Airbase, a spend management company currently processes over $5 billion of annual payments on behalf of finance teams. It is a pain point Vallurupalli is all too aware of. “Moving to Airbase solved a challenge I had personally experienced at previous companies were there were 65 or 70 physical [credit]cards in a 300 person company and spend was not controlled. There was no way to forecast when someone was thinking of using a physical card, which was for anything at that time”.
CFO Aneal Vallurupalli joins Paul, on Datarails’ podcast FP&A Today, to talk about what CFOs increasingly require from the best in FP&A, his experiences of financial planning and analysis at previous companies, stretching from investment banking to series A companies and public companies.
In this episode:
• The importance of understanding the context and priorities when coming into a new company or role. There’s always a rationale for why things were done a certain way before.
• Building credibility and relationships across the organization by understanding pain points, providing value , and conveying industry expertise.
• Moving from growth at all costs in SaaS to revenue growth
• Why he has no single favorite financial metric to analyze a business. The most important metric is often “not financial” and varies by company.
• How AI will displace some repetitive, manual tasks but not logic-based and contextual decision making which is core to finance roles.
• Why having a hunger for knowledge as the most crucial way to win in your FP&A career – with most technical skills being “table stakes”
Follow Aneal Vallurupalli on LinkedIn:
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Watch the video episode on YouTube
Paul Barnhurst
Hello everyone. Welcome to FP&A Today. I’m your host, Paul Barnhurst. Aka the FP&A Guy. FP&A Today is brought to you by Datarails financial planning and analysis platform for Excel users. Every week we welcome a leader from the world of financial planning and analysis. Today we are delighted to be joined by Aneal Vallurupalli, CFO of Airbase. Aneal, welcome to the show.
Aneal Vallurupalli:
Thank you. Pleasure to be here.
Paul Barnhurst:
Yeah, really excited. So just a little bit about his background and then we’ll get into some questions we have for him. So he comes to us from the Bay Area in California. He’s currently the CFO, as I mentioned at Airbase. Been there a little over two years. He earned his degree in business from Santa Clara University, and he hosts the podcast. What I wish I knew. We will get started here. The first question we’d like to start people with is what is the most challenging or worst budgeting experience you’ve had in your career?
Aneal Vallurupalli:
It’s a great place to start. I’m sure many can relate to this. I had experience about eight, nine years ago when I came into a company as called the first FP&A hire. I came into the company and the company really had maybe one accounting manager and was still on QuickBooks, right? So didn’t have GL and ledger information. I just started for a new COO who had started three, four weeks prior who knew me. He was a prior COO of Twilio and some other great companies before that. And so a great leader and he hired me to be the first FP&A leader and to build the first model for the business. So I came into the company quickly realized there was not much thereof, a real forecasting financial model. There was something that was summarizing historical actuals, but not even in the realm of what we would want in FP&A to understand how is this business performing, what’s been historical trends, et cetera. And to give you a sense for what I mean on the historicals, they did not even have payroll or expenses, employee expenses segmented out by departments. It was all under total opex. And so they did not have an HRIS system either yet. So
Going and taking the full list of employees, categorizing everyone, the departments that they’re actually in, then adopting an HRIS system and taking this information and dumping it into there and getting folks to logins as part of that. So this effort isn’t all for naught. And so that was an awesome experience because ultimately the company was really starting from scratch and all of this was asked to be done in five business days. And so take all of the historical data, build something of it, and then forecast what we can do going forward to a level of some degree of accuracy. So I’ll say that I did not sleep that week. It is all possible to get done, but it was one in which I walked in and there really was not historical information that could even help me. So having to recreate all of the historical P&Ls was fun.
Paul Barnhurst:
Yeah, not surprised. There were some late nights. I think one of my favorite stories around that, when you mentioned all the headcount, I had worked for a company where we had huge problems with all the headcount. It had been a mess, and they decided they were going to try to restate it all and get it correct. And somehow I got to be the lucky guy. I was working for the regional CFO to roll it all up, and the guy who was in charge of the product project, he was on his way out the door. So he was just parroting whatever they told him to do. And he goes, you need to make sure for the last two years you get all the headcount right? It’s all wrong in the system. You can’t use the HR data, you can’t use the finance data, and you should talk to all the managers. And we had high turnover. I went to my boss and we’re talking thousands of employees, not hundreds. We had call centers. And so I went to my boss and said, the only thing I can guarantee you is this will be wrong. There’s nothing beyond that I can guarantee
Aneal Vallurupalli:
You it’s my perspective, but it would likely not be a hundred percent right. I mean the fun ones there are like how do we allocate CSS in support heads? Are they to COGS or to sales and marketing in some cases? What’s the tweener there? Have we aligned on the actual definition? So it’s repeatably applied going forward, the fun ones G and A wise, does business analytics and business operations fit in G&A or is it allocated out across the departments on the p and l? Right Ops, and we can keep going on and on to where it’s not just, Hey, il, go sit down in a room and figure this thing out. FP&A truly about cross-functional collaboration.
Paul Barnhurst:
A hundred percent agree. So you talked about that budgeting experience in the five days. What was maybe your key takeaway or learning from that experience?
Aneal Vallurupalli:
I think that maybe not that specific experience, but what I will say is my experience coming into a few different companies. So my background is ranged from companies that are as early as series A to as late as newly public leading that business around, call it $8 billion of market cap and about a few thousand employees. What I’ll say is that no matter what type situation we walk into in FP&A or finance as a whole, there is some level of prioritization that came in the past that had a rationale for it. So there’s a reason why this company didn’t focus a lot of its time on building a model. That company at this company was growing 350% year over year and was super high growth business and had product market fit. The real only thing they really cared about on the P&L was being able to forecast cash outside of that. They’re like, what can it tell us? We’re doing great. Okay, great. That’s awesome. And I think stepping into any role, having the level to understand that we come with our past baggage and context, but there’s no playbook. We just reapply it. Every company we go to, there’s always context at that existing business.
Paul Barnhurst:
I really like that. I said there’s always context. You can’t just take the playbook without tweaking it. There’s going to be something different everywhere you go. So true. So can you start by telling us now a little bit about your background, how you ended up where you’re at today, what’s your story?
Aneal Vallurupalli:
Yeah, so as you mentioned, I graduated Santa Clara University happened stance that I got there. I ended up being recruited for a sport that we can talk about later, but ended up playing at Santa Clara and then fortuitously ended up getting into investment banking after Santa Clara during the recession in 2008. Not a time when anybody was really hiring, especially in San Francisco in the Bay Area. And I was fortunate enough to land a gig there. I say that a lot of folks were trying to get in and Santa Clara is by no means a feeder school into investment banking. It’s corporate finance like eBays, Yahoo’s back then, but definitely not at ib. I spent a few years there. I specifically worked mainly on buy-side, sell, sell-side transactions and enterprise software. One of the companies that I was on an active engagement for ultimately ended up deciding to go public. I helped them through that process and joined that business as the first corp dev hire. And during my five years there took over corp devs, strategic finance, global sales, operations, pricing. And that was kind of a catch-all job, being able to touch everything at this company that now 20% of the entire world’s property and casualty insurance processes through Guidewire systems. So literally nationwide State Farms, All States, 20% of the world’s property and cash, which is your homes, your cars, your boats, your jewelry, everything. The software is being processing that for the insurers.
And from there, I said, I spent a few years in this and this has been fun. And once you get to about 3000 employees, instead of having breadth, you end up having specialization in certain areas, right?
Paul Barnhurst:
Yep.
Aneal Vallurupalli:
Very normal. And nobody should ever take that personally if that’s happening in your career. Companies grow, right? And they dictate that that occurs. And so I ended up saying, I want to go smaller. I want to go smaller to smaller business. And that is when fortuitously, one of my wife’s ex-bosses reached out and said, Hey, you know what? I want you to come start finance at this place I just joined. I’m the COO and president here. Let’s get running. I was like, all right, this looks interesting. From there, we did well there for about two and a half years. From there I went again, a little smaller. And in this role though, instead of just running finance, I took over all of GA, so finance, operations, it, hr, recruiting, the entire fund G&A across 30 countries. And so for me, one of the things that was super important in that was that even though I’m never clamoring to take over the people function, they’re very good people leaders out there that you can manage or hire to be your peers.
I do think it’s very important that every operator at some point in their career manages the people function. It gives us a much better sense for outside the numbers, perspectives that are necessary and real factors. Ultimately, I met when I went to that smaller business where I managed that across many countries and I highly identified with the problem that airbase solves, meaning that I was working in all these disparate solutions like the bill.com, the Expensify, using amexes. Speaking of forecasting, when you asked about that company that I first went into, which was a nightmare, there were 65 or 70 physical cards in a 300 person company spend was not controlled. It was just happening, right? No way to forecast when someone was thinking of using a physical card, which was for anything at that time. And so I met Thejo Kote [CEO of Airbase] five years ago, and as I built the last company I identified with the perspective, our CEO founder, the JO here is taking around, this is a software workflow issue we’re solving, and eventually said, you know what? I want to come join that. It’ll be fun to be on that journey and play a role not just as a C F O, but as a CFO of a CFO’s company and have a lens of a perspective on product and engineering and go to market and positioning. And so yeah, it’s been fun.
Paul Barnhurst:
Great. So can you tell our audience a little bit about what Airbase does? So if somebody’s not familiar with the company, what’s kind of that core product that you guys sell?
Aneal Vallurupalli:
Yeah, so fundamentally companies spend money in two main fashions, right? That’s payroll and everything else. Airbase has a system that consolidates everything else into one software solution. We do that, it’s called procure to pay. You can call it spend management, but ultimately we do that with four main products. One product is called Guided Procurement. That’s called intake, right? So what is it like when you’re in this big company that’s 5, 6, 700, 2000 employees and every single employee at some point will request spend? Where do they go? They go into Airbase and they hit request spend. And fundamentally what guided does is it solves the collaboration problem around spending. How when I say that I want to request a software spend, do I then automatically within the software because I’m integrated with HRIS systems, pull in the InfoSec person, the IT person, the legal person, the fp and a person for budget review, the controller for payment terms, the manager to approve that, spend all of that collaboration happening within Airbase through that upfront guided procurement workflow.
And sitting underneath that, we have the methods by which you could ever pay cross-functional and across the world. So obviously one being Bill payments, (AP) right? Accounts payable, two being expense reimbursements. How do we reimburse our employees for the dollars that they spend on company behalf? And then finally three is cards, physical or virtual cards. Airbase does that in the form of airbase cards as well as Amex cards and S V B cards that we’re partnered with. So fundamentally, we are solving how to consolidate all non-payroll spend into a single software solution globally.
Paul Barnhurst:
Got it. Great. And when you said the procure to pay, that brought back memories. I started my career in procurement. I worked for the government buying stuff. So very different environment. Yes, I worked for a Navy base and I was doing very unique procurement. I still remember one time working with someone to buy a bomb basically
Totally different than your typical procurement and all kinds of different things, a lot of service. So it was a really unique,
Aneal Vallurupalli:
My last company was a company called Mattermost. It’s essentially a more secure version of Slack. So the White House uses Matter Most. The joint strike fighters use Matter. Roses Department of Defense uses it, the J SFS use it to communicate back from Jet to Air Force Base. So we’re on the G S A schedule for purchasing and all that fun. And I’ve had to work with a few of you in my past.
Paul Barnhurst:
I’m sorry. I’m just kidding. No, it was a great experience, but I pretty quickly realized for me just the level of rules and regulations around buying stuff. I’m like, I just can’t see myself doing this my whole career. It’s just too rule driven. I want a little more flexibility,
But it was a Good experience.
Aneal Vallurupalli:
Lot. I guess what with airbase, you get that flexibility. You get to define the preset variables for the workflows that occur either based on persona type, spendin type amounts, et cetera. So it’s fully configurable in that way.
Paul Barnhurst:
Great. Now, and I’m familiar with procurement software. I actually spent some time when I worked for the Navy on the Joint Requirements board that they had across all the services to try to develop the next version of the software. That was an experience.
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Yeah, great stuff. So you’ve been the CFO of airbase now for a little over two years, right? Can you talk a little bit about the journey, just the experience and what it’s been like? You mentioned being at a company that’s serving what you’ve been doing your whole career, right? You’re serving your peers.
Aneal Vallurupalli:
Yeah. I think not dissimilar to many others who’ve stepped in as the first CFO of a company, there’s a level of, and there’s always a level of, but even in that case, there’s a hyper call it prioritization that we have to do. There’s generally three things wrong or three categories that can have issues. There’s people processing systems. And so when you step in as the first CFO of a company or any CFO, fundamentally, we have to understand the people we’re working with and who is going to work well in the vision that we have. One of the ways of putting it is my background is FP&A strategic finance investment banking. My background is not being a controller. My background is not being an auditor. My background is not being procurement. And so it’s important that in the areas where we have superpowers, we understand how we can de-risk the company and the areas where we do not have superpowers, we bring in very good people that we think are stage correct for the company.
And so that is what, that was not dissimilar to last three companies. I came into doing effectively a similar type of function in finance coming in, starting many of it from and rebuilding in some cases that’s what it was. And then ultimately prioritization. We know in this environment that budget is not infinite and the opposite. It’s often lacking or not there at all. And so that effectively means we have to prioritize accordingly and really pick the most strategic things that we can work on that make sense to move the needle for the company. So there was that for the realm of people. For systems we were fortunate to have not to be customer zero as we call it, of our own product airbase, but there’s a whole host of other things. Call it in the FP&A side that we need to build financial models, we need to build reporting necessary.
One of my first hires is also our director of data and analytics because my team also focuses and runs the company’s data model and the fundamental data warehouse for the business like Snowflake and call it the retooling required there. Another aspect that we went out and we concertedly aligned with my CO and myself on this was we need to build a strong and best in class risk and compliance function as we are moving billions of dollars of customer funds. And so we went out and got a strong VP of credit and risk that we could rely on to build the policies we needed and also the operational rigor and requirements to make sure that we are bringing on good actors and not bad actors onto the platform, our customers from potential payment fraud, et cetera. So as I mentioned, in every way, shape and form, being the CFO of a CFO’s company that is also moving money, not just an FP&Asoftware business that’s truly in the business of moving money as well. You take a different level of, call it a rigor to the role in other areas that we predominantly had not had to focus time on.
Paul Barnhurst:
Sure. No, I can imagine with moving money and any of that kind of stuff, you have a security level that you’re not going to have elsewhere. Like I said, I worked for the Navy, so you could imagine the security level there. Then I went to American Express
Aneal Vallurupalli:
And
Paul Barnhurst:
Extremely tight. So I can relate to that importance. And I still remember I went to a different company and I could download, install something on my computer and I’m like, what mean I can actually do this on my own? I’ve never experienced this because it was just such tight security. What
Aneal Vallurupalli:
About even basic level of decision-making processes? So when you come into a company, you take a sense and call it, you start to write down how does this company make decisions? Taking a look at those processes and approvals matrices, is it consistent or is just one-off decisions happening by the CEO in Slack or by the product leader or by the sales leader? So anything around money, movement and risk. We have committees internally here now that ultimately double check things and then we have an exec committee that ultimately signs off on recommendations from subcommittees. And putting in that governance is very, very important.
Paul Barnhurst:
Yeah, totally agree. Anytime you’re dealing with spend and moving a lot of dollars and things, there’s a higher level of governance. I mean, governance is always important, don’t get me wrong. But last thing you want to do is tell somebody you messed up their money.
Aneal Vallurupalli:
Nope. In the business of trust and that’s all we have to keep that level of trust extremely high.
Paul Barnhurst:
Yeah, no, that’s the American Express. And also I worked a cybersecurity company and that’s how they defined it. We’re in the business of trust. We can’t have somebody be hacked.
Aneal Vallurupalli:
Nope.
Paul Barnhurst:
So next question here at Airbase, you’re focused on unifying and automating diverse workflows, but there’s a concept you use around that that I’ve heard called spend enlightenment. So can you talk about what that is, how that term came about and what it means?
Aneal Vallurupalli:
Yeah, I think if I were to synthesize it, and we’ve tuned it a little bit on our website as well as in some of our materials, I think what it roots to is control your spend, control your destiny. If you can control your spend as a company, you can control your destiny. It’s achieving that state that is very important. There’s no other business for the mid-market out there that can maximize that spend under control like airbase can. There just isn’t. And we do that because we can have these features and products that are broad and deep as well as international money movement and feature capabilities. So for mid-market companies, call it anywhere from 200 to a few thousand employees. There’s no other product that can do that for you in a way that we can and as well as in a way that’s going to help you adopt it as fast as we can for a price that you find very affordable.
Paul Barnhurst:
Got it. Thank you for that answer. That’s really helpful. Next question here, can you talk about what it’s been like to manage a company that’s been experiencing hypergrowth over the last few years, especially this environment where all of a sudden we went from grow at any cost, who caress what the bottom line is just give me revenue to Oh, balance it, make sure you’re growing responsibly.
Aneal Vallurupalli:
Yeah, I think that that has definitely been something that a lot of, not just myself but my network of friends, VPs of finance, CFOs, finance leaders, heads of finance, whatever you want to call them, has been challenged with definitely over the last three years, four years even. I wouldn’t even say last year because covid and everything kind of put you on notice, call the downturn solidified all of those feelings you had the entire time. I will say that there is a level of, we have to understand where are we focused as a company and why are we going to win in those areas. So beyond obviously controlling your spend is very important. That’s one aspect of being a company that can consistently drive growth and value for the customers at a spend level that is palatable by us and the board that’s Ally. All the things we’re trying to balance.
We need to balance growth value we give to customers with a spend level that we can justify and showcase that we are being good stewards of company dollars. I think that in this environment there’s obviously alignment needed. So a lot of that has been alignment with myself, my CEO and the board. Thankfully at Airbase here, Thejo has been a second time founder sold his last company Automatic, a connected car platform that was acquired by SiriusXM for a hundred million plus. And the great news with that means that he’s had to balance this before he’s had to make those trade-offs before. And our number one value internally at Airbase has always been since I’ve started Control your own Destiny. So we’ve never been one of those companies that has felt like we’ve had to raise, had to raise how to raise because balance sheets dwindling, dwindling, dwindling if in fact we haven’t raised in two years and we still have multiple years of revenue or sorry, multiple years of cash. And so the benefit there is that it’s built into our DNA as a company. The biggest challenge has been for those companies where it’s not a part of the DNA and the CFO’s been in charge of stewarding and force aligning the company to care about these things. So as I mentioned, you do this by aligning with the C E O, aligning with the board and then putting in the process with sales, with people and systems and a process that can get you force aligned to those segments.
Paul Barnhurst:
Yeah, as I hear you, I feel like there’s a lot that you’ve said around one, you got to align what that’s going to be. How responsible are we going to be? I mean, we should all be responsible, but what is that appropriate level of spend? Yeah, because
Aneal Vallurupalli:
Be underspend, you don’t ever want to be the CFO that’s blamed for underspending and under investing in a time where it’s time to go get more market share.
Paul Barnhurst:
Yeah. I still remember a lesson I learned from a VP. We came into Q four and they were asked, make sure you’re putting everything forward. If you’re holding anything back, make sure we know. We’ve all seen that where you sandbag in a budget or a forecast, we all know what happens. And everybody had been doing it and the one guy brought everything forward at the end and a lot of the other leaders did. And I think they beat the plan by like 7% or something. I mean the forecast, not just plan, but the forecast for Q four. And he went to all of ’em and he goes, you do realize because we were a division within a bigger company, you do realize that we just lost out on an opportunity to invest in a bunch of things with that extra money. We’re not going to get it back for next year. It’s really important that you bring everything forward so we can optimize those investments if we’re over performing or we can adjust if we’re underperforming. And it was a good lesson for me, I was early in my career, is that VP was telling all the other leaders, you guys, you realized we really messed up here. You heard us
Aneal Vallurupalli:
As a company. That film that VP received was probably one in which the C-level executives and the CEO had set a boundary for and had set a focus on. So here at Airbase and at many companies you may be okay with beating or missing plan by single digit percent, but we are not okay with spending more than we plan to spend. We’ve got to be eating our own dog food. So it’s literally in my time here, we have never missed our cash forecast, but that’s the amount of focus we put on that. And so some companies will say, we have the balance sheet, don’t worry at all. Focus on revenue. And that’s the environment you were describing in the past.
Paul Barnhurst:
Yep. Yeah, exactly. So next question here, what do you look for as a CFO from your FP&A team? What are those key things you’re looking for kind of skills and tasks for them to have?
Aneal Vallurupalli:
Yeah, I think that number one, there’s basic skills required that are table stakes. Obviously you need to be able to cash, you need model, you need to be functionally communicative and understand the terms of why they matter. So it’s like bringing someone from CPG FP& A into SaaS FP&A. They may not even know the terms of what does an average enterprise software sales cycle look like? What are the stages within that sales cycle? What does an MQL mean, right? So being able to have a level of industry expertise and knowhow right is very important because the most important thing I believe from FP&A is you build a level of credibility across the company and across the organizations, across the decision makers. That is the most important thing because when you come into a FP&A team that is likely not functioning great or is not there and you’re starting it for the first time, there is what I call the push vs pull dynamic.
You’ll find yourself as the FP&A person or the new FP&Aa leader pushing yourself into conversations because it is the right thing for the company that is the right thing for the company. But over time, the right thing for the company is also for you to be pulled into those conversations over time. So that’s the give, get a value, you push yourself into conversations because it’s the right thing for the company, but you also need to be providing value to your constituents around the table for them to be better versions of themselves and the company ultimately to get to a better position. When that occurs, you will generally start to feel the pull being pulled into conversations. And so that is why I believe that even though FP&A is very numbers driven and modeling driven, it needs to also be left brain and right brain. It needs to be able to build relationships across the organization.
Paul Barnhurst:
A hundred percent agree. Those relationships are critical. And I really like something you said there about they need to be able to establish or build credibility. What’s the key to doing that? What have you found is that secret to building that credibility with the business? So they’re pulling you into the conversations versus you having to push your way into the conversation because we’ve all been there where you get left out as a finance professional.
Aneal Vallurupalli:
Totally. I think the consistent thing I’ve seen there is really understanding the pain points right now for those stakeholders. Every stakeholder at a company has a pain point. If they tell you they don’t, there’s something going on there. There’s a dynamic going on there that you also need to understand why do they feel like they don’t have a pain point? I have a pain point. Every single manager or IC at a company has a pain point. We have to identify it or them identify the pain points and we have to find out how can we and FP&A de-risk them or make them better or alleviate them or turn ’em into a strength. So when we talk about getting information that’s super important and then giving on something back to them that is usable and provides value back is how you build that bridge of collaboration from the FP&A perspective. Because otherwise there is no give get, right? The get is that you’re getting information and eventually if you keep getting and that ratio’s off, the person you’re spending a bunch of time with is going to be sick and tired of spending time with you, how are you helping me? You’re just doing this because you have to do it, but it doesn’t help me in any way.
Paul Barnhurst:
A hundred percent agree. If you’re not giving something back to them, it’s just a matter of time till they’re going to try to avoid you like the plague, right? Just stay out of my office. All you do is waste my time. You don’t give me any value.
Aneal Vallurupalli:
Here’s example, what if the product marketing team, whoever’s in charge of pricing is starting to look at a new pricing metric or starting to look at repricing a product or starting to look at a completely new way of pricing a product. So instead of going, they want to go from seat based to usage based.
The way you can provide value is by asking a lot of questions and understanding, oh, tell me more about the reason to drive this and are you having trouble thinking through some concepts that may showcase value here or is there some data that’s really hard to get at consistently? Let’s try and figure out what we can bring back that can help you with this. And eventually what you’re also doing there is you’re providing things back and you are also getting a perspective on how a core function of the company is thinking and you’re eventually figuring out how we then can, how them make their point emphatically with data and metrics or you can help them challenge their point behind the scenes so they don’t go too far down the road.
Paul Barnhurst:
I really like that. I appreciate that. So if I was to ask you from your perspective what FP&A professionals in general can do to be a better business partner, what would you say that most important thing that they do to make sure they’re a good business partner?
Aneal Vallurupalli:
Yeah, I think as I mentioned, we need to spend time across the company. It’s easier in FP&A, in my opinion, to spend time with the go-to-market function because we are ultimately numbers driven and so is go to market almost every sense. It is a little more difficult in many ways to spend time with product and engineering in a way that give get is equal and that is obvious in many ways where they are measuring you the highest to give get because engineers are very pragmatic that way. So I think that ultimately building the relationships with the leaders across the org is the most important thing you can do. The other things like spend time figuring out how to do a vlookup VLOOKUP and all that are all table stakes.
Paul Barnhurst:
A hundred percent agree. And I really like when you said the give get and engineers. So when I worked in procurement, I had a guy that I was good friends with, I knew him outside of work, we’d worked together with youth in different programs. We attended the same church, but I got stuck on some of his contracts and he hated procurement was just, I was always pulling teeth. He’s like, I only give you something I have to basically, I hate you in the work relationship.
Aneal Vallurupalli:
I’m sorry. That is most people’s perspective, which is why I always feel like people do the procurement function. I feel bad for him because thankless in so many ways and generally finance leaders are the most thankful for it.
Paul Barnhurst:
And so that was a lesson of learning where it’s like just give me the minimum and I’ll try to do everything I can for you. Just work with me a little bit. We’re friends outside of work, help me out here. I know you hate me in the work environment. So yes, that is procurement in general. It’s a thankless job and I really appreciate people that do it well and keep that passion when everybody’s like, wait, you want me to give you this and that? And they look at it as just,
Aneal Vallurupalli:
We now have a software tool that makes your procurement life a lot easier with airbase.
Paul Barnhurst:
No, that’s great. We definitely need better tools in that area, so that’s exciting. So next question here as CFO, do you have a favorite metric that you like to look at when you’re first analyzing a business?
Aneal Vallurupalli:
No.
Paul Barnhurst:
How about anything financially? Is there area financially you typically like to look at?
Aneal Vallurupalli:
The reason I say that emphatically is because the North star metric for every company is very different and it is oftentimes not a financial metric. I feel that if you are a CFO and you’re just looking at growth rates, you’re just looking at gross margins, you’re looking at cash burn and you’re looking at CAC, you’re looking at LTV to CAC, you’re looking at burn multiples. Those are all historical things, not actually indicative of what is the NPS of the customer? What is the active usage rate of the product? What is call it the most important thing that, what is the most important metric that you can encompass? A lot of the efforts around at the company that would suggest that this company is aligned, that vision makes sense underneath that. And so what I’ll say is that it’s different across everyone.
Paul Barnhurst:
Sure.
Aneal Vallurupalli:
And it’s generally not a financial metric.
Paul Barnhurst:
So I’m curious, what is that metric at airbase that helps keep you aligned that you like to look at? Is there one or two key metrics? Yeah,
Aneal Vallurupalli:
I think biggest point is percent of spend under management. So there’s no other company that can get you to as high of a level of spend under management or spend under control as airbase can.
Paul Barnhurst:
Next question, right? The last year, I think everybody at some point to ad nauseum has heard about generative AI, right? Chat G P T, how are worlds changing? Are our jobs all going away? So how do you see AI impacting the future of FinTech procurement solutions? How do you see that changing things?
Aneal Vallurupalli:
Funny, somebody asked me this question last week and they said, is AI going to replace jobs in finance? I think that’s the big thing. How many jobs are going to be replaced by this? And I gave the historical story from one of my founder managing directors at my investment bank from 14, 15 years ago, and he used to have funny sayings. He’d walk by on a Friday and be like, what’s amazing about a Friday? And you you’d be asking first your analysts and they’d be like, what? And he’d be like, it’s only two working days away from Monday. See you on Monday. Awesome, thanks. Super motivating. But the reason I brought up that MD was because he gave me a story of how back in the day in the seventies, there was no Excel, right? There was no way of tracking comps across public companies. So the analysts would end up having to go and run to the basement of these banks and manually pull public comps off these huge books, write things down on science paper, and then come back to their desk and manually analyze. So in reality, what did Excel do? It took away the number of hours or maybe even the number of analysts potentially you had to do, because if it was 0.2 FTEs or analysts required amount of time to focus on manually pulling that data, Excel eradicated that need.
Paul Barnhurst:
So
Aneal Vallurupalli:
Are there rudimentary functions that AI will displace? Yes,
Paul Barnhurst:
Agreed.
Aneal Vallurupalli:
I do not believe AI will displace logic and business and circumstantial related decision-making abilities.
And by the way, those rudimentary tasks, how fast does AI replace it? Does it happen in a week? Does it happen in 15-20 years? T B D, I think we’re already starting to see that. A lot of the chat TPE stuff is great, but we’re also starting to see the reports of folks getting wrong information from it where the model is being trained incorrectly, where it’s saying things that are just outlandish is not business tested, proven to make consistently repeatable good decisions. And until it is, I don’t see the majority of finance jobs being replaced. I do see it being leveraged in rudimentary tasks for sure, but I don’t see it replacing enough a near amount of jobs that may create in other areas
Paul Barnhurst:
Makes sense. And I could totally see that. And yes, we do have to overcome the accuracy, the bias. There’s a lot of things that still need to be figured out. There’s some privacy and data things. But going back to your one where you said the guy two days away from Monday reminded, I worked with the guy that every Friday he’d be super happy, head out the door early and he’d always drag in on Monday and he would say, Monday, Tyler hates Friday Tyler. And I always loved that. It was so funny. He was a unique dude, but he would drag him late every Monday morning and we always knew what was coming.
Aneal Vallurupalli:
Yeah, I mean it was, I think the investment banking for the FP&A people out there is a great foundation to have, but it was never something for me. But there’s always a quirkiness to the business you can appreciate in arrears.
Paul Barnhurst:
Yes, exactly. Not when you’re going through it. A lot of truth to that. We almost, there’s so many things that in the moment we’re like, am I really going through this? And a year later we look back and just laugh. Next question here. Can you tell me about a time in your career when you experienced what we’ll call a strategic moment? And I’ll give an example, ie a strategic insight that later empowered you to drive change within the organization that led to a positive outcome?
Aneal Vallurupalli:
Yeah, I think you asked a question before about modeling. Being able to model the first business model or company is the first layer of, call it a thousand layer deep onion. Every layer you cut back provides a different level of sophistication of visibility into something, right? And so the most important thing that I’ve found is that you continue to dig into these different metrics, these different areas that could potentially unleash an insight. I think that a few companies ago I was at a company that was a lot of everything to everybody and have not done a lot of work in segmentation, had not done a lot of work into ACVs, had not done a lot of work into industry segmentation and personas, meaning what kind of personas within those segments then were personas buyers of the product and the insights that we came up with from my team. We came up with from my team, were able to showcase an area of our existing customer base that had the highest retention rates, the fastest win rates in prospecting cycles and also had the highest net retention rates. And so that is technically then an area where we have strong product market fit.
Paul Barnhurst:
Sure.
Aneal Vallurupalli:
Very strong product market fit. So what we’re able to do with that is able to go to the leadership team than marketing, than sales, than CEO and everyone, line everyone and say, put more of our wood behind that area.
Paul Barnhurst:
Yep.
Aneal Vallurupalli:
Go there and obviously, hopefully there is a good enough market size for us to go after. And that was something that I think helped that business out a lot.
Paul Barnhurst:
Makes total sense how that would really drive a change when you’re able to find something that says we got the product market fit, if we put the dollars behind it, we can hit those growth numbers that the board’s given us or whatever it might be.
Aneal Vallurupalli:
The most challenging thing was the company was hitting its growth numbers, but it was hitting it very inefficiently. Meaning when you’re going after 10 person companies and also the government as an example, those are very different sales cycles, sales reps, enablement materials, marketing efforts, lead gen efforts, messaging, all of it’s very different. So it’s like then your vanilla, your blah to everything, which means you’re probably not doing all those things well and it’s very hard for startups, series A, B, C, D, EF to actually be good at being everything to everyone.
Paul Barnhurst:
A hundred percent agree. I think no matter what the size of the company, it’s hard to do that. But especially as a startup, a great book on that, it’s called Crossing the Chasm if you’ve ever read that by Jeffrey Moore, right? It gets to that exact idea. Figure out who that core customer is, scale up with that, get across that chasm and then start worrying about being everything to everybody.
Aneal Vallurupalli:
And I’ve also been a part of companies who found that at first and then you start being everything to everyone over time and then you’ve refined that again that ICP when you’re at a later stage. So it’s never done right. These things are organic, they’re always happening, which is why finance is not a replaceable function.
Paul Barnhurst:
I’m with you on that. I agree. So we’re moving toward the end of our time here and this next section is what we call the get to know you section. It’s kind of a rapid fire where you get 30 seconds to answer each question. So we’re looking kind of a quick answer. There’ll be four questions here and the first one is, what is something interesting about you? Something unique that not many people would know.
Aneal Vallurupalli:
I used to be top 20 in the US for tennis and number one in Texas for about seven, eight years and I played D1 Tennis in Santa Clara. As I mentioned, I was recruited to go to Santa Clara, so that’s probably something not many folks know.
Paul Barnhurst:
Great, thanks for sharing that. I had a boss that he was a big tennis player and his son was ranked nationally in Texas, so remember he always was talking about the tournaments his son was going to.
Aneal Vallurupalli:
Yeah, it was fun.
Paul Barnhurst:
So if you could meet one person in the world, dead or alive, who would you meet and why?
Aneal Vallurupalli:
We can keep it fun. There’s different categories.
Paul Barnhurst:
There is for sure fun
Aneal Vallurupalli:
Would probably Roger Federer in my opinion, in my mind, the greatest ever to do it and to be that great for that amount in that period of time is something that goes beyond just ability. It goes to, there’s a process behind it, there’s a mentality behind it, there’s a mental strength behind it and I think anybody could learn from that regardless of whether you appreciate tennis or not.
Paul Barnhurst:
I agree. Any of the greats. There’s a mindset there that I love to understand, whether it’s Michael Jordan in basketball, Tom Brady in football, whatever your sport might be in person, there’s usually some very unique characteristics that drive that. Yep. Alright, so this is kind of a fun one we like to ask, what is the last thing you used Google YouTube or your generative AI tool of choice? I’ll say it that way, to research something about finance, Excel or FP&A?
Aneal Vallurupalli:
I Googled the FP&A Guy. It’s really funny you mentioned that. I have a podcast that Airbase asked me to host and I titled it and called it what I wish I knew intentionally because there was a whole bunch of stuff 13, 14, 15 years ago when I started in finance and investment banking that I could not Google, it just didn’t exist on the internet and stuff Today that is there within the first three words of a keyword search. And so give me a leverage buyout model that’s available in a second. What’s the calculation for ROAS return on advertising spend available in a second. These things didn’t exist. This is this younger generation that doesn’t know this doesn’t exist 15 years ago on the internet and we had to go figure it out. So the internet is a wonderful tool and one that I have folks leverage constantly. So I would say the internet and oftentimes YouTube and many other things.
Paul Barnhurst:
Yeah, no, it’s amazing what’s out there now I do a lot of training and sometimes I’m aksked to trainer on something that I may not be really familiar with within the training and I can go to chat G P T and Google and find a dozen articles and different things to read and triangulate to really bring myself up to speed so I don’t feel like I’m training on something that I have no idea what I’m talking about. I hate that feeling.
Aneal Vallurupalli:
Totally. In investment banking. No, not to any investment bankers that listen to this. You end up having to, you end up having to know a little about a lot of things and when you have to know a little about a lot, Google is your best friend.
Paul Barnhurst:
I agree. So last one of the questions here, this is one we like to ask because our sponsor Datarails is a big fan of Excel, an Excel-based tool. What’s your favorite thing about Excel? Favorite function or feature?
Aneal Vallurupalli:
So this may not be something you’ve heard of before, which we’re going to test that. So I’m a big fan of a tool called Macabacus, which is a tool that is a plugin to Excel.
The reason I’m a big fan of that is because in my original days investment banking, my first two months they gave you a computer with no mouse. And so that meant that you had to be able to run your entire work life for two months without being able to use a mouse. Which means you get very fast with all of the shortcuts on how to get from window to window and all the requirements within Excel and Macabacus is something there that’s home that you can create all those control shift, open-end, right Alt, E S u, alt, J D A L, all those random things that you can throw out there. Shortcuts that make your daily life way more productive.
Paul Barnhurst:
I love that. That’s definitely something I haven’t learned. I still occasionally use a mouse and the other day I was with somebody who’s like, you used a mouse like what’s wrong with you? Sorry. I do. And I had a boss who worked investment banking and he said he got so trained of those different patterns that he’d be sitting in meetings and he’d be tapping them on the table with his finger just out of habit,
Aneal Vallurupalli:
Just super fast. You know what? I said this the other day, I think to my CEO or to maybe my finance leader, I told him I wish there was the Excel championships that were on e s ESPN 15 years ago. I feel like aspirational, I could have had a runup,
Paul Barnhurst:
You still can. I’m actually going to go to the world championship and interview all the finalists. I definitely couldn’t compete with them. I did one event once recently and they asked me to do it live, so they made me one of the four people because I had mentioned I was going to do a podcast around like, oh we’ll have ’em stream this, give us some visibility. And I got annihilated. It was not pretty. It’s out there on YouTube and if anyone wants to watch how to flame out in half an hour trying to figure out a model, just go watch me do it.
Aneal Vallurupalli:
That’s so cool. I’ll check it out.
Paul Barnhurst:
Yeah, it was fun. Financial modeling World Cup. It was the recent one here about a month ago. So real quick, last two questions wrap up here. I know we’re running out of time. If you were to offer advice one or two pieces of device to someone starting a career in fp and a today, what would that advice be?
Aneal Vallurupalli:
Have a hunger for knowledge,
Paul Barnhurst:
Love that.
Aneal Vallurupalli:
Keep a growth mindset.
Paul Barnhurst:
It’s a great one. I love great book. If you haven’t read it, Carol Dweck, I highly recommend it. And last question, if someone wants to get ahold of you, wants to talk to you, they heard something here, what’s the best way for them to reach out to you?
Aneal Vallurupalli:
Connect with me on LinkedIn and I’m relatively active there so shoot me a message on LinkedIn and a request. Always happy to chat.
Paul Barnhurst:
Alright, great. You’ll see a request coming from me. I don’t think we’re connected now. We might be, but if not you’ll see a request For sure. And thanks for your time. I really enjoyed chatting with you and I know our audience will enjoy the message you shared. So thank you.
Aneal Vallurupalli:
Awesome. Nice meeting you.