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Episode 4

The Changing Role of the CFO in the Era of Disruption

Episode details

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

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


Dan Owens
Dan Owens
CFO of Maxio, Maxio
Randy Wootton
Randy Wootton
CEO, Maxio

Video transcript

Randy Wootton (00:04):

Well, hello, everybody. This is Randy Wooten, I'm the CEO of Maxio and your host of SaaS Expert Voices, the podcast that brings the SaaS experts to help you understand where we are today and what's happening tomorrow. Today, I'm honored to be talking to Dan Owens, actually our Maxio CFO, and we're going to talk about the disruption of the office of the CFO, talk about the changing role of the CFO, and also ask Dan for some advice and insights for those that may be earlier in their career. It's just been great to get to know Dan over the last year and a half, he comes with tremendous experience, both as a public company CEO after spending 20 years in finance and accounting where he started as an auditor at Ernst & Young and then went up the track, was FP&A, leader of FP&A at a large $20 billion company.

And then what's so interesting, I think, for our audience is that Dan has also had deep experience with some of the top PE firms in the world, Marlin and Vista, spending over three and a half years working with 15 to 20 different portfolio companies where he does pattern matching and helping finance executives figure out what it is they need to do best. So, great to have you, Dan.

Dan Owens (01:16):

Thanks, Randy. Really enjoy the opportunity.

Randy Wootton (01:19):

Yeah. And so, when we tried to pull you out of one of those PE firms, I won't say which one and talked about you coming back on the operator side, talk a little bit about what you were seeing more broadly across the portfolio companies, the struggles they were having and why Maxio seemed to be a good fit for you at that time.

Dan Owens (01:36):

Yeah, so a lot of the companies I worked with were sub hundred million dollars, a lot of them founder-led, maybe been through a couple of rounds of investments but really were making the transition to the PE world. So, had great product, not necessarily a great back office type or data type environment. So, it was like they'd won the lottery and caught the bull and now the bull had them so it was like how do you start running with the bulls instead of getting gored by the bull?

So, I think a lot of it came down to there's data everywhere, how do you organize it, how do you meet the needs of your new investors and partners as they grow but you still got to then deliver results. So, it was a really critical time to value organizing a team and, really, from the CEO's perspective, partnering with these CEOs and new CFOs to set them up for success in the new environment.

Randy Wootton (02:31):

Great. And so, then it became, I think, you saw this pain across your portfolio and then, not a huge advertisement for Maxio, but saw the potential of a solution like ours to help solve that pain at scale for B2B SaaS companies.

Dan Owens (02:44):

Yeah, absolutely. I can't tell you how many ... Well, the nice thing was I got to work with a lot of the investors as well as the management so it was an interesting role both at Vista and at Marlin because you were seeing through the lens of how professional investors looked at it and then from the lens of management and founders. Especially in the SaaS phase, it's how do you grow your customers, how are you retaining the ones you have and how do you sell into it, that is a huge challenge for a lot of companies. And more times than not, they were going from QuickBooks to NetSuite or Intacct, so upgrading an ERP system but didn't really have good command of their most important asset and that's their customer base. And then really understanding who do they sell to, who can they sell more to and then really gross net retention type considerations that were near and dear to every investor I worked for. Especially in a SaaS business, that's the heart of it, it's top line growth being most valuable, enterprise creator, enterprise value creator.

Randy Wootton (03:44):

Yeah. I'm going to put you on the spot and go off script a little bit so you can punt if you want. But having that unique view of being on the side of the investor and being on the side of the operator and having been an operator, where do you see most of the tension exist between ... We just went through a board meeting together with our investors at Battery and the way that we represent information and the way the questions that Battery was asking of us, you've seen this play out across many companies. Where do you see there being most tension around which metrics or how to view the business?

Dan Owens (04:18):

So, I think, really, a lot of times for companies, the bad point is what's the right data. So, for a lot of companies, you have the sales team reporting one number and your finance team reporting another number and the board loses faith or credibility in the management team. Fortunately, for Maxio, that's not an issue-

Randy Wootton (04:38):

Right, right.

Dan Owens (04:39):

... and that was probably the biggest plus for me that really attracted me to Maxio. The product really solved the one issue that the investors that I worked with were so interested in and that is having definite deep, deep knowledge of what's going on with your contracts and your customers by product, by cohort. The tension I saw with the different investment teams is can you even pull that information to say, "All right, your customers that you signed last September, what are they doing today and then two years ago and which products are doing what?" I think the management teams that have the back office solution that can do that are the ones that have less tension because it's not debating the facts, it's debating what you do with the facts. And I think that knowledge is power but having confidence in the data is the key to releasing that tension and really focusing on more strategic decisions to be made.

Randy Wootton (05:33):

Yeah. I think, as I described it, the worst thing about a CEO and a CFO going into a board meeting is going into math camp where the investors start poking and they find inconsistencies between what you may have represented last quarter or the quarter before. So, one of the things is having a common understanding of where the data is coming from, a framework for reporting on it, and then making sure it's consistent.

Dan Owens (05:54):


Randy Wootton (05:54):

Because it's super hard to go back and say, "Hey, our gross retention this quarter was 92%, last quarter was 88%," and they come back to you, "No, no, no, no, your board deck last quarter said it was 89%." And so, spending, wasting time around trying to get aligned on data and output versus the conversations those insights can provide is, I think, where there's real value.

Dan Owens (06:17):

Yeah, absolutely. And having a CEO that sends you emails at 4:00 in the morning saying, "Can you run the numbers this way?" and then not freaking out and saying, "Yeah, we can do that," that was a delight here.

Randy Wootton (06:32):

So, for everyone on the call, I do have this tendency to get up early in the morning with brilliant ideas. On the day of this board meeting, I had one ask for Dan and it literally was 3:00 in my morning time. Dan's on the East Coast, I'm on the West Coast and he was able to produce a report and ship it back to me before our board meeting that morning. So, I do think I will try not to do that going forward but it certainly is helpful to know that we have access to data so that, if there's a look or an issue you want to press on, you can grab the data easily versus having hundreds of hours of grinding out analysis. I remember that was my big aha being a customer of Maxio at my last company where I was CEO of Percolate was the CFO and his team would spend the first eight to 10 business days just trying to close the books, trying to get those financial statements out, didn't have time for anything else. And I'd be sitting there with my fingers on the table like, "Okay, when can we start talking about the operating metrics?" And then you'd spend the next eight to 10 business days with the CFO at nights and weekends working through the data and trying, to your point, to understand what happened with the cohorts. Pricing, adoption, attrition, how that plays out with segments and, more broadly, across regions. And so, you're sliding into the board meeting with the numbers hot off the presses and you're not sure because the Excel file is grinding down to a halt and someone changed the formula and everything went sideways and blew up. And so, there was always this time where it was this enormous pressure to try to get insights into the business right before the board meeting because you had to close. And the thing I really like about the technology today is you can push a button when the month's over and you pretty much have ARR and revenue.

Dan Owens (08:12):


Randy Wootton (08:12):

Which is what I think a lot of investors care mostly about is your ARR growth, how's that translating into revenue and churn, and then solving the closing of the books over the eight to 10 days, expenses to get the cash and get to EBITDA. Important but you're not going to spend a whole bunch of time analyzing that, you know how much you're spending on professional services and internal software, etc. So, have you felt that, at other companies, that tension of you're delivering everything at the last moment but you're not sure if it's right?

Dan Owens (08:43):

Yeah, absolutely. This is the whole time to value whether it's you're delivering a product to your customer or you're delivering it to your internal stakeholders. So, there's nothing worse than you're already done with the next month and you're talking about the past month and it's like, "Well, what good does that do me?" So, I think it's the shift of how you go from looking in the rearview mirror to actually looking through the front windshield and being able to drive and not worrying about if you’re going to hit a wall because you didn't have that real-time data.

Randy Wootton (09:14):

Great. And that's a great transition to the next topic that we'd like to talk about, a little bit about the changing skillset of the modern CFOs. In our earlier conversation, we talked about three dimensions that I'd love to get your perspective. One is the need for tech savviness and adaptability and how that's changed as you've seen it over your career. Number two is the importance of soft skills like leadership and communication. And number three is this integration of sustainability of the system so that you can drive from, what you were describing, the back office to the front office so that you have this reliable system so the value you're providing is really different. So, maybe comment a little bit on the tech savviness, adaptability, soft skills and then the transition from the back office to the front office.

Dan Owens (10:02):

Yeah. So, I would say, the tech savviness, especially in this day and age with everyone that's coming out of school or in an organization, you're flooded with data. So, I think Excel is now fully overloaded so it's a matter of, if you don't have that skill, it's partnering with someone in the organization that does it but I don't think that crutch is going to be available for long to where it's going to be incumbent on everyone to get more tech-savvy and being able to use data and access it. The challenge, really, now is how do you cut through the data, connect the dots, and cut through the noise because there's almost data overload. And I think that's one where technology can be your friend or it can actually be a burden when you look at all the nice, shiny tools out there that are going to solve your problem. But, at the core, you have to get to the fundamentals. The tool and the technology will help you get faster and more efficient at the fundamentals but I think ... I never want to be in a position where I can't get to the answer or have to do it. And I think, just in my career, I've always wanted to how do you harness the data, get to it but, with a limited amount of time, you also have to make sure you're surrounding yourself with people that do it. So, I think what's most critical is knowing the sources of data and making sure that the interoperability of the data between your systems is that you really have that architecture or blueprint of how you want the company to be formed and shaped so that you can share the data between systems. And that's probably one of the biggest things I learned at Vista. Whenever they did an acquisition or add-on, their first slide was data, data, data, literally. Just three words but it was so true that the pace in which they buy companies and accelerate through M&A, if you don't have that framework in place to how you harness the data to do it, you'll get crushed under it. So, they spent a fortune and landed an army to make sure they were set up with the right back office to be able to process and make good decisions that ... And they bought good companies so it wasn't like they were buying but their goal was to find good companies, put them together and make great companies and that was all based on the quality of data and the ability to make decisions off of that.

Randy Wootton (12:09):

Interesting. So, is that a combination of the technology ecosystem that you bring together, to make sure they're connected in a way such that the data flow is consistent from the systems?

Dan Owens (12:24):


Randy Wootton (12:24):

So, for example, we often talk about a monetization ecosystem and the connection between the CRM, usually Salesforce and HubSpot, and for the early stage companies, the general ledger would be either Xero or QuickBooks. And then, for running as a CFO, the financial operations and having that other pieces of technology, your FP&A solution, your tax solution, your CPQ system all being connected so that you're bringing that data together in one robust database.

Dan Owens (12:53):

Exactly, yeah. And I think so much more of finance today is really partnering with your go-to-market team. So, having that CRM with your back office accounting, just the whole ecosystem, and then your engineering product development of how do we all get insights? Vista and Marlin spend a ton of money on their CRM process. I have to say, our team here at Maxio has blown me away what they've done with ... I thought Vista was good but I have to give a shout-out to our Salesforce team here because they have integrated it beautifully and it's a company-wide tool, not just a sales tool. So, I think the ability to share, regardless of where you operate what application, it is by directional updating so everyone's always on the same page at the same time. So, I think that's key for every organization of, if you're working off different sheets of music, it's hard to sound good.

Randy Wootton (13:46):

Yeah. And so, I think you're calling out one of the really interesting points as we see more broadly, I'm a go-to-market guy, is the consolidation of go-to-market operations into more of a revenue operations role because you have so much complicated tech stack for marketing, sales, and customer success. And on that end, those systems don't talk well together and, if you're optimizing for one, you're not connecting to the other. And so, I think what you're pointing to is this idea a CFO is two things. One is expanding from even RevOps to business operations so you're thinking about technology and partnership maybe within the IT team or a RevOps team but how do you partner to say, at the end of the day, the customer record has to be accurate, has to be consistent with the way that we enter it, we report on it, we use it to drive subscription management and renewals. The other thing that I'd just like to poke a little bit on is what I was describing as going from the back office to the front office, the front office being the go-to-market team and the partnership that you have with either the CRO or the head of customer success. How has that changed for you over the years you've been a CFO or when you were at Marlin and Vista? Where did you see that partnership really work well? What were the characteristics of the CFO who was able to step into this role as a strategic advisor for the CEO, the CRO, and the CCO?

Dan Owens (15:06):

Historically, when I started, it was very much like a compliance back office role, and had a bad reputation of the no guy. I understand, there are a lot of creative salespeople out there so I've learned a lot with my friends in sales. I think it's definitely shifted where I was a public company CFO of a small company selling in the banking technology space and it was very much I was selling the financial numbers because banks are super conservative and they want to know you're going to be around. So, it was definitely partnering with the go-to-market team to like, "Hey, this company is stable, we've got backing, we're not going to be going away tomorrow." So, that was probably my first foray into really working side by side with the sales team.

There at Marlin and Vista, they spend a ton of time really focusing on top line growth. So, it's how do you optimize your systems and your go-to-market motion with your sales and marketing team and, everything from messaging to delivery, to then cross-sell, upsell. I think, here at Maxio, it's cool, it's the first time I've really understood a product that a company I'm working at and I'm a user of the product and our customers are CFOs, VP of finance controllers so this is probably the most I've ever sold. Actually, I'm trying to get recruited into the sales organization because they seem to have a lot more fun.

Randy Wootton (16:32):


Dan Owens (16:32):

But this has been a role of understanding that this Maxio solution solves a problem that it's a real problem. So, it's not like ... I know a lot of salespeople are telling you that you're selling your height potentially at companies. This, since I've seen both sides of the equation where investors are looking at what a company is producing at board meetings but what they're making decisions to grow the business on, having a solution that, personally, I'm benefitting from to your point of I don't have to worry about closing the books of revenue or being right, it's day one we're done and then also to be able to drill down and answer any board questions. So, it's a huge ... Having the right tool at the right time and a tool that can scale with you is also a big thing. So, to be able to sell, I think you have to be an honest broker to your customers and every company that does wants that long-term relationship. So, I think the salespeople that have done good leads looking at the long-term, how can I make a sale but continue making sales and that really is are you solving a problem for a customer. I think Maxio does that in spades and that certainly does for me as an internal user of the solution.

Randy Wootton (17:41):

Yeah. Well, when I was at Salesforce and being in more of a go-to-market role there, I said, not that it's easy to sell, but it's a lot easier to sell when you're able to open up and say, "This is how I use Salesforce."

Dan Owens (17:41):


Randy Wootton (17:52):

And so, I think, similarly, when I talk to CEOs, this is how we look at the company or when you're talking to CFOs. So, I do think, in terms of your partnership with sales, it's unique here and that was one of the ways that we sold you on this was you get to be our best customer and tell us everything we need to change.

Dan Owens (17:52):

That's right.

Randy Wootton (18:08):

So, you get this opportunity to inform the roadmap as well so that's super cool. I think the thing that I have appreciated and what you've brought to the team and how you help us think about customer cohort analysis and looking broadly across where things are working and where we could be improving and being at the seat of the table when we are thinking about those strategies. So, we've done sales segmentation, we've done customer segmentation, we've talked about unit cost economics and how we can ... We got to be deliberate and intentional in what you offer to different customers and, big customers, you can afford to put more services but small customers don't have small needs. And so, there's this-

Dan Owens (18:08):


Randy Wootton (18:48):

I think one of the things that you've helped with, and I imagine many CFOs as they move from the back office to the front office, is what are the set of products we can put together, what's the profitability associated with customers where you have a CAC payback period that might be north of a year or two and so you got to keep them. And so, what's the long-term profitability offset by the initial investment that you're making to acquire them, I think, is, again, where CFOs can really step back from just saying here's your gap to here's our go-to-market strategy and investments that we can make. Well, great, Dan. So, you talked to a bunch of CFOs, what is the number one or number two challenges that they're facing other than, hey, they got to get smart on tech in building teams and feeling like they're able to be successful? What are some things you would share from your purview with people who are just getting started with their career or even people that are journeymen, that are middle career?

Dan Owens (19:44):

Yeah. I think, right now, like with a lot of things, finance is a team sport. And I do think, right now, if you see in the news, which is somewhat surprising to me, the decrease in the number of people going into finance and accounting in particular, that's a little scary. Although I'm glad I'm on the back end of my career because that is going to be, to me, it's a huge opportunity. So, a challenge of how to attract people into it, the field because businesses will need that talent to help execute on strategy and you've got to have that mentorship pipeline to develop people. But I do think, a lot of people, whether it's in finance or even software development, COVID especially made it a geographic ... The lines were erased where you're trying to find the best talent anywhere in the world and it opened up because of limited resources in where you get that capacity.

So, I saw that a lot with software developers and seeing now finance professionals are coming into that same boat. And especially tech-savvy finance professionals because you're looking beyond ... I think, especially with the advent of AI and some of this quantum shift that we're going through, it's not going to be recording information, it's going to do you understand the business process, where the information is coming from but it's going to be much more about the analysis and deciphering and then providing insights and options to the leadership team and the company as opposed to right now. It's still now, even with all the technology, I'd say the bulk or probably 60 plus percent of the time is still capturing and recording and you get a fraction of it and, actually, let's see what we've done and actually be able to analyze it and come to a conclusion which is surprising but not so surprising given finance is typically pretty cheap and you see a lot of people still on Excel and there's a lot of other solutions. But there's also a lot of risk in that because the, one, reputational risk but also just formula errors and then even beyond that is collaboration. So, how  do you get tools that get people on the same page that it's not just finance and they come out of a room and say, "Here's the numbers." My goal is how do we get our whole ELT management team looking at the same time on the same pages bringing their lens because you have that bias to look through your own lens. It's getting other people in your organization that can be part of the solution but embedded in the process and you're sharing, bi-directionally, information as they're your customer. So, I think that's one. The other one is you've got limited resources. So, I think, as finance, the challenge is everyone's asking for that new, shiny tool thinking technology is going to solve their problem. I think you do have to be the gatekeeper and know when to say no and this gets to what's the return on the investment here. Because you can spend millions of dollars on technology and, if it's not improving your top line or improving the bottom line, then is it really there?

And I'm a victim of that too. You get that nice shining tool that looks cool and you want to try it but, at the end of the day, technology is a tool. So, is it making you make a more efficient better decision or is it nice to have? And I think that's the challenge a lot of CFOs are having.

Randy Wootton (22:56):

Yeah, great. So, a couple of different challenges. One, is under talent and just the supply and demand of people that are actually going into accounting. I wonder if AI and the way that it's going to help reinvent the accountant's role will change such that more people will think it's attractive, it won't seem as grunty. It'd be more about prompt engineering being able to get your audit done and providing some intelligence. I think the other piece you were talking about, so there's a dearth of talent in the market, so where do we go find that talent? There are people across the US and then I also think globally. We've hired some folks in the Philippines on the accounting team, finance team.

I imagine that's very different than what you were even 10 years ago where you wanted to be able to walk around and talk to everybody on the finance team in the office at the same time. Other than the sharing of information and access the same information through technology, how have you changed the way you've managed a finance team given this global dispersion in the world of remote first world that many companies are living in?

Dan Owens (23:59):

Yeah. I think I was probably an early adopter because I worked with a lot of teams in India, and Europe that were different time zones and multinationals, I had people all over the world that I was working with. I think COVID certainly accelerated that and Zoom and technologies like that made it better. There is nothing quite like meeting someone in person. I learned that at Marlin working with the seven or so different companies that I worked with there and technology can be tough too and getting a chance to meet people face-to-face makes technology a lot easier. But I think, at the end of the day, there's certain what's expected of the delivery and being very deliberate on roles and responsibilities and a way to measure that, I think it's being flexible. Especially with different time zones when you're halfway around the world, it's making sure you've got good overlap and that you're flexible on both on your end and their end to what's the best and it doesn't have to be one size fits all. But I do think I've really come across a lot of talent that it was like you're missing the boat if you don't open your eyes to the opportunity out there. And then also, the cool thing, especially with our team members that are in the Philippines, they've worked for some monster companies.

So, as a small company looking at some of these talent resources elsewhere in the world, they actually can add to your team and make it better because they've seen scale and stuff. So, especially with small companies looking at how you scale from best practice, a lot of times you can get great ideas and recommendations that you wouldn't normally have gotten just looking in your own neighborhood.

Randy Wootton (25:36):

Yeah, I think that's great. I think there's the idea that, oh, this bias of it can only be done in Silicon Valley and we know how to do it versus our engineering team is ... We have great folks in Atlanta and around the US but we also have very strong contingency in Krakow, Poland. And just this idea that you have experts around the world, how do you go find those experts? So, to your point, rather than just low cost labor markets over getting cost arbitrage, instead, there's this opportunity to really get great skills too and you're not giving anything up. You do have to make some compromises, to your point, and figure out how to mitigate and set the context to be successful.

The other point, the implied point you made was, I think, that remote doesn't mean cheap. Meaning you're still going to spend money, if you're going to do it right, you got to bring people together. And if you have people scattered around the world, it's going to cost something. And so, how do you set up the context for T&E for the functional leaders to be deliberate about when they bring people together, including the finance team? How and when do you bring people together? So, I guess what you heard here was Dan Owens said more T&E is good.

Dan Owens (26:43):

Yea. As long as it comes to bookings.

Randy Wootton (26:48):

There you go, tied to bookings. The other one that you were alluding to a little bit earlier, and maybe this will be our last point before I go to the speed round, was the internal use software. And I think what's so fun about being in B2B SaaS specifically is you're selling software to other people who buy software and so everyone buys everybody's software. And I think what we've seen most recently, in the last year and a half, is this tech recession where everybody's slowed down or doing deep dives into the broad set of technologies they have on board. I know, with Battery, they talk about 2% of revenue as being a target in terms of spending on internal software, not cogs, but internal software for functions. Is that consistent with what you've seen at Marin and Vista, similar types of percent of revenue? Or how did you think about the budget for internal software, the parameters, and the envelope that you would like the teams to get to?

Dan Owens (27:39):

Yeah. So, probably at a 30,000-foot view of how do you fit within your debt covenant and managed cash and then probably ranking priorities and where the return on investment is. I think, definitely, I've seen some rule of 50 companies that are spending a million dollars on software, they're lean and mean and I think that's probably ... They're very lean and then you've got a question are they under investing in that. So, I think it's not necessarily a hard and fast rule because I think a benchmark's a guideline but I think, if you can demonstrate that that investment and that internal use is saving you X number of headcount or your deal volume is directly proportional to that tool that's augmenting your staff, that, to me, is more of a guiding principle of each investment needs to have its own ROI and how does it stand on its face.

But ultimately, I think the things that value a company are top line growth is probably the number one driver and then second to that would be your EBITDA type margin to how do you triangulate that. But with limited resources that's why it's a difficult gray area, a lot of moving parts and especially I appreciate the tools of ... My job is how do I get information out to my customers, internal and external. So, anything that can help me do that quicker but I've got to weigh what's the cost of doing that and is it worth an extra day of time or not. But ultimately, I think each department head has that role of how do you support the investment and that requires honest feedback from your other colleagues of saying do you call BS on that or I've got other supporters here that says it's worth it. But yeah, I think, realistically, that 2% is a good benchmark to shoot for.

Randy Wootton (29:29):

Yeah, and a couple of thoughts just to follow up on that. One is, as an executive team, learning how to do business cases or NPV analysis. And it's not going to always work as a tool, it isn't going to necessarily drive revenue or be directly attributable cost reduction but I just think having the team thinking in those terms is one way a CFO shows up is able to help the whole team learn finance and learn how to do business cases.

Dan Owens (29:57):


Randy Wootton (29:57):

Number two to that point, I think, especially this is why I like this stage company is the first team, the executive team needs to have a common understanding of the business, what we're trying to solve for in terms of the growth profile and what we can invest and then what does that translate to if we have specific EBITDA targets that we're going after as well and solve the problem together. And it's not like the CEO and the CFO go to the board and get the budget and say, "Okay, it's coming down from on high now you need to go execute," instead it's a much more powerful plan if everyone has contributed, felt like their voices were heard and were a part of the trade-off decisions in terms of identifying relative priorities, how investments are going to make an impact.

Dan Owens (30:43):


Randy Wootton (30:43):

What I find, and I'm probably now going to upset all the people on our team, is what's often missed is accountability. So, people will do the business case, you'll have this conversation, they'll say we're going to deliver this many more leads or this much improved retention but then we don't close the loop on the backend to say did we really get that? And I know, in our own example at Maxio, there's one or two pieces of technology that were sold to us, you and me, and we have our eye on it and we're going to be like, "Well, I'm not seeing the return yet, we're going to pop that out."

Dan Owens (31:16):

Yeah, exactly.

Randy Wootton (31:16):

So, it continues to be a conversation. Are we getting the payoff on the investments we're making in engineering, go-to-market, technology, and professional services? But if you have that ROI orientation, are we creating shareholder value over time is really different. All right. So, to close this out, Dan, we've had a great conversation around your journey as a CFO, the themes of disruption in the office of the CFO, and how the modern CFO is evolving, here's our speed round. What's your favorite metric? Of all the SaaS metrics you see every month, we track 27, which is the one you like most?

Dan Owens (31:54):

It's probably boring but it's gross retention. It's probably my favorite because you can mask other things but, at the core, if you're not keeping the customers that you signed, it's really hard until you can't get the benefit of that investment that goes into it and you certainly don't get the ability to upsell or cross-sell and then your net retention type metric. So, it's like a foundational metric to me how good are you at ... You landed the opportunity, now you got to make them happy and then grow with them. So, if you're not doing that, then, fundamentally, you've got structural issues that you've got to address.

Randy Wootton (32:30):

Yeah. And I think, to that point, just again going back to, if your CAC payback period is 18 months or two years, you've got to hold them at least for that period of time before you even start making money. So, you-

Dan Owens (32:30):


Randy Wootton (32:40):

Yeah, it's really ... And, for me, if you pull that apart, it's that what's up for renewal and what's your renewal rate because then that leads to the long-term gross retention. All right, second question, last one for you. What do you think is the most misunderstood metric as you're talking to executive teams or you went into those portfolio companies where people were like, "Oh yeah, we got this thing sorted," and you're like, "No, no, no, you're totally messing it up"? What's the one that's most misunderstood?

Dan Owens (33:08):

I think it's probably a leverage ratio. I think COVID really helped companies really get back to basics but that leverage ratio is how much of your gross margin is going back to invest in the business. So, if you're getting more lean and mean in your operational efficiencies, that means there's more of that gross margin, you can prove it back to product and sales and marketing. But it's a definite, I think, feedback metric that says, if you're improving and getting it, especially in the SaaS environment, that you're doing the right things with what you're generating and how you're investing in it.

Randy Wootton (33:43):

And what you have found is teams that you've worked with haven't put their head around that or they haven't fully appreciated the potential leverage you get by improving your gross margin?

Dan Owens (33:53):

I think, unfortunately, the teams that I've worked with are just trying to get to gross retention and it's more of the data challenges of there. And I think that's that next level of analysis of, once you've got your house in order or building capacity to do that, then you're really peeling the onion back and looking at these different drivers and now you're doing fine-tuning at that point. So, I think that's where tooling can help companies get past the first level and then get the 200-level type analysis how do you now look for those pennies that turn into dollars?

Randy Wootton (34:29):

Yeah. And talking to our GP, Chelsea, at Battery, I thought it was fascinating. The way they look at businesses is they have a cash engine and a growth engine. And the cash engine is what you're describing, in other words, a leverage ratio and how much are you actually generating, covering your cost in R&D, sales, and marketing, G&A that then you can invest in growth or retention or you put the money on the books and you get ready to go do some M&A but you have to have both engines firing on all pistons or cylinders, whatever the right metaphor is, for you to be flying and then you continue that trajectory. So, awesome.

Well, Dan, it's always fun, really appreciate, one, you joining the company. Number two, you are willing to talk to us about your journey and some of the insights you have. And then, number three, for the audience out there, I'm sure you'd be willing to chat if they wanted to reach out either on LinkedIn or via email about the things you've learned and the way you're looking at the world and the broad recommendations you have across the entire tech stack, not just Maxio, but how to tune teams and build global organizations. So, thank you.

Dan Owens (35:34):

Awesome. Well, Randy, thank you so much. I so much enjoy being your copilot and, actually, since you're a naval aviator, it does mean a lot but your drive is fantastic so thank you so much.

Randy Wootton (35:45):

You're welcome.

Dan Owens (35:46):

And anyone on the podcast, absolutely, reach out to me. I love building a network and sharing ideas.

Randy Wootton (35:52):

Great, thank you.