worked on a wide range of companies. You know, before we started recording, you and I were talking about a nuclear services business that I worked on. I worked on a hardware business, software business, an airbag manufacturer, like really just got exposed to a wide range of industries. I studied accounting in college, as you mentioned, but I really learned how accounting and finance works. You know, at ey I truly started to understand how businesses work and what high performing finance teams look like. Maybe most importantly, I developed an excellent network there. You know, David Jolly was our office managing partner. He's now the CFO of domo. Sean Goff, Howard Stoker. They were a couple partners I worked a lot with. They're still at ey. Tracy Christman's also somebody that I worked a lot with. So just, you know, really important relationships and a network of people. Some of them are still out EY and in public accounting, a lot of them have left and gone to do other, you know, kind of really cool things. So for me it was really just a fast track. They were busy years, hard years, maybe even some years I didn't like. But overall just set kind of an excellent foundation for my career.

Yeah, no, and I've heard that a lot. I agree with you. Big four investment banking, consulting, you're going to be worn out when, whenever you decide to leave. A lot of people get burned out because you work a lot of hours, but you also cram a ton of learning into that time, different industries, and get to see a lot of things that, like you said, can help fast track the career. So if that's really the focus and those fields interest you, it's a great way to start. You just want to go in eyes kind of wide open, so to speak. So you're not like, oh, wait, I didn't expect to work more than 40 hours. Why am I still here?

For sure.

Yeah.

And I think, you know, those models are definitely more of an apprenticeship model. So I think, you know, a lot of people like that, that you do have somebody that's kind of a mentor, that's training you, that's done it before. Promotion tracks are, you know, pretty laid out, pretty guaranteed, you know, whereas as long as you do a good job, of course. Whereas kind of in the corporate world, I think, you know, kind of moving up in the organization is a lot more gray and undefined.

Yeah. I worked at one company where the joke was one of the offices I was at. The only way you got promoted was when somebody died in their chair because nobody left the roles and finally left the company. I'm like, okay, this is probably not the way for me to advance in my career. And I was supporting a portfolio of a product that had declined in 20 years, about 99% of its revenue within the overall business. It was one of the dying areas. I'm like, let me put two and two together. Probably not a way to fast track my career here.

You want to be in the growing area for sure.

So, I mean, great learning. But, yeah, it was definitely time to move. I'm curious. You've done quite a bit of SEC reporting. I know. I think all three companies you mentioned, pluralsight, Entrada and Skullcandy, have been public at one time or another. I think you're probably there. I know you're there for a lot of that. What was your takeaway from dealing with SEC reporting? How has that helped you, like, in your role today and just in general?

Yeah. So Entrada is still a private company.

They are. Okay. I wasn't sure on Entrada. I knew the other two were public.

Yeah. But definitely a pluralsight was public. You know, some of my time there, Skullcandy was public. And I think maybe for those that don't know, you know, SEC reporting is the process of putting together financial reports, like, you know, quarterly financial statements or 10Qs. Annual financial statements are 10Ks certain, you know, periodic reports, like, you know, 8Ks. And I think, for me, like, why SEC reporting matters is I think it just gives you that next level kind of advanced knowledge of how financial statements work and how financial reporting works as well. I think, you know, as a private company, and again, I'm at a private company now, it's kind of the minor leagues of financial reporting. And the major leagues of financial reporting is a public company. Right. It also gives you kind of a front row seat to work very closely with a CEO and CFO of an organization. Maybe even when you're still, you know, more of a junior role and then you have, you know, really active role on things like audit committee meetings, earnings call preparation. So I think again, maybe just back to, you know, kind of that foundational layer, like, you know, ey was a great start for me, an excellent foundation. I've kind of thought about my, my career like a bingo card. Like there's certain kind of experiences that I want to be able to check off on the bingo card to, you know, kind of enable me to get to the positions that I want to have. I think understanding SEC reporting is one of those things. Right. Like, it just helps you, you know, have a deep understanding of financial reporting. And I think it's evolved too. Where historically it was things around kind of GAAP only. And I think now concepts like ARR and other kind of what I'll call finance concepts are becoming more and more a part of SEC reporting.

Yeah, no, I hear you on that. So I'm curious, what's left on the bingo card?

I talk a lot to kind of our team at Entrada. We've got a very high performing team, very ambitious folks. A lot of them want to become CFOs themselves. About what are all those kind of squares on the bingo card to then ultimately become a CFO one day. For me, my ultimate goal was to be a cfo. I knew that a long time ago and so really was kind of checking boxes on the experience in a variety of areas for the last many years. So I don't know. I love being a cfo. I want to be a CFO for a long time. You know, I love to learn too. So there's still, you know, things I need to learn to, to be successful. But right now just happy to be a CFO and hope to be a CFO for a long time.

So that was kind of always going into it. That was the career, kind of long term goal for you. Did you know that coming into college or was it really just as you came out of school or when was it like, I'm going to be a cfo? That's the goal? Yeah.

It's interesting, like my grandfather was a pretty successful, you know, kind of small business person. He owned a bunch of sewing machine and fabric shops and he was very influential on me. He's like, good, go get a business degree. I'm like, okay, well what, what does that mean? You know, and he's like, well, if you want to understand business, you need to, you know, get a degree in accounting. Accounting is the language of business. Like, okay, I served a church mission in Brazil for a couple of years. I was the finance secretary for one of those two years. So that was kind of my first little step into finance. I liked it. I came home, was at Westminster College, and I had a really good professor, Alan, who was very influential on me. And he's like, well, you're doing accounting, you're gonna get your accounting degree. If you want to learn accounting, you got to go into the big four. It's the only way to learn. So I'm like, okay, like, I better go do this big four thing. So I figured out how to, you know, get into the big four. And then, like, once I got to the big four, I really started to see how businesses work. I saw, as I mentioned, you know, kind of high performing finance teams. I interact with a lot of CFOs. One that you and I talked about earlier. I was like, that's what I want to do. So I would say, you know, really at ey is where I developed that, you know, kind of passion to, you know, become a CFO and then just realize, like, hey, there's a certain series of events that need to happen. A set of skills and experiences that I need to develop to be eligible for that one day. I don't know that you need to check off every, you know, kind of letter on the bingo card. And some of them you can check off with, you know, kind of a. Probably a stronger check mark than others. But I do believe, like, you want very well rounded experience. It's not sequential necessarily either. Like, a lot of it is just based on opportunities that arise based on circumstances. You know, somebody leaves, you need to step in, you know, you change jobs. Like, there's a lot of different ways to kind of to get different letters on the bingo card.

It makes a lot of sense. It's no longer, you know, for the longest time you always hear you just climb a career ladder and the ladder's against that wall, and you just got to go up the rungs. But it feels like, you know, for many CFOs and, and other roles as well, there's a lot of this nowadays. It's not this. You have to go the straight path and this is the next role. A lateral might be best. Maybe you're going up, maybe you take a step back to gain an experience. Whatever it might be. Maybe you come from a totally different Direction. You see all of that with, I think CFOs today. And I think it's good, but it also sometimes is hard when people are like, well, what do I need to do? Well, there's certain skills you need to have, but you don't have to follow a certain path to gain those skills.

Yeah, that's exactly right. And you know, for me, I got my first interim CFO job which was very short lived, maybe a month, maybe two months, almost 10 years before I became a full time CFO. You know, so it took me a while, like from, you know, and I was an interim CFO a couple of times. So, you know, definitely. I think it's a long path. I think you have to be thoughtful about, you know, getting those skills and I think being proactive as well. Like, I have a strong view that you're in charge of your own career progression. Like you need to make it happen yourselves. Hopefully you can develop excellent mentors and stuff along the way that can help you. But ultimately it's on you.

And I love that because I mean, the reality is it is you hear people. Sometimes I just keep getting bad performance reviews. Well, like figure out why go to a different company or do something differently. Right. If you're just doing the same things over and over and complaining about the results and you gotta start wondering, are you the problem?

Yeah, exactly. 100%. Yeah.

So pluralsight, you spent several years there, you know, you're head of finance and accounting. Can you kind of talk a little bit about that experience and just in case people aren't familiar what pluralsight did, a little bit about the company?

Yeah. So I was at pluralsight for about seven years, got there when pluralsight was really small. Pluralsight is an online learning platform for technologists, you know, really focused on, you know, not beginners, but, you know, kind of professional level software developers, helping them stay current on their skills, which, you know, technology changes, you know, maybe as fast as anything. So it's important that they stay current. When I got to pluralsight, we were really small, maybe 30 to 40 million dollars in revenue. We had a very small finance team, very basic systems and processes. You know, the way I found out about pluralsight, you know, there never was a job. Posted a guy named Brett Barlow, who's one of my good friends, he worked at Skullcandy with me. He had gone to pluralsight, become the CMO there, told me about the role. And really, you know, kind of when I was at Skullcandy, we were a public company and I realized what I Wanted to do was really go to an earlier stage, you know, kind of software or subscription type business, grow up with the business and then ultimately help take it public. And you know, I guess I picked well in pluralsight, like I went there, you know, we were pretty small and really, you know, just experienced tremendous growth while I was there. In 2014, we, we raised $135 million in our series B financing, which I think that was the largest private funding round in Utah history at the time.

That's a big Series B.

That's a really big, big Series B. Especially at the time quality passes within a couple of weeks with an even larger round, you know. And ultimately at pluralsight, we did, we went public in 2018, you know, had a ton of fun, you know, kind of going through that process. Ultimately, you know, sold that business in 2021 to Vista Equity Partners. And you really just learned a lot there. Like, I think my title probably stayed the same, you know, kind of my entire time there. I like to use kind of the player coach analogy, you know, kind of for any leader. And you know, kind of when I got there, I was just a player. There was nobody to coach, even though I was in kind of a leadership role. And then over time, the team grew a lot. We had a super awesome team there. You know, tons of, you know, very smart, talented people just, you know, really enjoyed my time there. I think Aaron Skonner, who was the CEO, is a phenomenal leader. Learned a ton from him and had excellent mentors too. Like, you know, James Budge was a CFO that I worked for. James was an awesome mentor for me, included me in a lot of different things that maybe I shouldn't have even been included in. And then same same with Greg Woodward who was a CFO who hired me. So, you know, I've been fortunate to just be around a lot of good CFOs that, you know, have shown me, you know, how to do things, how to operate, and I think that prepared me well. You know, by the time I became a CFO myself, I'd already, you know, been an interim CFO a couple of times and had worked with a number of really good CFOs.

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No, the, the mentors and the people we work with have such a huge difference. Both the team that we manage and the people above us, particularly in helping develop us, are critical. If you're, you have bad bosses that aren't willing to help you develop, you still have to own your career. You might want to look elsewhere because good mentor and good development is just invaluable.

100 agree.

So I'm curious. You've mentioned a couple times gonna kind of go a little different here. You've talked about, you know, great teams and wanting to develop and make sure you have a great team. How do you develop the team and how do you think about that as a leader of just, you know, making sure you have the right people and you're doing the right things for them to develop and meet the needs of the business, kind of the whole leadership. How do you think of that side of things?

Yeah, yeah, I think this is really important and I think it's something that's, you know, never done and you're always, you know, worrying about, thinking about, you know, I've been fortunate to, you know, build teams really, at the last, you know, couple of places I've been, you know, pluralsight. The team was really small. Entrada. When I got to Entrada, there was an accounting team, but there was no FP and A team, no concept of FP and a, even though we were a pretty big business. So, you know, I obviously spent a lot of time in the hiring process. I want to understand, you know, kind of people's skill sets. I want to, you know, check references, talk to people that have worked with these people, been in the trenches, you know, kind of know what their skill sets are, what their personalities are. So I think that's, that's where I started spending a lot of time, you know, kind of on the, the recruiting process. I think from there then, you know, just spending a lot of time with, with the team. Like, I think, you know, communication is just so essential. I do a daily standup with my team. I have for a long time. I still do a daily standup every single day. Understand, you know, kind of what's going on, what are roadblocks, how I can be helpful, you know, spend a lot of time, what I'll say Just on tactical things, but then also make sure we're carving out time to talk about, you know, career paths. Like what is it that they want to do on their own bingo card? Where are they at? What experiences do they want to have inviting them to things maybe that they otherwise wouldn't be invited to? I think, you know, any person in a meeting usually has two purposes. Either they're there to contribute to the meeting itself or they are there to learn. So that when they are the ones in the meeting needing to contribute, they will know what it's like, they'll be ready to contribute. And I think that's really important just to start to get, you know, kind of different people exposure to, you know, kind of different areas of the business. Meetings with external stakeholders, bankers, investors, others. So I think, you know, something that I try and spend a lot of time on. I do, you know, a lot of one on ones both with my direct reports and I do a lot of skip level one on ones with people who aren't my direct reports, especially with, you know, kind of high performers on our team to make sure, you know, they're being heard and that, you know, kind of they're, you know, as they think about their own bingo card like they are, you know, kind of working on, you know, what they think is important for, for their own career progression.

Yeah, and I love you mentioned not just your direct reports, but those skip levels. I remember doing several of those over my career and it was always, it always felt nice that, hey, they've carved out time to talk to me like, I'm not their boss, I can pick their brain and they've kind of moved up a little further. And I always found those really valuable.

Exactly.

Good to hear you're, you're doing that. And I agree with you, a lot of it is spending time with the team, which just sounds like kind of going back to the hiring process. It sounds like you do a lot of really trying to understand who they worked with and things. When it comes to FP&A, is there one skill or one thing you're really looking for them to demonstrate? Is there a trait or a characteristic that really stands out to you when you're interviewing for that? Yeah, I think, you know, there's obviously.

You know, kind of two sides of the equation. There's, you know, kind of maybe IQ and eq. Right. And I think both are very important, you know, kind of within FP&A. And there's obviously different roles within FP&A. I think, you know, probably the most Important trait is that somebody is curious, in my opinion, like, because a lot of things can be taught, right? Like, if it's a smart person, you can really teach them anything. So if I had to pick one trait, I would say, you know, it's somebody that's curious, that wants to learn, that they know how to develop relationships, they can communicate. I think as you talk about, you know, kind of really hard skills, as you start to talk about, you know, kind of some of the more advanced team members, you know, I think modeling skills, which I know you spent a lot of time on, are very important. And obviously a lot of modeling still done in Excel today. I think experience with certain systems we use Adaptive, which is a workday product and a product, you know, some experience with tools around, you know, kind of FP and I think is important. And then I think even more advanced kind of data skills. Like in my view, the FP&A, you know, kind of team of the future, it's not just budgeting, forecasting, it's a lot around, you know, kind of modeling data analytics. And I think in my view too, like, I believe that FP&A should be the center of the universe for data within an organization. And so, you know, different data skills. I think, you know, things like SQL, you know, I think are important. I think, you know, different analytics tools, whether that's, you know, domo, tableau, whatever it is you use, I think, you know, those, those, you know, skills are super important. And I think, you know, the FP and A teams of the future, like that's what they're doing.

Yeah, I agree with you. Having those strong analytics skills. I was fortunate enough. I did report writing for a year, helped with the BI implementation, did a lot of SQL and it was invaluable throughout my FPA career to understand how data worked, be able to have those conversations and get how the tables and the structure and those type of things help so much. When I'm pulling reports and trying to clean up data and understanding that has to be normalized. Like, you know, when you work at Excel and you do a lookup, your data doesn't have to be normalized. You can have duplicates. You can't have that when you start working with SQL. I was just training a team this week and they had done this big, huge process and lookup to move it to Power Query. And I'm like, hey, you got to realize there was duplicates here and here and here, and none of your numbers would have matched when you got done. So that's A totally different thing that most people don't think about because you're not taught that in a typical finance degree or, you know, in most corporate jobs, somebody kind of have to learn by either getting thrown into some data transformation or having had a data type role or job somewhere along the way.

Yeah, that, that's exactly right. And I would say, you know, as I think about RFP and a team and we don't have a massive team at Entrada, but I would say every person on our team, I would say, is really good with data. Like, they have the SQL skills, they're excellent in Excel, they're curious, you know, they work in, you know, they'll work in Domo or Power bi. Like, you know, just really good with data. And I think that's, like I said, you know, I think it'll be really important for future FP and A teams.

Agreed. So I want to step back to pluralsight for a minute. One of the things you mentioned on your resume that I thought was interesting is you had to help develop and maintain all the SaaS metrics for the business. I think anytime you're trying to line align metrics across the business, it's a little bit like herding cats.

Yeah.

So talk about that experience and how you went about kind of making sure everybody's on the same page and aligned when it comes to SaaS metrics.

Makes sense. Yeah. I could spend, honestly a whole podcast. I'm sure we could. And I think, you know, I think it's really important for any software business to have good, high quality SaaS metrics that are used to run the business. Business. It's not just used to run the business, but it's then used in, you know, kind of fundraising processes as well. Whether that's, you know, raising an A series A, a series B, going through an acquisition, like, I think you just want this data off the shelf. You want to refresh it, you know, kind of every single month. And I think it's confusing, like, well, what does that mean? There's, there isn't a gap, you know, for ARR, for example. So I'll tell you how I've thought about it. You know, just acknowledge there's, there's other ways to think about it. Sure. Of course, I would say for me, the most important data set to have at any software company is your ARR by customer, by month. Some people simply refer to this as like a customer cube. And from this one data set, nearly all of your important SaaS metrics can be derived. Right. So ARR for a software company typically I think should be on a P times Q model or price times quantity for each customer. And I guess what I mean by that is, you know, quantity is typically the number of licenses or seats that have been purchased and price is the contractual price per license or seat. And there can be variations on this, you know, depending on the industry. For example, at Entrada we charge our customers based on the number of apartment units they have. So our quantity apartment units instead of licenses or seats. So if you have this, you know, P P times Q is what I call it, data for each customer for each month. This then allows you to perform an ARR roll forward each month, right? And this, this roll forward, you know, you list out your beginning ARR balance which again you know by customer you know what your new ARR is. So these are new logos or customers that you didn't have in the comparison period. You then know what your down sell amount is in that period. So again that's the aggregate dollar amount of customers that got smaller in that time period. You know what your upsell amount is. Again that's the aggregate dollar amount of customers that got bigger during that time period. And you know, your churn customers, like those are the customers that you lost. And I think that this roll forward is really important is I think this really can drive all of your metrics. So as people talk about things like gross retention, gross retention in my view is calculated just off the ARR roll for right there, it's just your beginning ARR plus your downsell plus your churn and then divide that by your beginning ARR net retention, same thing calculated from the roll forward above. You also know your number of customers from this P times Q data set. So you can do a roll forward for the number of customers you have. The beginning customers, new customers, churn customers, ending customers from that same data. Again, we're still on the same data set. You then can know things like your logo retention. It helps with things like what's the average dollar amount per new customer we're adding per customer we're losing, what's the, you know, what's our magic number. And then you start to look at efficiency metrics too. Things like, you know, what's the lifetime value? What's, you know, obviously you have to bring in some cost, but you know, LTV to cac really again just back to that one data set, I think you know, from that you can, you can really derive all of these metrics. So I think, you know, to answer the question I think, you know, for us at pluralsight, honestly, it took us a, it was early, you know, kind of in SaaS, there wasn't, you know, there wasn't a clear model out there of what to do. We were kind of grounded in gap revenue and billings and there's like so many different metrics out there. I think, you know, once we settled on this kind of P times Q data sets, you know, we, we let people see it, vet it, and just realize, like, hey, we've been making this way too complicated. We can really derive all metrics from this one data set. Let's make sure people feel really good about this one data set. And then, you know, the metrics that are derived from it, they're not controversial. It's just math based on, on the data.

I think that's great is get everybody aligned on that data set. The core set of what it is, how you define it, make sure you're all operating from a similar source of truth type of thing versus having totally different numbers. I like how a guest said it the other day. He goes, I don't say source of truth because there's never really one source of truth. He's like, operate from a similar source of truth. I was like, there's probably some truth to that. You know, I really like that in the ar, the roll forward. Right. You mean when you think about it, it's, it's so funny how much of modeling is just a corkscrew. Start with that ending balance. You do a beginning, you put all the changes, you get to a new ending, you do it again.

Yep.

You know, whether appreciation working, so many of them, that's all it is. Just.

Yeah, and I think that's been where some of the accounting discipline comes in as well. Like I, you know, people talk about the accounting month end close. I think everybody knows what that is, but I think there's a similar close on, you know, you're obviously, there is an fpa, you're hopefully doing a monthly or quarterly, you know, kind of forecast refresh. But I think the metric should be under that same cadence that every month you kind of have a close on the metrics. Right. You've done the calcs, you've reviewed them, you've blessed them, and then they're locked. Just like the accounting period locks, you know, kind of the KPI metrics lock as well. And then they're not changed. And then, you know, you kind of revisit the next month, the next month when you're closing. But I think just having that discipline you know, really just helps, you know, kind of with the integrity of, of the, of the, of the metrics.

Yeah. I had a situation where we were first trying to change all our reports. I was pulling them from a system, the numbers would keep changing, and, you know, my boss was going crazy as we were trying to figure it all out. And I'm like, no, I get it. I know you need consistent numbers, but it's still way more accurate than what we had before. Bear with me for a while as we, we worked through this. Yeah. He's like, I can't. You and I, it was not, it was not a fun time trying to get through that, to get it to a good spot. So I've definitely been there where locking them down. Just like you lock the end of the month, like, nope, that's going into next month. We're not reopening the books for that.

Yep, exactly. So cool.

So, and Trot has been your first CFO role. You've been there a couple of years now, right?

Yeah, almost four. I'll be four years in, in February.

So was the experience what you expected or how has it been being, being a CFO for the first time?

Yeah, I would say in a lot of ways, yes, it's been what I expected because I worked with CFOs, you know, for so long. I think in some ways, no. Like, you know, you just kind of never truly know what it's like until you're actually, you know, kind of in the role. As I mentioned before, I've been fortunate to have, you know, kind of really good mentors. You know, I mentioned a couple of them. You know, the really, you know, kind of just taught me how to be a good cfo. Maybe one more that I'll mention, a guy named Gary Crittenden was on our board of directors.

I don't know. Gary is.

Yeah. And Gary, you know, is probably, you know, the most or one of the most successful CFOs to come out of Utah. You know, he's been the CFO for some of the biggest companies in the world and, you know, was fortunate to spend a lot of time with him, understand how he thinks about things, feel fortunate that I was well prepared to be a cfo. You know, we raised money shortly after I joined Intrada from really good investors. You know, they have very smart finance types that are on their teams as well that I interact with a lot, that I learn a lot from. So I think for me, like, becoming a cfo, like, it wasn't like I made it. I'M done learning. I'm still learning a lot myself. Like I'm still kind of relatively young. I'm still challenged a lot. I have people on my team that are much smarter than I am, much better modelers, forecasters, you know, kind of everything. So I think, you know, just making sure I continue to stay, stay challenged. And I'm having a ton of fun doing it.

Well, from the calculations I had, you're younger than I am still, so you're really young. Otherwise that means I'm getting old and I don't want to feel old.

Valerie, we're all getting old, unfortunately.

Come on, don't bring reality into this. I, I'm curious, has your view of FPA changed, like how important you think it is or how you think about FPA since really becoming a full time cfo or maybe even the first time you were an interim cfo? I'm just kind of curious if that lens has changed your view.

Yeah, I think, you know, generally CFOs, they grow up on, on one of the two sides of the house. They either kind of grow up through the control before they grow up, you know, kind of an fpa. And I think, you know, candidly, FPA is probably the better way to grow up. That's not how I grew up. But I think, you know, really early on, even in my skull candy days, I, I saw the value of FP&A. I've always worked very closely with FP&A. I think for any high performing finance organization, accounting and finance have to be, you know, very tight at the hip, A lot of, a lot of good communication, lot of interaction, a lot of shared financial reporting. So I think I've always had a strong view of FP&A, you know, at Pluralsight as well, I think, you know, at Entrada, I, I view FP&A as kind of like the central nervous system in the business. Like we're really involved, you know, we have a business partner model. You know, every, you know, a team member in FP&A has partnered with every executive, you know, kind of at Entrada, involved in, you know, kind of all big decisions, all big things around, you know, kind of budgeting and so, you know, a lot of analysis that we do even on operational things in the business. So I think, you know, my view always was that it was important. As a cfo, you know, I love FP and A. Like I spend a ton of time with FP&A. I, I spend more time with FP&A than any of the Functions that report into me. I spend a lot of time with accounting too, but for sure FP and.

A is is the most FP and a guy here. Today I want to Talk about the.

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Yeah not and I love to hear that and you're seeing that more and more and I agree with there there's kind of the two traditional path there's a few other ways but you know I'd say 90% plus the time nowadays it's controller or FPA and FPA is becoming the more common route nowadays the number they're coming through FP and A just keep growing because in so many ways you're when you're partnering with the executives or general managers you're serving in many ways like a mini cfo. You still need other things on the bingo card, some audit experience or an understanding of treasury or fundraising that you may not necessarily get in your FP and a role. You may depending on the company but often you don't. But I think that it's the strategic and the commercial and the the leadership and that opportunity to influence that FP&A has that you may not get as much in a controller role. You can get some of it for sure. But your take is that kind of how you see it.

Yeah, I think that's right Paul. I think you know to maybe balance it out. I think the challenge that FP and A folks have sometime times is that they don't have as deep of understanding of the of the financial statements themselves, how they work and how they're interrelated. And so I think each side of the house has a challenge to learn the other side of the house, because, you know, you're probably going to be better at one of them, you know, kind of just before you spend your time, than another. Of course, I think as you think about becoming a CFO one day, you have to be good at both of them ultimately, or else you're going to be a cfo. And so I think, I think it's totally fair. I think that FPA is, you know, probably the better way to grow up to become a cfo. It's not the only way. It's not the way I did it, but I think, you know, if you're on the side of the house that I was the controllership and you want to be a cfo, it's on you to make sure you're getting the right FPA experience. Are you spending, you know, time on things like, you know, revenue forecasting? Do you understand how budgets work? You understand how business partnering works? Do you understand how, you know, certain KPIs or SaaS metrics of the business work? Definitely. Somebody from the controllership side of the house can become a cfo, but I think it's a little easier on the FP and A side.

Yeah. And I'm sure, speaking of fpa, I've heard there's some studies done by afp, and I'm curious, your take, if you would agree with this, that they say the hardest role typically to fill in finance departments is those FP and A roles. Has that been your experience or what do you think? I mean, I know they're all important, but as far as filling and finding the right people, is there a certain area that you find harder than others?

Yeah, I think it's hard to find good FPA talent. I think here in Utah, too, like, we have a lot of talented people, but also a lot of companies looking for those talented people. So I think that's right. Like, it's hard to find the right people. And then, you know, once you find them, you got to keep people motivated. Right. Like, you got to keep. Make sure, you know, they're getting promotions, new opportunities, developing their skill sets. So 100% agree, I think. I think it's a hard role to find.

Got it. And so I'm curious, this is kind of a fun question we ask from time to time. Can you share a strategic moment from your career? You talk a lot about strategy, an experience where some kind of strategic insight you shared with the business made A real difference made a significant difference for the business going forward.

Yeah, you know, I've been fortunate to work for a lot of really good businesses. I think I've probably been involved in a lot of the, know, strategic decision making. Maybe I have a bad memory, but I honestly can't think of any one moment or experience. I honestly don't remember the little things like that. I remember the people. And I think, you know, that's what's most important to me is the people, the experiences we had together, how we were able to kind of, you know, grow and learn together and ultimately add value to the business. Right. Like, I think, you know, I've been fortunate to be a business is where we've added a lot of value to the business. And in the time that we've been there. And I think, you know, I've been fortunate to do the same thing in Entrada. Like I mentioned, I started with literally no FPA team when I joined Entrada. Not a single person at that point in time, I think we were over $200 million in revenue.

That's big for no FPA yet.

Pretty big company for no FP&A, you know, we're more than double, you know, kind of that size now. And I think now we have. We don't have a big FP and A team, but we have, you know, kind of a solid FP and a team. You know, that that's, you know, kind of adding a lot of value to the business. That's what I remember. Like, that's what I view my value at is, is like, hey, you know, we brought this important function. These people of the team that I think are helping, you know, kind of drive some of the most important decisions the business is making.

And I love it. It sounds like you think about more, okay, do we have. Do I have the right people here? And are they driving value than specific experiences per se? It's those relationships and how those are impacting the business.

That's right.

Yeah. And it's kind of funny when you said 200 million and I was talking to somebody the other day, they just joined a new, you know, CFO of a new company. And he's like, I got in and he had a little bit of FP&A. He goes, But I had two FP&A people, and all they were doing was the board deck, nothing else. It's like, that's all they're doing. I'll just get rid of them and do the board deck. Like, you know, I need a real FBA function and it was a $250 million business. And I was like, that's painful. You know, so the first thing it did is let's go get a person to manage FP and a. Yeah.

You know, I think it's important that the day to day happens. I think, you know, the board deck is important as well. You know, that's something that I spend a lot of time on. But yeah, the board deck definitely should not be your full day job.

Yeah. And so that's what surprised me. Came in kind of like, wait, I have two people and that's their full time job? Like, yeah, something's wrong with the way this has been run.

Right.

You know, so it was a good kind of eye opening for them. So this is a fun section we have. It's our FPA section where we ask couple just general FBNA questions, everybody to see what they think. And the first one is more of a hypothetical. Kind of curious to see where you go. If you had to pick between bottom up or top down forecasting for the rest of your career, you could only do what, which one would you pick?

I'm gonna go with bottoms up.

Why?

I think, you know, my view is, I think the budgeting process generally starts with tops down. Like the tops down kind of guides you on what you think it could look like, what it, what could make sense. I think the bottoms up though is reality. Right. Like in a software business, if you're, you know, selling an enterprise, for example, you've got to do your quota build, like add up, you know, what is the, what is the quota we currently have on the street, which is just the number of people times what we think the quota is going to be by sales rep. What capacity is that? What capacity do we then need to go higher in terms of what our plan is for next year to be able to hit the numbers that we want to. I think that you can start, you know, kind of with, you know, with tops down. I think is like as a philosophical thing, it's kind of a straw man. But I think to me, where the rubber hits the road is bottoms up. When you go kind of do the full quota build, you do the full revenue modeling, you do the full cost build, you know, kind of with your current, you know, kind of roster of employees plus the ones you plan to hire. I think that's where precision comes in. Like, I, I think that, you know, you're not going to be precise if ultimately it's not on a bottoms up basis.

I agree and I really like how you said reality. It's often where you realize where the opportunities are, where the shortfalls are. If that strategic number you had in mind at the top is achievable, because we've all been there, where you, you get there and there's this big gap and you're like, okay. Without something fundamentally changing, I don't see how we close that. We can get close, but we can't close it. And so I think having that bottoms up is really important. So I could see why you picked that next one. How are you thinking about generative AI? Is that something your staff using or how do you guys think about that at Entrada?

Yeah. So, you know, internally at Entrana, we use Google Gemini, you know, kind of for employees. And I would say generative AI is being extensively used on our Entrada platform. Keep in mind, Entrant is, is effectively, you know, we're like an ERP that specified, you know, specifically for multifamily. As it relates to our finance team, I would say we're using generative AI on a pretty limited basis. You know, we're doing some basic stuff like, you know, generating job descriptions and other things. Sure. I think that we're experimenting and seeing, like, how it can add value. I think as it relates to kind of finance, our view is it's still kind of early days. Like, are we seeing massive time savings because of something in generative AI? I would say no. We might be laggards or, you know, slower adopting than finance teams, but I would say we're not seeing a ton of efficiency gains from it yet at this point.

Okay. No, that's fair. And I've heard that from others. I was curious, kind of where you think you're at. What's the number one technical skill we need to master as FPA professionals?

Yeah, so I mean, I would say understanding financial statements is table stake. So I'm going to just put that to the st. To the side. I would say number one technical skill in my view is really modeling. And I think a lot of modeling is still done in Excel. I mentioned earlier just certain technical skills like SQL, having an experience with certain data analytics tools. I think probably being agnostic in how you can work in those tools too. Because every business is different. Whether you use whatever tableau, looker, power, bi domo. I think you've got to be able to pick up different tools as well. Because as I mentioned, in my view, kind of FP and A teams are also becoming data teams to really help with decision Support. You gotta be able to look at large quantities of data and most importantly, synthesize it down to help drive the right decisions.

Got it. Makes sense. And that's one of the most common answers we hear is financial modeling. I say, I think that's number one. Probably followed closely by spreadsheets is number two, because, yeah, they kind of go together in so many ways. So not surprised to hear that. What's that number one? Soft or human skill we need?

The number one soft skill, I would say, is relationship building. Like, I think having a working relationship is really, you know, just essential to be a good business partner, you know, throughout the organization. I think it's probably the old cliche, Paul, that, you know, nobody cares how much you know until they know how much you care. Like, you've got to establish the relationship, have good communication, or no matter how good your analysis is, it's just going to be ignored.

I agree. So often analysis kind of dies on the table because we don't know how to manage a relationship or influence or communicate. You could be great technically, but if you don't have that or have somebody can help champion that for you, a lot of good ideas don't go anywhere.

A hundred percent.

All right. This is kind of a fun one we did recently. And I always love to see how people answer it because I. They go all over the place. So you have a magic wand. You could change one thing about fpa. What would you change?

Yeah, I would say, you know, and if this is, you know, kind of for all organizations, I probably would make FP&A and data, you know, kind of all owned together, you know, within an organization. I think that, you know, just the level of objectivity and integrity of the data will be higher, you know, to help drive good decisions. And I think, you know, with waving the wand too, I would. I think I would want all the FP and a team members to have really good technical skills, really good modeling skills, be very advanced Excel users. I think, you know, just a team that, you know, really has these advanced skills will help drive, you know, good decisions throughout the organization. I think, you know, we talk a lot about Excel. You mentioned, you know, board slides earlier. I think that's also important too, that you have good, you know, kind of PowerPoint and Google Slide skills as well. Because I think that gets to the storytelling component, right? Like, important to have good relationships, important to be able to do the analysis, important to be able to tell the story as well. Like, I think all three of those are very important. And what you'll find sometimes in FP and A is somebody is really good at one of those. But maybe not two of them, maybe not all three. I think to be really good at fpna, you probably have to be good at all three. Right. Build relationships, maintain those good communications, you have excellent technical skills and then you can tell the story as well.

So that's all we want. A bunch of unicorns. I like it.

Exactly, exactly. And those people do exist, by the way. I'm fortunate to work with some of them.

No, I know there are some fabulous people out there. I've worked with some great FPA people and it definitely is a role we're asked to do a lot and there's a lot of great FBA professionals. I just had to have a little fun with you. All right, we're going to move to the get to know you section where I ask some kind of personal questions so our audience gets to know a little bit more about you favorite hobby or passion. What do you like to do in your spare time?

Easy for me. I love to ride mountain bikes. I help coach the the mountain biking team at our local high school here. Love to ride bikes. Like that's kind of my thing. I started out doing road bikes. I'm a big mountain biker. I try and go many times a week. Go right off the high school team. That's my thing.

Love it. Great. This is a perfect place for it. You're in a great area there for a lot of good, a lot of good riding. Utah's fabulous for mountain biking for sure.

As good as anywhere.

Yeah, I agree. If you could recommend a book to our audience, what book would you recommend?

Yeah, so you know, we talked today a bit about relationship building. You know, I would recommend a book called the first 90 days by Michael Watkins. Book talks a lot about, you know, kind of starting out at a new organization, what the most important things are, how to navigate it, you know, when you first get there. I think I read that actually as I was joining Intrada, it was super helpful for me. So I think it's really helpful if you're starting somewhere new just to prioritize what's important. I think sometimes when you go to a new organization, especially if you have some level of experience, you want to start adding value as soon as possible and you may even see low hanging fruit of things that would be easy to change or do. I think it's good just to remind yourself first, hey, go build those relationships. Build the trust first before you start suggesting to change things because people don't want to hear from the new guy about how things should change until they actually understand you and actually, you know, develop a trust with you.

Yeah. Something you don't know early in your career. At least I did. You know, you start somewhere. Oh, I feel about doing this. And they're just rolling their eyes, looking at you like, you don't understand how this business works. Like, just be quiet. All right, Favorite travel destination. If you can go anywhere in the world tomorrow, where are you going?

Ah, man, we live in such a beautiful world, and Utah itself is such a beautiful state. For me, it's Hawaii. I love Hawaii. Just so different than anywhere, you know, kind of that we live. And, you know, I enjoy a little bit slower pace. Like, you know, life goes at a pretty fast pace here, and it's nice to slow it down once in a while. Hawaii is my, probably my favorite place to visit.

I like it. If you could have dinner with one person in the world today, who are you taking to dinner?

I mean, I think as a finance guy, one of the answers I have to give is Warren Buffett. Right. Like, you know, I think, I think it's just such a fascinating character. He's probably the best investor of our lifetime and just a pretty unique individual. I make it a point every year to listen to their, you know, kind of annual meeting that they do that's usually, you know, kind of put out on a podcast, I think, you know, I think they think about the world in a very interesting way. I think in a lot of ways different than the way, you know, a lot of others in, in finance and Wall street are thinking about the world today. So, you know, I think he'd be fascinating to have, have lunch or dinner with.

Yeah, we definitely, we've got that one. A few times he said think differently. The first thing I thought of is his opinion of ebitda. He hates it. I, I started my career at American Express, and so, you know, our CEO kind of has a similar view as Warren on ebitda. And so when I went to my first private equity and started using I hate this metric, now I understand it, and I've used it at quite a few companies. But, yeah, I've never been the hugest fan just because of that kind of roots of my first finance role where I spent a good part of my career was American Express, and he was the number one shareholder.

Yeah, yeah, he, Yep. Yeah. Very interesting guy.

Yeah, for sure. I, I, I agree. All right. If you could offer one piece of advice to our audience to be a better Business partner, what would you tell them to start doing?

Yeah, I think, you know, it's been kind of a theme, I think, of the podcast, Paul, but I think I would say, you know, build good relationships with your internal, you know, and I think one way to do that is to show how you can add value, like, be very responsive to them. I'm always a little surprised how some people in organizations are not responsive. If you're an fpa, just remind yourself that you are a cost center and, you know, you need to then add value. The way you add value is by serving your customers well. And I think your customers want answers fast. Like, they want good answers. They want answers fast. So I think, you know, really just, you know, making sure that you develop the relationship. I think, you know, maybe just back to the three things. Make sure you, you know, kind of are developing your own skills so you can add more value. And then, you know, storytelling, like, be succinct, be able to tell what's going on. You know, people are busy, have big jobs, and they want to be able to, you know, kind of have the data synthesize for them, tell them what it means, tell them what the punchline is, get them the answers.

Got it. No, it makes a lot of sense. I think storytelling is a. A huge one. I think there's a lot of, you know, great material out there to get better at it, but it's about practice for sure. All right, if someone wanted to learn more about you or possibly reach out, you know, they heard the podcast, what's the best way? One, I think there's a lot of, you know, great material out there to get better at it, but it's about practice for sure. All right, if someone wanted to learn more about you or possibly reach out, you know, they heard the podcast, what's the best way for them to do that?

Yeah, feel free to send me a message on LinkedIn. That's the only social media site I'm on. You guys find me on Strava if you happen to be a biker runner, which I think Strava is far more interesting than LinkedIn. Yeah, I know Strava, but feel free to reach out. We'd be happy to engage.

All right, thanks. Well, appreciate you joining me for some time today, Mark. And I know it's a Friday afternoon, so let you go so you can enjoy your weekend. Hopefully no more work. And it was real pleasure having you on the show.

Awesome. Thanks, Paul. Appreciate you having me.

Thanks.

Thanks for listening to FPA tomorrow.

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