The Runway Origin Story and What Makes then Unique

Hello, everyone. Welcome for joining us. Super excited for this webinar today. We'll get started in just a minute here. But before we get started, we'd love for you to share where you're coming from. So let us know in the comments where you're joining us from today. And we'll start here in just about one minute. We'll give you just another minute here before we get started, but let us know where you're coming from. And I am going to do one thing. While we're waiting for everybody to join, I just realized the tracking is on on my camera, so every time I move, it's adjusting. So let me fix that. And we. Great. We have Los Angeles. We have Serbia. Joining us. Can keep letting us know where you're. Where you're coming from. And Siki has rejoined us. We lost him for just one minute, so he's back with us.

Hello. Can y' all hear me?

Yeah, they should. Should be able to hear you. We have a lot of people telling us where they're coming from.

Fantastic.

So we have Belgrade, Austria, Vienna.

Oh, wow.

Ecuador, Israel, New York City, and Los Angeles so far. And then we have dxb. Where is dxb? I'm gonna guess that's a city or airport, but I don't recognize dxb. So let me know. Is that Dubai? Not sure what that is. We have Canada.

That would be Dubai. Yeah, that's the Dubai.

Okay, it is Dubai. That's what I was thinking, but I wasn't sure.

Yeah.

All right, perfect. Well, we'll go ahead and get started here, but just keep letting us know where you're coming from. Keep the questions going as we talk. Feel free to ask any questions. We're excited to have you. As many of you know, my name is Paul Barnhurst, the FPA guy, and I have here with me today Siki Chen. He's the founder of Runway. Runway is one of the newer tools out there. They've gained a lot of traction. Just did a big raise of a Series A. What was it, six months ago now?

Yeah, it's almost a year ago, actually.

Almost a year ago. And so they're scaling and growing, and we're going to have a great conversation about CFOs, what they expect, what Runway is doing. So where I'd like to start is just turn it over to Siki and give them an opportunity to tell us about himself. So why don't you tell us about yourself and Runway?

Yeah, well, you know, my background is actually as an entrepreneur, so I've been founding and running companies since basically, you're out of school. I have a technical background. I majored in math in college. I found myself in a position of running a company first time, I think in 2007 or so. I remember getting a spreadsheet from our head of finance the first few months in, and he had a Harvard mba really in person. And I just remember not really understanding how any of this works.

And.

As my career progressed, I joined Zynga. I ran product there through the ipo, started another company, and I was head of product at Postmates, which bought the second company. And the thing that led to Runway really was I run a company called Sandbox VR, which is this VR retail company where you can go buy tickets and go on these holodeck adventures with your friends. And then I was appointed CEO of this company about six months before COVID hit, which was great timing for joining a retail business. And long story short, we had to lay off about 95% of the company. And I remember doing scenario planning on spreadsheets and Google sheets. And I asked our CFO to tell into this, hey, there's something better we could have used for this. Right? You know, we have Figma. That's a thing and airtable great products. And surely there is something equivalently good for the CFO suite. And turns out there wasn't. And that's what led to Runway. And that's what we're doing at Runway. The idea is, can we make something that is truly accessible and understandable to not just people in finance or people outside of finance too, so that you can connect the whole company and give everyone a single source of truth?

Love it. Now everybody needs a single source of truth. And continuing to find better ways to make it easier to plan. And I'm sure you dealt with the pain. I remember doing a million scenarios around Covid in Excel. And I think anyone who worked in FP and A or anyone who was in a leadership position where had to deal with forecasting, remembers the pain of every day going, what do we do now? What does the numbers look like? What if this happens?

Not fun. No.

No, I don't think it was for anyone. Some businesses loved it because they were trying to figure out how they staffed up. Like my. My partner that I do training with, he worked for a toilet paper and paper products company.

No way.

So it was a banner year. He loved it, but that wasn't the time.

I remember, yeah. Going to the supermarket and having it. The pasta. I remember the pasta and the toilet paper that was what was out first.

Yeah, exactly. So, you know, one of the things we wanted to talk about today is just the pressure that CFOs and the broader finance organization are experiencing. It feels like they've never been higher, especially just the last couple years with the volatility, uncertainty, inflation, everything that's going on. Talk a little bit about why you think it is that way today. What are all the challenges you're seeing?

Yeah, I mean, this is happening for quite a while, right. Obviously the recent market downturn and now hopefully upturn has changed things a lot and affected the amount of pressure that the CFO role is under. But I think this has been a trend that's been happening for over the past couple of decades. Right. And everyone who's in finance knows this. The role of finance has become from. Has gone from a more of a backwards looking reporting role about controls to more of a strategic role. Right. It's more about reporting forward looking, being a business partner to the rest of the team. And I think there's a few things driving this. One is there's just more companies and more competition than there ever is before. It's the market is moving faster. But I think another thing that is happening is this idea of context over control as sort of a culture, as a culture principle in a lot of organizations. Right. Previously, people were just seen as these cogs in the machines and people just get told what to do. But now, in order to move at the speed that is required to be competitive, everyone in the company needs more context. They need to align. You need to understand how the business works. You need to understand the impact of the work that they do. And the role of the CFO has more of a strategic impact on that particular thing than ever. Right. And so I think those are some of the bigger trends that has been catalyzed by the recent macroeconomic changes. And so the role has become far more of a strategic role, more of a business partner role, more of a storytelling role than ever before.

I would totally agree with you. You know, I do a lot of training and the storytelling, the business partnering, the influencing is becoming more and more important. I mean, I was talking to a large Fortune 100 company today about training and they're like, yeah, that's really what's resonating with us, is exactly what you talked about. And so it's no longer is it sufficient to just understand the finance numbers and understand them well, or regulatory and compliance, all the things that traditionally we thought of for finance.

Yeah, totally. I mean, one of the things we love to say at Runway is finance is actually not about finance. It is everything. Right? Everything that a company does. Every person in that every person in the company eventually falls down to the bottom line somewhere. And I think, like, that is known to be true with great finance people. But the great founders and the CEOs, the business partners of finance, they also understand this. And I think that is a gap that needs to be bridged. Right. Between the view of finance from the finance perspective and the rest of the company. Right. There is never just one model in a company. You have a growth model, you have a marketing model, you have a product roadmap. And all of this feeds and has dramatic impact on the financial outcomes.

And looking at your career, I'm going to kind of throw a question at you. I know we had a few set, but this is one as you were talking, and I'm curious, how have you been able to see that aligned as a CEO? What do you feel like historically has been the biggest challenge of making sure all those plans and that finance is on the same page as the broader business. And it's not just, hey, we have our financial plan, then everybody goes and does the actual job.

Yeah. Honestly, the truth is, I haven't had a satisfactory answer as CEO. And that is the reason why I thought Runway would be a good idea to work on some stories. I remember, I remember a very first company in 08. I work with a fractional CFO and she created this model of the business. And I felt that, oh, we didn't actually sit down together and understand all the games that we're making right now and how they grow. Right. There is a product growth model for these games. They have average revenue per user and retention Curve of reality. I think the artifact that I got, I did not trust represented the way the business actually worked. And so that was my first experience. But at that time, I chalked it up to, okay, like, I'm not a business person, I'm not a finance person. Maybe I'm just not supposed to understand this. This is a finance point of view, and that's okay. This is what real companies do. And I think that really undersells, underrates, how much of an impact finance could have on the business. Right. Instead of like having it be this thing that a CEO says, oh, well, that's kind of like administrative function sort of paperwork. It really is a simulation or should be a simulation of entire business. And the great CFO as they understand this, and that is how they're able to be strategic. And so I remember that being a source of, like, intense disconnection for me early on. And I remember too, at Sandbox, right, I made a financial model for the first time. I realized, okay, this is like, not substantially different from a bunch of models I created before for product. Right, Right. When you run a game, you create product growth models. And I realized this is actually, like, ideally the same thing. But the tools that we're using and the meetings we're using just isn't accessible to people outside of finance. And it could be a lot better for people inside of finance, too. And that's what led to Runway. We think there's, like, a tremendous opportunity to build something that isn't just putting a spreadsheet on the web, but makes it actually understandable to people inside and outside of finance.

I appreciate that. And one of the things I like to say, when you said, you know, finance isn't about finances, I was having a conversation with somebody, and it's all about being able to explain the operations of the business and helping, you know, understand that in the operational metrics, you're telling a story, but you're. You're using the financials to support that story you're telling.

Yeah.

You should be leading with the operations and what actually happens with the business versus here's your ebitda. Okay, what does that mean? Why do I care?

Right. I think that's like, one of the big misconceptions that certainly I had about finance before I was working on it. And I think, like, that is such a underrated opportunity for finance as a role, as a function works for Diva, right? People confuse it with metrics. People confuse it with, like, here are these numbers. Here's like the three statement report. But what it actually is about is the logic of how the business works. Right? That's what a great finance team and a great finance model does. It explains how it works. It explains if you move this metric, how it affects the margin and the growth of the company two years down the line. And everyone has a stake in this. If there was a way for finance to be that org, the org that makes clear the impact of what people do and makes clear, and it helps align the team on how the company actually works and grows. That's like a fundamentally different view. And I think, you know, what is called for are better products, which is why we're building Runway.

Yeah. Yeah, agreed. So I'm curious, from what, you know, from your perspective, what expectations do the CFOs have for FP&A today? I know we talk about storytelling, knowing the business. What do you think are the key expectations that CFOs have today?

You know, I think there are like table stakes expectations and, you know, the, the things that CFOs want has, I think, been understood for on the order of probably 10 years. They want a holistic view of the business, right? They want to connect the different parts of the business so that you have like one view of what the plans are, how the business works. They want to save a lot of time too, right? In order to be more strategic. Right now, if you're not on some kind of tool, you're spending so much time actualizing your model every week and every month with the data across your entire enterprise from your general ledger, that's where it starts. But you have HR systems, you have marketing systems, CRMs, data warehouses. And just to get all of that data shape into a way where you can update your model is increasingly time consuming. And the other thing that is well understood as collaboration is important, right? As a company scales, you have more and more people in your company, more people to get information from, to make sure you have the right information in your current model and more people to put out to. And you need the right people to see the right things. And all of that is fairly table stakes. And the idea is if we make, if we can save people time, if we can make collaboration better, if we can integrate with all these data sources, then we can enable finance people more strategic. But the thing that we believe uniquely about this entire problem is that this is not new. All of these things are table stakes and have existed in every other product for on the order of five to 10 years. But if you talk to actual CFOs in the wild today and you ask them, do people outside of finance actually understand what you do and how the business works, are they making decisions with the financial impact in mind? Are they in your FPNA platform collaborating with you? The answer to all those questions is actually no. So it is the great mystery of this space as to why everyone in the market and every user understands this is what the problem is, that you need to be strategic, you need to bring everyone along, and yet that is by and large not happening. And so our very specific point of view on this is that everything that is a future today is table stakes that you must have, right? You must save finance time, you must have good collaboration tools. But collaboration is not enough, and saving people time is not enough. Because in order to actually be strategic, you need to be collaborative. And in order to be collaborative you need to align the entire company on one point of view of the business. In order to do that, the entire company needs to have context. They need to have a deep understanding of how the company works, how the business works, where are you with the business, what the current set of actuals are? Right. But you can be as transparent as you want. You can give people access to every source of data, every model, which most people don't by the way. But even if you did, even that's not enough. Because all of the access in the world doesn't matter if people fundamentally don't understand what they're looking at. And that is at the center of what is about. How can we make intuitively clear what the plans are for the company and how the business actually works? That is the sole thing that we are obsessed about. So that the companies can, and finance leaders can enable the rest of the team members to have the context and understand it, which then enables alignment, which then actually allows for real collaboration and strategic impact. That is the one thing that we are obsessed about.

I figured you might like this question from Cameron. I'm guessing you or your team can take care of this one.

Yeah, we definitely can. So we have recently. So to give you some context, you can sign up for early access on our waiting list there is somewhat of a wait. We're mostly targeting enterprises from around 50 full time employees, about 12, upwards of 1 to 2000. Some of our customers include Angellist and Superhuman and other great companies like that. But we really are mostly helpful when you have at least one full time finance person in place. And so depending on your information, we would love to follow up and see if we can show you a demo.

Great. And so just, you know, whoever's out, out there listening, please let us know if you haven't where you're coming from. Feel free to throw any questions in the chat. We're going to keep going now and we will do a brief demo here also. You know Cameron, if you want to see the tool, you can attend the showcase on Thursday, the FPA showcase. You'll find plenty of information on my LinkedIn about that. There'll be a longer 30 minute demo there. So that may be a great way to see the tool as you're waiting to, you know, get a demo from the sales team there. But next question I have for you is how, and you've talked a little bit about this, but tell me a little bit more, how is Runway helping prepare CFOs, you know, to meet the needs today that you've Talked about that collaboration, really democratization, if you want to call that of finance and making sure it's a company wide effort, not a silo.

Yeah. I mean, one of the most important ways we do so is by connecting context outside of your typical spreadsheet. Right. You think about the way an operator would think about her business. Right. Even finance too. Right. Like the way companies have product roadmaps, they have marketing plans, they have fundraising plans, and typically those that very important context as to where the company's going lives outside of the spreadsheet. It lives in Notion and word documents. And so one of the things that we've done, we spend a lot of time thinking about is how do we connect that context with your numbers and the model and the logic for the first time. So you can actually see the impact of what you do and look at your model in a way that's a lot more accessible, that matches closely a lot closer to how a person would actually think about our business. That's probably one of the more important innovations. On top of, of course, us doing all the table stakes things of having scenarios and integrations and all of that. But yeah, that, that is at a high level. We do it. It's actually really hard to explain in words what we do without just like seeing the product. So at some point we'd love to just do a demo and show.

Yeah. If you want to show us here real quick for a minute, why don't you go ahead and do that? We'd love to see it if you can. Sure.

Yeah. Let me just share my screen real quick. Quick. I think I have something teed up for this. All right. I am, in theory, sharing my screen. Can you see it?

Let me add it to. There we go. We should be able to see it now. If you don't see it, let us know in the chat. But I. I am seeing it.

Cool. So this is the. An actual instance of Runway I should call out. This is actually not Notion. We look a little too much like Notion, even though they are one of our investors or the COO is. But what you're looking at is a strategic dashboard. Now you can create any kind of page in Runway. Once you have your model into Runway, you can create this dashboard or hiring plans, or you can create a revenue planning application. We even send our investor updates via Runway, which is pretty handy. But the first thing that you have to understand about Runway is that everything is driven by a model. So you would create your model in Runway similar to way you created in Excel. We have a Very flexible modeling engine. We don't hard code anything. So that's another thing to understand. We have a really wide variety of customers, from obviously SaaS companies to marketplaces to hardware companies. We literally have a company building space stations on Runway. The difference in Runway is it does do driver based modeling. So instead of every cell having a formula, every row has one formula. So once you have your model into Runway, you can create applications like this. The first thing that is different that you'll notice is we have this notion of a plan. We have a marketing plan, a product roadmap series fundraising. And this bears some explaining here because this is one of the key things that makes it a lot more accessible to finance and also rest of the team. The way plans work is the simplest plan we have here is a series B fundraising plan, right? And if I open this up, you kind of see what's doing. It says take the row called cash in your model and add $12 million to it in the month of September 24th. So that's the world's simplest plan. But you can compose plans together to become roadmaps and, and strategic plans. So for example, if you look at a marketing plan, this actually composes several plans together that says we're going to increase marketing spend by 30k a month over the course of 3 months that's owned by a different person. In June, we plan to improve ad targeting and we expect that to lead our to lift our qualified lead conversion rate by 10%. And July, Richard is going to drop some new creatives from our agency for our ads and that's going to reduce our cost of lead by $30. So if you go to our sales and marketing model, you know, we have marketing spend here and we have qualified leads and we have cost per lead here. The numbers are changing, but what's missing is the context, right? Why is it changing? What are you going to do to move these core metrics for your business? Who's going to do it? And that is the first problem that plan solves is that it gives you that context. But once you have plans and Runway, it's not just nice to look at. It also enables some really common workflows. So for example, if you were to examine any plan, you might ask, well, what is the ROI of any given plan? Right. And the way you would get an answer today if you're using a spreadsheet is you will make a copy of it, give it a funny name, undo the changes, compare the KPI's output. In Runway, we try to make it A little bit faster than that. So if you want to understand impact of any part of a plan, if you want to understand the impact of this 30k marketing spend, you can just click on it and immediately you can see this blue highlighted area on any graph that you have on this page. That is the impact of the thing that you selected. So you send more marketing burn is going to go up, roaming is going to go down, and your AR is going to go up. You can select a different aspect of your plan and instantly see how the impact changes. It's a little bit smaller of an impact for just reducing cost per lead and happens later. Or you can select the marketing plan as a whole and you can see how all these decisions multiply upon each other for much bigger impact. If you're happy with that, the next thing you might want to do, of course, is experiment with different levels of spend. What if, Paul, you're probably used to this. How do you do that? You're going to make a copy of the file, give it a different name, and that's how you end up with 12 dozen different spreadsheets. Now you have a version control issue. If you change them all in one, it doesn't get synced to the other models that you made copies of. Here's how we fix that problem. Right now. You'll notice on the main scenario, what I'm going to do is I'm just going to experiment with different levels of marketing spend. Now, of course, I could always go to the spreadsheet view and change this number here. But because plans exist in Runway, I could simply click on the plan and I could change this number. Or what's even more fun is I can just drag graph directly up and down. You can see how these metrics respond in real time through this calculation engine. You can see that this is how sensitive AR and Burn and Runway is to these changes. If I let go of my mouse, I go from a main scenario to a draft scenario. What this is telling me is that you can change any aspect of your model, any asset of your plan, and there you don't have to worry about anyone messing up your main committed plan. Because every change in Runway is locked to a private draft until you merge it. Kind of like GitHub, if you're familiar with that tool. So you can look at the before and after. Here's a diff what I just changed. See how it affects your KPIs. And probably one of the more important things that we can do is like, imagine you're ahead of marketing Right. And you're presenting to the CEO or you're the head of finance presents you to the board with this marketing plan. And now the board says, okay, this is a great plan. What happens when we push this plan back by like a quarter? And what is notoriously annoying to do in Excel is a change of timing of a decision. Right? Because think about it. You have to, like, find a diff, apply it three months later, paste all formulas back here and do it that same thing for every other row that was impacted by that plan in Runway. And you're not going to be doing that live in a board meeting. There's no way. But in Runway, you can answer the same question. Because plans exist. You just push it every three months. Everything here will start hitting in August, not in May. You go back to your spreadsheets and it's linked seamlessly. Now you review and merge. And you can see there's both a timing change as well as a magnitude change. You can see with the before and after of this. And you can merge it in. And now you have a main, committed, locked in plan again. So that is, at a high level, how Runway works. I'll pause there if you have any questions so far. But, yeah, I could keep going.

Yeah. So we do have a question. One just commented how impressive the tool was, but let me pull another one up here. I'm going to pull two questions and chul asked about virtual CFOs or fractional CFOs, if that's something your tool supports. If they're supporting multiple companies, that would work.

Yeah, we are exploring. So we are still technically early access, although we have close to 100 customers now of some size. But, yeah, we are actively having conversations with virtual CFO firms to partner with us in Runway, and we're actually working with at least one. So if that's interesting to you, we'd love to have a conversation with you.

Okay. And then one other question we had here from Muhammad was just asking the ETA to have all the Runway services available. I thought they're all available today. It's just not general release, right?

Yeah, it is, it is. We will be general releasing next month, actually in two months. But you can sign up today. And if you qualify, our sales team should be able to reach out as soon as we can get through our list. And pricing starts at 2k a month, paid annually.

All right, perfect. So let us know if there's any other questions. I have one more question I'm gonna ask Seeky here, but please put your questions in the chat. We've loved the ones we've got. Thank you for that demo. I've. I've seen the plans before, and I love the visual nature of what you've built there. It's one of my favorite things about the tool. I had the opportunity to play with that and really enjoyed kind of experimenting with that. Some sort of. The last question is, we've talked about, you know, how Runway helps CFOs today. What's the biggest thing you're hearing from CFOs? What are they regularly telling you? Because I imagine you talk to them every week at this point.

Yeah, I know this is going to sound weird and made up. I will literally show you mobile video clips of our customers saying this. And I'm surprised by this, but the number one adjective our customers say about Runway is fun. And this is like, across multiple customers. And that is quite surprising. We're really happy to hear that. But, like, I should break that down a little bit. Like, fun is typically seen as sort of this. This. It's seen as a luxury, right? Sort of like, it's frivolous. But what we're trying to build, a Runway is something that is truly understandable in an intuitive way to people in finance and outside of finance. And as humans, one of the ways we try to understand things is by playing with it, right? Like moving the chart and moving on it on a line and seeing what happens. That is what helps us develop an intuition for how things work and what is the impact of our work. And so what fun enables is a state of flow, right? Like when you're not having fun, when things are slow and janky, you're not thinking, you're not being creative. It's really hard for you to create value. And I think that is the thing that fun enables. It enables a flow state which results in creativity. And I think when finance people and entire organization are in a state of creativity, that is how you're able to create new value. And as you know, that is like, where finance is shifting, right? It is going from a cost center, from an administrative, backwards looking function, focused reporting, to how do we drive the business forward and create new value? Where do we invest? And in order to answer those questions, I think fun is not just a luxury. I think it's a requirement to get there. So that is truly really the number one thing that we hear from customers that is like, super surprising. Another thing that we hear is obviously downstream of that is the understandability, accessibility of Runway. So one of our customers, for example, converkit a company might have heard of, what they've done is also blew me away. They did a town hall with their entire company and had them go on Runway. And of course we have fine grant permission. So people only saw the things they're supposed to see. But they had people do a scavenger hunt inside Runway for like, what are the key drivers of X, Y and Z? How does this work? And people were able to do it. So that's also interesting. And the third one is probably like how much context can be seen in Runway? And you can connect with Runway. So one of the things that we were really surprised by was we had a customer recently actually integrate JIRA in into Runway, which is like you couldn't imagine someone doing that with sort of a legacy platform. Right. You wouldn't integrate JIRA into your finance platform. But because plans exist in runways sort of makes sense. The idea of integrating jira, what that enables you to do is you can connect projects and tickets with financial impact for the first time. And so this is a way of integrating the work and the context of a product team or engineering team. So those are some of the things that we're hearing. And probably maybe one more thing is we have a really good CX team. And I know everyone says that, but our CX team is actually surprisingly senior. So we have part of the CX team includes a head of product at Amplitude, which is a multi billion dollar company, an ex investor at the Columbia Endowment. One of our customers who has experienced private equity and XVP of finance recently joined the team. So you'll be working with the customers that, that, that work with. Our team are working with extremely senior people who know what they're talking about in onboarding. So those are some of the things.

Appreciate that. The word that kept sticking out to me was when you use the term janky, because I don't hear that one very often. I used to describe processes I had at one company because we were such a mess.

Yeah.

As I managed to get everything done. But I tell them, I go, you do realize this works, but this is very janky. It's not the right way to build this because I was doing everything with Power, Query and Excel, with no database, no master data, just a total mess. So when you said janky, that's all that kept coming into my mind is I used to tell everybody my processes were janky. So there you go.

I mean, that is like the, you know, one of the fundamental inspirations for Runway. Right. I thought that's why there was an opportunity we have great products. And I, at my core, I am a product person. I want to build good products. And there has been amazing builders and products made in every other function, right? Engineering has linear and design has figma and product has notion and amplitude. And what do you get for finance? You know, what, what is the notion, figma type of experience for finance? Whoa. And so that, that is why Runway exists. I wanted to build something of that quality in this, in this space, which I was personally pained by.

I love that. And, you know, we're at the. At our time here, but if anyone has any last minute questions, throw those in. Otherwise, about 30 seconds here. We'll go ahead and close the stream here. But thank you for joining us. We appreciate that. I know we had a really diverse audience today. We had people all over the world and so thank you for carving out some time. And we'll just look here, see if we got any other questions. I'm not seeing anything. So give you just last word. Anything you want to add before we close?

Seeki buy my enterprise software product.

There you go. A pitch straight from the CEO. Buy his product or just send me money. Either one works. All right, thank you everyone for joining us. And we hope to see you at the showcase Thursday. You'll be able to see a longer, more extended demo of the software. So thanks for joining us, Siki, and thanks to the audience.

Thanks for having me, Paul. This has been great.