On being the first finance hire
Bobby Pinero | | 3 min read
Ed Park was the head of FP&A at Facebook through their IPO, then joined Asana as their first Finance hire, and then was CFO at Enjoy Technologies. All 3 today are publicly traded companies. You’d be hard pressed to find a better run as an early finance hire!
Today, Ed and I sat down to discuss the transformation of the early-stage finance role. This is a must-watch for anyone looking to take on the role of first finance hire.
Everything is Finance
Ed started off by explaining a key philosophy: finance’s first and foremost responsibility is tolead the creation of the business model. The presence of finance in every element of the company provides a key opportunity to create a shared strategy and clear vision for the entire team.
“Finance has this unique opportunity to bring together the organization, to serve as that glue to create this first narrative of the business model, and to bring the organization along for the journey.”
This all-encompassing, visionary role for the early finance hire might surprise you. We often think of finance as a team that manages spend, sets budgets, creates financial statements while leaving the strategy and vision to someone else. Yet that’s exactly where a first finance hire should focus.
Ed described this process as a multivariate equation, with all these inputs leading to an output: revenue. A CFO essentially collates all activities of the business and tries to most efficiently translate them into an equation. This requires a deep understanding of what drives the company’s success.
3D28: Find a (Working) Framework
“Why are people paying us?” It may not sound like the first question a finance hire would ask. As Ed explained, locking in the business model starts with finding what customers love about the service, why they’re willing to pay for it.
That question drove Ed in his role at Asana.He focused his initial efforts on trying to solve that multivariate equation that drove revenue and from that “3D28” was born. Ed found that three users on a team, active at least every 28 days on average, were the two best leading indicators that somebody would become a valuable customer over the long term.
“3D28” became a mantra at Asana, with the whole team focused on maximizing those users. It built a shared strategy and model for the business’ core value offering, boosting growth and retention in the process.
Ed has a key bit of wisdom here: don’t obsess over perfect causality when you explore these data relationships. The most important thing is to start somewhere, foster an environment where the best ideas win, and never be afraid to revisit your assumptions.
Prioritize Your Roles, Ask for Help
Ed referenced Maslow’s Hierarchy of Needs as a metaphor for finance. The core functions of the job, such as getting employees paid on time, should be squared away before leading on a shared vision for the business. However, he warns against spending too much time on perfect execution of rote tasks such as tax accounting, payrolls and reimbursements.
“You don’t need to be getting the A+ in getting expense reports reimbursed… free up as much of your time for [things like] unpacking the funnel… building relationships, building trust, and having multiple conversations with the entire org.”
I couldn’t agree more. Reimbursements and other day-to-day tasks are important, but if you don’t fully understand your business and execute on a shared strategy, there’s a good chance your business won’t be around for long. If you’re spending more time on receivables than building a business framework, you’re doing the job wrong.
Lastly, Ed talked about something I and anyone else in the field know all too well: The Curse of Finance. Feeling like you have to be the last to ask for resources, since you're tasked with increasing company efficiency and profits, is a common burden for finance leaders. At many early stage companies, the department is often under-resourced.
“Resources are finite, but if you really are making strides on the impact of the business, you shouldn’t be afraid to bring more people on… Don’t be afraid to ask for help”.
Ed says that bringing on new hands, or tapping other team members such as engineers for help, is one of the most crucial and unfamiliar skills for a finance first hire to build.
CFO: Chief Framework Officer
Ed brought some great wisdom to anyone taking on the role. The key takeaway is that finance isn’t just about rote measurement, reporting, and resource management. In fact, that’s shouldn’t even be where half of your daily time and energy goes. Finance is about building frameworks, giving a deep, shared understanding of the business model, and driving growth through experimentation.
By Bobby Pinero
CEO and Co-Founder of Equals.