E01: Rebecca Morrison, VP of Finance @ Lola.com

E01: Rebecca Morrison, VP of Finance @ Lola.com
Contents

Our Guest

Rebecca Morrison is the VP of Finance & Operations at Lola.com. Rebecca has a wealth of knowledge from FP&A to operations, at companies ranging from <$1 - $100M ARR.

Rebecca started her career at EMC working in credit and collections. After 4 years, Rebecca moved into an FP&A role at the recently acquired RSA, and dove further into an operations role. After spending a few years in Singapore, Rebecca joined HubSpot, spending with 2 years in FP&A, and another 3 years running global sales operations & planning at the rapidly scaling company. 


Hot Takes

  • Your CFO's core skills are underused.  A CFO can build out your G&A, data, and operations teams in a pinch.
  • Finance is a customer of every product. Your CFO can be the model persona for your product team as they build an Alpha.
  • You can choose to build an over-performing sales organization, at the same cost as an under-performing one.

The Podcast

Transcript

Sagar: So I’ve known you for a while, but the thing that I find interesting is your career background and I’d love for you to talk more about it.  I think you started off at some pretty big global companies, the biggest one being RSA for about five years in the finance department.  Then you moved over to operations at Hubspot and then back to finance at small companies.  I’d love to hear about why you did that and what you think you’ve learned through that whole process.  

Rebecca: Sure, happy to.  I started my career at EMC, actually worked there for about four years.  Started in credit and collections [inaudible] dollar for dollar you learn a lot, and then I actually moved over to RSA.  They had recently acquired RSA while I was there, and so I was in more of a FP&A role there.  I started to kind of delve into operations, that's when I realized I liked that more than just, you know, the month close number crunching process.  Like I actually like being part of the business, and so I think I really picked that up when I moved over to Asia and supported the Asia Pacific team.  That’s when I really owned both finance and operations and I really, really enjoyed that piece.  I moved back to the U.S. and shortly thereafter moved to Hubspot.  I went to Hubspot because a former colleague from RSA recruited me over and that’s when I kind of got the taste of working for a much smaller company.  At the time, Hubspot was only about 600 ish employees and I remember having a conversation with my boss before I even joined which was “I’m out of finance at this point, I don’t really want to go back into finance.  I’m on the operations side, I really like it.” and he was like “Ah, just come check it out”.  And so, when I moved over to Hubspot I actually joined in an FP&A capacity, I was there for two and a half years but we always knew my plan was to get over to the operations side.  After about two and a half years I moved over to sales ops and strategy and that’s where I was for another two- two plus years.  That’s when I really learned.  I’d always been a business partner but it was really in that sales op strategy role where I was actually running the business which was really interesting.  

Sagar: How did that play out exactly?  What was the difference? At Hubspot you worked with the sales team both from a finance capacity and then literally in the sales operations team.

Rebecca: Yeah, it’s different because when you’re in finance you’re really only working with the VP, you’re working with the head of the function.  You’re not really like in the weeds and you’re more just kind of like [inaudible] your expenses and like let's talk about that.  We talked about productivity per rep and stuff, I was tackling things more from a financial perspective.  Like how do we get increases and things like that.  On the operations side I was more involved with pulling the different levers to drive the PPR rate, like where do we add heads so that we can further accelerate the business, things like that.  Those are things that you didn't really get to do on the finance side.  You do it much more in higher levels, whereas, on the sales op side you really get to dig into the weeds and look at the segment of the business you want to grow, where do you think theirs the best opportunity, all that kind of stuff.  

Sagar: Interesting.  So in the finance world you really don’t have visibility to all those details.  The VP of sales may know that they can increase the headcount in the small business team by x percent and hit their overall goal.  All the finance team knows is that the overall goal, like “great, you have a plan”.

Rebecca: Correct, and I don’t really even know if the finance team cares that much right.   They know that they want growth to be 30% every year and that’s what we’re expecting to hit. They don’t necessarily care how you get there.  

Sagar: Interesting, interesting.  I guess that translated really well working at smaller companies because then, I’m guessing, the finance team is usually like one person.  It's way more plugged into the business, or has to be..right?

Rebecca: For sure, basically, the transition from Hubspot to much smaller was...Hubspot just kind of got too big for me and I didn’t really feel like I was making a difference.  I think when I left there were about 2000 employees and I ultimately joined a company that was about 50 people when I started.  And now I’ve settled into that 50-100 employee sweet spot.  I really like it because I feel like I’m having an impact.  You’re super involved in the business so that gap that we talked about in finance and business doesn’t really exist anymore because you see it, you’re involved with it, you see the details of the operation, and so you can have it translate on the finance side. 

Sagar: Interesting.  So I think there’s a bit of a split in what kind of CFO’s companies hire, even start ups.  Some people hire people with accounting backgrounds and then other people hire people with more of an operational background like yours.  Why would you go the other route?  Why would you bring in someone with an accounting background?

Rebecca: It depends, everyone is unique, if I look at my husband he is an accountant and he’s been able to make that transition to become more a FP&A on the operations side.  He understands the business.  There are people out there that have the more technical accounting skills and can easily translate over into that fluffy finance world where things don't have to always tick and tie, where you can think a little bit more forward thinking.  And then there’s some that just don't, and those are the people that are going to sit in that controller realm.  

Sagar: Gotcha.  Let’s talk about what finance looks like at Lola.  What is the finance team responsible for?

Rebecca: The standard finance stuff.  We’re responsible for closing the books and making sure the numbers are accurate, budgets, forecasts, and any sort of board reporting.  We own company-wide reporting, metrics, and we handle the audit, all that stuff.  We’re heavily involved in setting the plans right so we don’t really have an operations silo department.  We act as sales ops, we set the plan, we're looking at the lead flow, and the opportunity, whereas, I feel I guess that’s one distinction.  In prior roles, in finance you set the plan with more of a top down approach.  You look at what you do, what you want, and what your year growth should be.  What are the key metrics you want and you set a plan based on that, whereas the operations team tends to do all the details and bottoms up planning to make sure you can actually get there.  Because our team is small and lean we own that whole unit.  

Sagar: I know at Midaxo you also owned stuff outside of finance and analytics.  You also owned all of G&A.  Do you think that’s the future for CFO’s or is that something that is going to go away?

Rebecca: You know, I think it all comes down to the size of the company.  Typically the nature of the skill set of finance professionals tend to be rule followers, they have to be structured, they have to think operationally.  That suits some well, like standard back office type of functions such as HR.  There's a ton of HR policies that you have to follow, that could naturally fit into finance.  And you know legal has tons of structure, policies, that kind of stuff.   I think the skill set matches.  You tend to give the responsibility to someone in finance, say in sales.  The one exception I would say is maybe like recruiting and culture.  Those are specific aspects of HR, usually when you’re at a really small company you’re only having one person own all that stuff so it kind of naturally can fit.  But as you get bigger you definitely need to start specializing because as we learned real quick, the finance person doesn’t know a ton about HR.  

Sagar: [laughs] There’s more of an intersection of limited resources and skill set.  Like the person you hire as CFO thinks the way that you want them to for G&A.

Rebecca: Yeah, pretty much, exactly.

Sagar: Ok, that makes sense.  Let's talk about what’s been going on with Lola and how things have changed for you in finance in more detail.  What’s on your mind right now, where we are standing today, and what’s going to go on over the next three months.  What are your priorities, what are you thinking about?

Rebecca: Yeah so obviously we’re in the middle of a pandemic and that hasn’t bode well for a travel start up, so for us we’re really focused on the next big thing which is spend management.  So for me in terms of my priorities it’s two fold because I feel like I’m acting as a potential customer.  I've got my customer hat and then I got the VP of Finance at a spend management company, if we talk about my customer hat I really just want to make sure the team is building the best product that will effectively meet my needs.  I've been partnering really closely with the product and design team on the roadmap and they’re developing the features and functionality that we need to be successful in the market.  That’s a huge priority for me, making sure that I can scale up the company or that I can share my knowledge with the company as much as possible because frankly I’m the only one here who understands the finance persona.  There are very few people at the company that truly, truly understand the finance persona in at least the day to day.  And then from me, the VP of Finance at a spend management company, or even just a VP of Finance at a company in these times I want to make sure we’re starting to think through pricing and packaging of this new offering.  What could financial plans look like for next year?  How do we factor in the impact of COVID on travel?  We still have a travel product so how do we think about spend and how that fits in with travel and then how we package.  There’s just a lot of financial stuff and I don’t even know how we fit for next year at this point but I got to wrap my head around that in the next couple of months.

Sagar: The idea of finance being really heavily involved in the design of a product is super interesting and unique I think.  There are going to be a lot of companies popping up and in a lot of them their CFO is going to be the product expert.  So what have you learned in interacting with the product team, how’s that gone, what’s your process?

Rebecca: First of all it’s been awesome, working at a travel startup during a global pandemic which has ceased travel makes my job not so fun at this point, business has obviously slowed but to be able to have something else to focus on has been pretty awesome.  Really enjoyed that [inaudible].  I think that the weirdest thing I’d say in finance is that you’re just the back office and a lot of times that’s exactly how you're looked upon and you don’t necessarily have to.  You’re kind of just considered the wet blanket.  It’s not the most glamorous role and so to actually be able to work with the product team and have them generally interested in every single thing you’re saying….I’ve learned a ton.  I have no idea how you go into product and how you build.  I think some things that have been super interesting to me is when we talk about all the features and functionality that’s required, then watching the team work on what I’m saying and figuring out how and what feature they’re going to roll out.  Alpha vs. a beta vs. how they can determine what’s needed and for when.  That’s been an interesting process.  Sitting in UX or design meetings where people are arguing over what icon to use it’s just something you don’t think about.  You don’t think about whether there could be an argument about whether we’re going to use a circular thing.  The number of conversations I’ve had about icons has been a lot.  So it’s just been interesting.  

Sagar:  What are your rules?  I feel like design decisions you make in finance, or what colors sell or do I hide like.

Rebecca: Yeah, totally, and also too I think the thing I’ve been trying to articulate is like “hey you guys are building this for some finance person and we're used to living in Excel”.  You don’t need to make it super bells and whistles.  Don’t think about this like, we want to build a better Excel, don’t get me wrong we need a better Excel, but it’s been an interesting thing to be like “well yeah finance people are gonna kind of think about it this way..they’re not going to really care”.  I just had a conversation about notifications or tasks and they showed me two different designs.  The tasks need to be in a very clear succinct list view, it must look like that.  It can’t be in these big bubbles and it needs to be tight and look like a checklist.  So all that stuff is just so different to me, it makes the days interesting for sure.

Sagar: Let's talk though the details of pricing.  How do you start to think about pricing for a new product?

Rebecca: So actually in this case we did not focus on pricing, we’re really focused on packaging right now.  We're most focused on what we're going to offer, how we are going to gate it, and if we are going to gate it.  We have to nail that first before we put a number to anything.  And I mean yes we want to be profitable, you think about your unit economics and that you are profitable per unit, but there's an element at the beginning that kind of doesn't matter.   You just want to gain traction, you just want to gain customers.  And so you’re a little bit taken a stab at what you think a good price could be but you’re probably undershooting.  I would recommend undershooting at first at least.  I don't know, it feels a little like a finger in the ear type of thing.  

Sagar: Super interesting to hear about what finance has to say about pricing. I think it makes sense, you can’t sell a product for any price if you people aren’t willing to buy it and the key to that is the packaging side of it.  So maybe let's talk about that, how are you approaching that?  What are some of the variables that are going through your head?

Rebecca: There’s a competitive landscape out there right and so there's two differences.  We’re obviously looking at how the competitors are priced and packaged.  There’s definitely a need for there to be a free offering and so thinking about what would be the feature and functionality that we would put into our free offering, and what we would want customers to have to pay for.  We really started to think about it from that perspective and so I’ve been leading the charge and working closely with Tony in product, Ryan in sales, and Mike the CEO.  I’ve been working really closely with them on the approach to doing that, I’d say we’re pretty close to getting it locked down.  But what’s really interesting, again this is new, is that Tony the head of product hasn’t signed off on that.  He has to put that into the roadmap for the team to actually develop. Say you have a product that you're going to gate a bunch of stuff, or you're going to have it so that maybe everyone gets access to the whole thing but their usage is capped.  If they want to unlock more usage they could maybe click a button that says upgrade or talk to sales.  All that stuff has to be designed by the engineers for the product to turn on or off and I had never thought of that before.  I was like “oh, I could just do this thing by myself and then I could tell people what it should be and we can roll it out” and it’s like “no no no, the engineers have to build this thing”.

Sagar: It’s a good thing you have that operations background then, I can’t imagine someone that’s never had to work in the details like that.  It’s so hard to be a business partner unless you’ve had some experience doing it.

Rebecca: Yeah for sure.  That’s been a little eye opening this time.  It thought I would just put a number to things and it would be done, but nope.  

Sagar: That’s a really interesting [inaudible].  In order to be profitable you need to have the right prices, but before you have the right prices you need to have the right packaging so people will buy in.  In order to have the right packaging you need to coordinate with almost every aspect of the business especially if you have a product lend premium muzzle.  So you need to have a very deep understanding of everything.  

Rebecca: Yeah it’s been way more of an involved project than I thought it would be but it’s been interesting nonetheless. 

Sagar: Awesome, now I can see why you barely have time for budgets.  Kind of curious how you're thinking about annual planning at a small company in the middle of, and coming off, a pandemic while trying to launch a new product.  

Rebecca: Q4 is focused on getting beta customers up and running and hopefully getting a sense of what a good fit customer really looks like.  Someone we really want to model the financials off of.  We’ll come up with a loose revenue plan for next year but I’m also really focused on making sure we don't go off the rails with spending.  Do I think we’re going to come up with this super comprehensive plan for next year?  No, we’ll probably make a six month revenue. 

Sagar: If I were to try to summarize, if you were a company that is early stage or trying to pivot your number one priority is trying to figure out who that ideal customer is and trying to get data.

Rebecca: 100%

Sagar: [inaudible] the product and actually spend, then you can start building a real revenue model but even then the revenue is just guidance.  More important is probably managing your existing cash and making sure you have enough runway.  The revenue is sort of like a forecast.

Rebecca: For sure. If we weren’t doing any of this, and we were still just travel at Lola, how we would be thinking about next year would be really really focused on controlling burn and assuming yet another slow 12 months of travel.  I would probably be modeling some uptick later in the half but definitely not the extent of where we were.  I feel like in another line of business you could build an annual plan for next year no problem, it’s just with a pivot it’s kind of hard. 

Sagar: It’s really interesting because it’s so different than what I remember experiencing at Hubspot.

Rebecca: Because they had such a regimented planning process, I mean God do you remember that?  I had the calendar.

Sagar: Yeah, maybe I was really stressed out and I don’t remember all the details but I remember finance came down with a revenue number.

Rebecca: Tablets of revenue.

Sagar: And then Hunter played a little bit of a game, he tried to lower expectations and it kind of went back and forth like that.  So right now what you’re in charge of is both the top down and the bottom up.  Can you talk us through how that’s different than at a bigger company where you  don’t have control of both sides of it?  When you were in sales ops and you got the top number from finance what did you focus on?

Rebecca: I was focused on whether it was realistic or not.  I was focused on building the resource plan to get us there.  Then there were other people that were focused on whether we have enough lead flow and what the demand equation needs to look like to get us there.  We were so big at that point that you had people focus on all these different things, at a smaller company you own the whole thing.  And even if I think about what we did last year we were focused on the demand side and then we were thinking about resourcing last.  Whereas I feel like at Hubspot we couldn’t wait for the demand equation to be done.  We were like “here is a revenue that finance gave us and in order to hit this revenue this is how many heads we needed”.  It was almost a negotiation between marketing and sales about “well if this is how many heads we have, this is how many leads we need” and then marketing was like “well I can’t deliver that many leads”.  It was like negotiation all throughout the organization.

Sagar: I remember marketing said at one point, “well if I’m going to hit this many more leads, I need this much more budget”.

Rebecca: You know that conversation was definitely happening with someone else, for sure.  I think it’s different, there’s less people involved.  In theory it should be more efficient because there’s less people involved.  Hopefully it should be more efficient.

Sagar:  When you get a top down revenue goal from finance what are the levers that you can pull on the sales side.  How does that model work?

Rebecca: In terms of what sales can actually control, it’s productivity, PPR which stands for productivity per rep, and you can control headcount in a way that is somewhat dictated by finance because they will tell you whether you have too many heads or not and whether that fits into your expense budget.  Thinking just in terms of revenue, if they handed us a plan we would sit there and what we would do is basically build a bottoms up capacity model if you will.  We would literally list out every single rep and and list out what we think their productivity would be, or what we think the productivity was on average.  You basically play out what you think the revenue was, add net new heads, and factor in attrition because obviously attrition impacts overall productivity.  Then hopefully you can settle on a number and once you do that , we  build a more detailed plan where we listed out every single person. Then you have to figure out what the quota is because productivity doesn’t always translate into quota.  You have to do the quota modeling and the quota roll up, which I know you’re intimately acquainted with.  We would do this quota roll up model where you would list out every single person and what their assigned quota was.  You would put in the net news, put in the churns, we even had to layer in vacation quota relief because we had this wonky thing at Hubspot and you’d want to have enough quota coverage so that you could hit the financial target.  You never wanted to be under allocated because that means the team would have to overachieve to hit the financial target.  

Sagar:  That was a bit of a comical decision right, Hubspot had a culture of over achievement and so they actively decided to have quotas and roll up lower than the revenue target.

Rebecca:  They did.  I thought it was an interesting play and I thought it was pretty successful to be honest with you because they built that culture of overachievement.  I think the team was driven for success.  There’s something to be said about people rallying around 110% attainment vs. setting a plan where people only hit 70, that’s kind of demotivating.  This could be a whole nother conversation.  

Sagar: Let’s go for it, I think this is a super interesting intersection between numbers, finance, very technical stuff like that, and culture.  Finance can set a goal but the way that you set individual goals dictates the culture of the sales team.

Rebecca: For sure.

Sagar: Like at Hubspot we had a clear culture of overachievement but at Midaxo we had the opposite.  Most traditional companies do this where [inaudible] is significantly higher than the revenue and management thinks of it as a buffer to protect themselves and the company.  

Rebecca:  Yeap, and the interesting thing was Hubspot’s play of “hey we’re going to pay you slightly below market but you’re also going to absolutely crush it when you hit 110% of your number on average, so your base is going to be a little bit lower to market”.  You can get a job at Oracle and your OTE be quoted at 300K but you’re only going to be expected to hit 60% of your number so you actually never really get to that OTE.  I remember having those conversations too when I was working closely with the recruiting team, that was a whole other thing.  I think there's a healthy balance, like what is that percentage of achievement?  You always want to make sure you’re not completely over paying for performance.  Hubspot was willing to overpay a bit for the standard performance but there’s definitely a balance.  I remember more on the finance side we would look to see what average achievement was, we would look to see what average attainment was, what percentage of reps were hitting, we’d always be paying attention to that kind of stuff.   How many people were getting accelerators and who were the accelerators on average?  Even though finance wasn’t responsible for the setting quotes they definitely had a seat at the table for ultimate sign off on the quotas because they wanted to make sure that we weren’t just going to be printing money for the sales team.  

Sagar:  Right, the compensation would still have to be in line.  So it turns much more into a psychological thing.  You can structure sales compensation in a way where you end up spending on a sales rep OTE if they are overachieving and you could structure it differently if they’re at 60% quota and still pay them the same amount.  

Rebecca:  For sure.

Sagar:  In which direction do you lean?

Rebecca: I’m definitely overachievement.  

Sagar: You’re always an overachiever?

Rebecca: I think so because I think there’s a balance but there’s just this feeling of winning that permeates the organization.  Think about the daily waterfalls we would send out, everyone would be jazzed about those.  Think about the waterfalls we sent out at Midaxo when, God I remember that was even quarterly, we were two months out of the quarter there would be nothing and you’re just like “that’s pretty demoralizing”.  

Sagar:  Yeah, I think I’m on the same page as you.

Lola.com is the spend management solution that keeps you on budget.


About the Author: Sagar Velagala
Sagar is the Director of Growth at Lola.com. Before this, he worked in analytics, finance, and operations roles at companies like The Boston Beer Company and HubSpot.