SD: Congratulations on your move to Amobee. What made you want to move there?
CF: I thought Amobee was an incredible opportunity. I’ve worked at a late-stage private that then went public. I’ve worked in Investment banking, consulting to those types of companies. My first CFO job was at Ubiquiti, which was a ride into the public company landscape. I thought Amobee was a great opportunity to work with a very late-stage private company (we are actually a division of SingTel) with aspirations of becoming our own public entity. I thought that really fit well for me.
SD: What are some of the challenges that you are excited about at Amobee?
CF: Amobee is a very young company, a product of 3 different transactions that have come together. My investment banking background has a lot to do with M&A, those types of transactions. These were 3 companies that needed to come together as a single operating unit on worldwide basis. I think it is going to be really interesting bringing them all together.
SD: What’s the size of the company right now?
CF: We have about 450 people currently, and doing hundreds of millions of dollars of revenue.
SD: What experiences have you had in the past that you feel will really help in your new opportunity?
CF: A long time ago, I worked for LoudCloud. They were a late-stage private company, and they were all over the place. It was a high growth company that was trying to find its sea legs in terms of an operating business model. You had an incredible amount of talent from a management stand point. There was a lot of great energy that went into the company. When I worked at LoudCloud, I saw the entire life cycle of the company right in front of your eyes. From a VC Start-up, it then became public company and the business model was challenged then we ended up selling. I thought it was great to live through both the entire up and down of a corporate infrastructure.
After leaving LoudCloud is that I went to business school to get more training. I had this great experience with LoudCloud, but I really wanted to consult to companies that were facing the same issues. How do you deal with High Growth? How do you deal with changing business environments? What’s the best path for exit? Those are key points of any company’s life cycle, and to be part of that was pretty empowering. I chose the banking path because I thought it would be the best way to work the most companies as quickly as possible.
SD: When did you realize that you wanted to become a CFO and that was the path that you wanted to take?
CF: I was really enjoying my banking career. I was the lead banker when we took Ubiquity Networks public, and I had a very good relationship with the management team. When Ubiquity was making a CFO change after the CFO announced he was resigning, I put in a number of candidates I knew from my time in banking. After they went through the candidates, they said “why don’t you take the job”.
At the time I really hadn’t considered the CFO path.
I think in the back of your mind when you’re doing investment banking you kind of wonder what the end game is. At some point you don’t want to be 60 years old and getting on a plane 7 days a week for hour long meetings. Some of the people in investment banking move into a corporate development role, some down cycle their investment banking and work for a smaller firm so they can have a little more career control.
When I heard about the opportunity, I said to myself that while I hadn’t really thought about the opportunity, the upside is absolutely tremendous. If I was thinking of an end game for my investment banking career, I couldn’t think of a better opportunity to walk into a multi-billion dollar company from Day 1 and assume the role of the CFO. It was the chance of a lifetime.
SD: You moved from investment banking to a CFO role where it wasn’t part of your plan but it was an exciting opportunity. What are some of the things that surprised you when you made that transition?
CF: I’ll tell you why I really liked the role, then I’ll tell you about what surprised me.
Everyone in investment banking sees themselves as a top tier McKinsey consultant, except they know a lot about finance. The issue is that when you’re in banking, you’re really not accountable for the end game of the deal. You’re putting two companies together from an M&A standpoint, but at the end of the day you don’t live with the transaction. The execution of the transaction becomes someone else’s problem. You can package an IPO, but you don’t live with the company and have to be there for the next 10 earnings cycles. You’re not empowered, and you don’t have much accountability passed the transaction.
As I started thinking about what I would like to do in my career, I thought that having 1000% accountability for transactions and decisions that you make would be really exciting.
That’s how I talked myself into that this is something I could do, and that I wanted to do.
I’ll tell you what my biggest concerns were – and then I’ll tell you what my biggest surprises were.
When I first started my career, I did public company accounting with PwC in New York. I did that for 3 years as entry level, early career kind of stuff. I then moved away from the core accounting. My initial concern was “how long would it take me to get back in the fold of day to day accounting operations so that I was comfortable signing the financial statements?”
I knew that was going to take a lot of effort on my side, besides the fact that the company had a lot of strategic and operational changes that they needed to make. It’s a line by line understanding of where the dollars are going before you can get comfortable. I had to lock myself up. It took me the better part of a couple of months to get to the point where I felt that I was extremely well versed where the company was and where it was going.
And then what surprised me was that you kind of think of a company as an entity, using a battleship analogy, where it’s really hard to turn a company because it has its own trajectory and culture. What I found was that in a company with 500 people or so, is that you can make impactful changes very quickly and that was the biggest surprise to me. You can come into a new organization with new ideas and make substantial changes and have them permeate all the way through the organization. And you can see the results almost instantaneously.
As an example, when I started, the company’s DSOs were in the high 60s. I was told that this was the industry standard that’s the way it’s done. We objectively looked at the problem and said there are ways to make some changes that will fundamentally change the way that we look at this, how we collect money and close the gap between what we’re getting paid and what we’re owed. At the best, the company got that down to 24 days. That was a substantial improvement.
One person can come in and really make a change for the better. I was a little bit naïve thinking that, regardless of the leadership, making change is very difficult within an established organization.
SD: CFOs are sometimes looked at as Mr. or Ms. “No”. How did you connect with your peers and what did you learn from that experience?
CF: I was fortunate that I did not walk into a situation where we had a tremendous amount of cash constraints. We were in a high growth mode, so it was more like “what is the most opportunistic way to leverage our spend so we can get higher returns”. Our recipe for success was making individual business units accountable for their time and expenses. Meaning, if you’re building an R&D project, how are you budgeting your time and the resources that you have, that meets the deliverables that are in front of you.
Plans change, projects change, scope changes. As long as there is a dialog and have a collaborative way to think about the end game, as long as there is accountability, everyone is on the same page. At the end of the day, you can say that either it was a successful venture or it wasn’t, and you have some way to benchmark it. It’s not that you’re sitting there saying no. You are empowering people so you can make the right business decisions.
SD: What career advice do you wish you were given before you started your MBA?
CF: I wish I had made the move to CFO sooner.
SD: How do you manage all those multiple goals that you want to be able to accomplish with only 24 hours in the day?
CF: We are around the world, so I use Skype a lot. I have a lot of business partners here, a team that supports me, and I’ve empowered them all, in certain aspects of the business, to affect change. I think they were a little bit afraid to do that, for fear that will be some ramifications of making those decisions. I’m using the leverage points that I have, which are the people that I work with. In some cases, I have seen some major gaps in the finance function that need to be automated, and we’re making investments to automate those. I believe we will be able to find a lot of efficiencies based on those two pieces.
SD: What do you find exciting about the environment at Amobee?
CF: Strategically as I was thinking about my next position, I wanted to get closer to software. I’ve been working in a hardware environment, and everything is software driven, even if it’s hardware. The differentiation is in the software layer. I wanted to get closer to a company that was using software to differentiate itself.
The industry that I work in, digital marketing for mobile, has a lot of “me too”. Our company is built on an analytical platform that allows you to analyze and justify your marketing spend against how it is being received in the field. I thought this was really empowering, and I like models that is extremely differentiating in a ‘me too’ environment. What I saw here is a company that has great technology, a very powerful sales engine, and needed a lot of help on the finance side to get things coordinated. For me, this is a project within a project within a project, and believe that if executed correctly, we can accomplish great things. I think this is a very exciting opportunity.
A CFO Success Story is a feature of Samuel’s CFO Blog, where Samuel Dergel follows up on his book, Guide to CFO Success, speaking with CFOs featured in CFO Moves, Samuel’s popular and comprehensive weekly report on CFO Movement across the USA.