Why Some SaaS Metrics Are So Hard to Get To - Lessons from Zuora's former CFO
Why Some SaaS Metrics Are So Hard to Get To - Lessons from Zuora's former CFO
Kate McCullough, Co-founder, Nue.io
Description
Finance teams are built on the accuracy of their data—and the strength of the metrics that get them that data. So it makes sense to focus in on these metrics and really hone the ones that will work for your business. But if your analytics aren’t producing clean, up to the minute numbers, you risk throwing your whole system into chaos.
We sat down with Financial wizard and CFO at Freshworks, Tyler Sloat, for an education on the SaaS metrics leadership will ask for, which metrics matter most for exec teams, why it’s so hard to get to them, and how to make sure your data comes back clean and accurate, every time.
Transcription
Welcome to RevOps Review, our podcast, and I'm here today with our CEO at Nue, Mark Walker. I'm a co-founder of Nue. My name's Kate McCullough. We are joined by Tyler Sloat, who's the CFO of Freshworks, to talk about why some SaaS metrics are really, really hard to get to, why some matter more than others, how you need to think about systems in adjacency to metrics.
Kicking off, Tyler, do you want to just introduce yourself and tell us a little bit more about your background?
Sure. Well, first, Kate, Mark, thanks for having me. Excited to do this with you guys. As you mentioned, Tyler Sloat. I'm the CFO here at Freshworks. I've been here for three years. Came on as CFO really with the job of coming into a company that was really already at scale and just having incredible go-to-market motion with great products and getting us ready to take that in the next level of maturity in terms of from a corporate side and take it public. We went public about a year and a half ago. On a NASDAQ and have been doing well. Our products really are focused on helping our customers help their customers, so we have CX products. And then on the inverse helping our customers help their employees. Freshservice is our ITSM product that is playing squarely in that mid-market, low enterprise space and doing really, really well. We have Freshdesk, one of the enterprise-grade customer support software, and we have a CRM product as well. That is our third product.
The company was a US company but founded out of India. Really, when we talk about metrics, it's really interesting because we have three go-to-market motions, an inbound motion, outbound motion and partner motion that we're selling from SMBs all the way up to enterprises and doing it on a global scale. So, there's lots of stuff to look at.
I came to Freshworks from Zuora where I was a CFO for just under 10 years. I joined them when they were around 40 employees and then we built that up and took it public. And so Zuora Century subscription management software really centered around billing primarily. And being positioned as kind of this cloud in between, after CRM, before financials. Freshworks was my fifth private company and really my first foray into SaaS was ATS Systems back kind of 2002, 2003. The inventor of CRM arguably where they saw this little company Salesforce coming up.
And so they bought a company called Upshot, with a partnership with IBM and they asked me to run, I was there and doing sales and marketing stuff with SBO when I had just gotten there out of business school and they asked me to go run finance for CRM on demand. And so we really learned a lot there. But really learned about how different SaaS is and subscription based models are from perpetual based models.
Outside of that, been advisor to a lot of small companies, been on a couple of boards and really had a mix of hardware software over the years, including running finance and ops for a hardware encryption business that we sold the NetApp and then being the controller of NetApp for a while. But that's my background. I'm really happy to be here.
Thank you for that. So you've worked with the diversity of products, pricing, different models, upmarket, down market. So you're the perfect person to ask this question, which is what in your mind if you were to boil the ocean, are the most important SaaS metrics that finance teams should really focus on? And that's a broad question, so take it any direction that you'd like.
Yeah, I think whether they're SaaS or not, we'll get to SaaS, but just metrics in general. I think finance's job, the CFO's job is to kind of number one, governance and compliance. And that's kind of table stakes these days. But second is really to, in my opinion, to run the business model for the company and help the company, number one understand and then action on their business model. Business model is not a budget, it's really the levers on what drives the business, whether it's growth or efficiencies or whatnot. To do that, number one, you got to have kind of ways to help guide your management team and the company along, in terms of understanding the data and then being able to action on it.
So what I really think about it is first of all, the most important thing is whatever metric you choose, and I'll get into what I think are the most important, number one it has to be available. Meaning that it has to be something that you can consistently provide back to the business in a consistent fashion. Meaning it has to be measured the same way over and over again.
The second it has to be understandable, meaning that if you're going to go tell the business or your management team partners that this is a metric that's important. You've got to be able to demonstrate why it's important and why this is fundamental to your business and how it's going to drive the results you want. And then third, it has to be actionable. Meaning that if it's understandable, it's like how can we then change behavior within an organization to actually optimize for that metric and that in particular.