00:15:45 · CJ Gustafson
Ad[00:15:45] S1: yet, most finance leaders couldn't tell you how it's priced. And as a CFO, I understand there's a nonlinear impact to your company's valuation when you improve your gross margin, and the path of least resistance is through your AWS or GCP bill. Because like anything you buy, cloud gets cheaper when you buy in bulk. In fact, you can get the rate down by 20%, 30%, even 60% in some cases. The flip side is getting saddled with a bunch of capacity you never touch. Happened to me once, I think I still got some megawatts in the kitchen cupboard somewhere. That's exactly what Cloud Capital solves. Cloud Capital underwrites the risks so you can realize the same savings of a deep long term commitment, sends the downside. Oh, and it takes no engineering work. Bingo. I've known Edward since back when he's just starting the biz and it's incredible how much they've saved customers on their cloud bills. That could be you too. So head over to cloudcapital.co. That's cloudcapital.co and find out how much you could save. When somebody asks, how is business? What they're really asking is, how are your finances? Because every single decision a company makes is inherently a financial one. I've said it a thousand times. Finance isn't just keeping a tally of what went down. You are not the person piecing together what happened the morning after in the hangover. You're the person deciding whether bringing Mike Tyson's tiger back to the hotel is a good capital allocation decision, which means your team can't afford to be living in the past, policing a $30 software charge or slogging through a close that drags on for weeks. Remember, there's a tiger in the living room. That's why you need Brex. Brex built an intelligent finance platform that combines global corporate cards, expense management, banking, bill pay, and travel into one system with real time controls. AI handles the grunt work, enforcing spend policy at the point of sale and reconciling continuously so your best people can chase growth instead of chasing paper receipts. Defense handled. Terry Tate office linebacker style. So go play offense. Throw the ball deep. Thousands of top companies, including Anthropic, DoorDash, and Coinbase already run on Brex. Join them and take back your team's momentum at brex.com/metrics. That's brex.com/metrics or just tell them CJ saying. Still in budget season?
00:18:01 · CJ Gustafson
AdMy condolences. If you're only on v 40 of the plan, you're doing better than I ever did. Keep it up. Here's what I'd want in the trenches right now. Something I can hand a question to that already knows the context of my business. Not a chatbot that's never seen my p and l and not a bunch of AI features that are hiding in five side panels that I really don't know what to click. That's what Abacum just launched. It's called Abra, like abracadabra. I hope they let me keep that in. And it's one agent for your whole finance team. Ask it something like, what happens to runway if we push ad spend 25%? Or what changes has my marketing leader requested to their twenty twenty seven budget? Abra pulls together your actuals, your models, and your business context, calls in the right agent to model, analyze, or draft the board pack, and comes back with the answer, plus the trade offs in the next move. That's incredible. And for the control freaks, which is all of us, if we're being honest and you listen to my podcast, it shows its work. Abacum's engine does the math, not the AI. Abracadabra only sees what you're allowed to see, and nothing saves until you approve it. Here's the best part. It's included in Abacum as is. There's no extra charge, no add on. And I have known Abacum's founder and CEO, Julio Martinez, for more than three years. He and his cofounder, Jorge, came out of finance, and this thing shows their work. Most AI makes one person faster. Abra makes your whole team AI native. I could read you a short code to go type in, but honestly, just tell Jorge and Julio CJ sent you. They'll hook you up. Forgive me because I'm gonna sound like a caveman the way I ask this question, but do you look at it ever as it cost us this much to learn this thing?
00:19:43 · Kevin Hettrich, CJ Gustafson
[00:19:43] S0: That is a good way to view how we think about our annual operating plan and strategic long range plan. We have kind of a cadence where every December we set an annual operating plan, and every July we send like a five plus year strategic long range plan. And we think about all the things that we could do. If it's development, it's like, need... I think I need x dollars to solve y problem. And we kinda rack and stack them with the framework from the strategy that we had kind of agreed upon, and then we decide where to draw the line. But that... That's exactly a fair way of of thinking about it. What's what's the likely amount of capital for me to solve this problem so I can get that particular feature or this particular improvement in the method of making to acquire this customer, etcetera. [00:20:31] S1: Do you think that your job as a finance function is partially just forcing the company to put numbers behind its beliefs?
00:20:31 · CJ Gustafson, Kevin Hettrich
[00:20:31] S1: Do you think that your job as a finance function is partially just forcing the company to put numbers behind its beliefs? [00:20:38] S0: Yeah. That's certainly a core part of the job is do I have the right plan? And then maybe the the sister job to that is do I have the controls that that plan is being executed? A beautiful thing about numbers is that they are precise. Like it's not a yes or a no, or maybe it is a number, and that a number in the context of a corporate plan done well has to be self consistent. And what I find is when you're in a budgeting conversation with an individual function, like say you're talking about with engineering, absolutely do I want the full list of things with every single improvement and product feature, and I kinda look at the numbers, and I'm not the right one to say, hey, that individual project doesn't make sense. It's only when you put together the whole picture. It's like, okay, now let's look at all the expenditures as a company, sum them up. Once I put and facilitate there's a lot of hardworking, bright people. It's really a communal effort. Once we put this all together, that's where it gets powerful. Then we're like, Okay, now I can come back at, is that the right amount of capital to spend? And if we agree that it's something other, it forces you into a prioritization. [00:21:42] S1: On that point though, where do you insist on forecasting something tightly, and where do you just accept that uncertainty is just too high to pretend you know the answer?
00:21:42 · CJ Gustafson, Kevin Hettrich
[00:21:42] S1: On that point though, where do you insist on forecasting something tightly, and where do you just accept that uncertainty is just too high to pretend you know the answer? [00:21:52] S0: I love controlling things. I am definitely kinda little little type a like that. So I just... I I do also try to have an appreciation that the things we can control and the things we have high confidence in would have a tighter range. Things like expenditures, if we have, like, a robust pipeline right now, we we forecast customer cash inflows across our different verticals. Things that we put more loosely in ranges are things that we don't control, or ones where we know that there's a few discrete scenarios could happen. Like, do you win this new customer development agreement? And if so, the packet... This falling package of things will happen. Like, we'll take on this development work. We get these inflows. We need these resources to kinda do that. So we we use a combination of both of those, and then we also try to flex, like, being more conservative and being being more optimistic. We try to flex down to being more conservative in terms of things like capital planning and setting expectations with the public, and then we try to flex it up to be more optimistic and aggressive when we do internal goal setting. So all these different views we think have uses. [00:22:56] S1: What are the top metrics you care about in in a business like yours?
00:22:56 · CJ Gustafson, Kevin Hettrich
[00:22:56] S1: What are the top metrics you care about in in a business like yours? [00:23:00] S0: Long term, it's return of capital to shareholders, top line and margins and capital efficiency. In our current stage, where we're in the early part of the commercialization window, kinda collecting kinda cash flows from leading customers to do custom development, to do samples, to do prototyping. Some of the operational metrics are just as important. On the product development side, are we hitting kind of gates on time? Can I quantify just how compelling the product is and, like, a a customer willing to pay? Willingness to pay? On the operations side, again, are we kinda bringing up our pilot line as anticipated, and are we tracking to the learning curve that we think is there? Like, as we make improvements and kinda bring up volume and run through more parts, am I kinda hitting that shape? The balance sheet and kinda capital allocation, we like a big strong balance sheet. It's your friend when the world is bad, and you've got a kinda staying power when the rest of the market is taking a step back. It's your friend when times are good, and you can do kind of growth leaning type things. Am I spending the right amount of money, or am kinda priorities kinda right, or also really important?