According to reports, 90% of startups fail. That’s a staggering figure. Unsurprisingly, it has a profoundly negative impact on the economy. As CFO, you’re intimately familiar with the financial realities your organization faces, and uniquely positioned within the C-suite to ensure your company – whether a startup or established corporation – succeeds.
Over the course of this column, I’ve connected with several CFOs working in startup environments, including CallFire CFO Tridivesh Kidambi in Why A Startup CFO Is Like A Personal Trainer and Code42CFO Jason Bristow in Making The Leap From Established Corporation To Growing Company. For a new perspective into the role and responsibilities of a startup CFO, I spoke with Mike Asher, who joinedHackerRank as CFO last month.
This interview has been edited and condensed.
Jeff Thomson: You joined HackerRank as its first CFO in February. After working as CFO at a number of other companies, how has your experience as an inaugural CFO differed from your past roles?
Mike Asher: I’ve been a CFO of technology companies, ranging from small startups to established market leaders, for over 15 years. As an inaugural CFO, there are often pieces of the process and strategy that are missing, but the good news is there is usually less to re-do, as the company hasn’t had enough time to develop truly bad habits.
Thomson: Are the skills required of startup CFOs different from the skills expected in more established organizations? If so, how should CFOs acquire these skills?
Asher: A startup CFO needs to wear many hats and be creative (creative solutions to problems, not creative with the accounting). While there are similarities across companies, including markets and products, each startup has a unique footprint.
A big part of my job is to develop a deep understanding of these challenges, and figure out where to prioritize and invest versus areas that are nice-to-have, but not critical. There will never be enough people to do everything, but I am helping solve a multifaceted, challenging, high-stakes puzzle, which keeps my job fresh and fun.
Thomson: Before joining finance, you started your career as a software manager. What inspired you to shift your focus and how has your software experience informed your roles within the finance department?
Asher: Yes, I started as a programmer and software manager, but went back to business school and shifted into finance. I do believe if I had founded a startup early in my career as a programmer, I may still be doing that today. As the head of finance at tech companies, it helps that I have a good understanding of the inner workings of software development and I have a unique perspective on the value of our engineers.
Thomson: It’s been reported that 90% of startups fail. In your experience, what makes the difference between a successful startup and a failed experiment, and how can the CFO and finance team ensure their organizations don’t become part of the dreaded 90 percent?
Asher: There needs to be good foundational components in place for the startup to be successful. For instance, a big market and a product that legitimately works are crucial. If there is a solid foundation, then success is mostly dependent on strategy and execution, which are areas in which I have deep experience and enjoy. With my background, I can then quickly pattern-match against prior startups to avoid common mistakes and play to HackerRank’s strengths, so we are successful in the long-term.
Thomson: As you know, it’s important for the finance team to work with business units across the organization to drive growth. However, is there one relationship (whether with an individual or department) you believe to be most important for the CFO to foster in order to create value?
Asher: I work very closely with the field organization in every company I join. Everything is a hypothesis and wishful thinking until we can successfully sell the product and encourage customer adoption. In the field organization, the proof points and metrics are very clear, and I get great, candid feedback from our employees who are working daily with the customers, which helps me generate value.