CFO to CEO: Making the leap

Please note that the transcript is AI-generated and may contain errors. Podcast is not intended as advice and is meant for informational and entertainment purposes only.

Chris Ortega (00:16):

Hey, what’s up everybody? Today, we’ll be talking with Howard Katzenberg, the founder at Glean AI, as he shares his thoughts on CFO to CEO Guide to Leveling Up, and why it’s important for CFOs to break some of their finance habits to put on some of those CEO future skillsets. Welcome, Howard Katzenberg.

Howard Katzenberg (00:40):

Thanks for having me, Chris. I’m excited to be here.

Chris Ortega (00:42):

Awesome, man. Hey, before we get started, man, you want to tell a little bit about yourself, background? Obviously you made the transition from CFO to CEO. Tell the listeners a little bit about yourself.

Howard Katzenberg (00:54):

So listen, after business school, I basically started working on finance teams. I was one of the first employees hired for a company called OnDeck Capital, one of the original FinTech pioneers. That was in 2008. I stayed there 10 years, really helped build out their finance organization, became CFO in 2012, took them public in the New York Stock Exchange with a public company CFO for many years, and then after my 10th year moved over to a company called better.com, the online mortgage company where I joined after their Series B, and became their CFO. And I was there for a little over a year until I had the idea behind Glean AI, my new company.

(01:35):

And just to give you a sense of what Glean does, at both of my prior companies, we’re using bill.com as our AP tool. And basically, I’d still once a year task my finance teams with doing an audit of our vendor spend and top vendors, looking at our contracts, looking at our invoices, and coming up with questions like, “Hey, do we still need to use this vendor?” or, “For this vendor, the products and services that we’re purchasing, do we need to use it? Let’s look at last year’s bill compared to this year’s bill, what’s changed? Why?” And we would follow up with the department heads, and ask them a bunch of questions about the relationships. And inevitably, we’d find 10% to 15% savings from what we were spending that year. But it was a shitty process. I don’t know if I could curse on this.

Chris Ortega (02:23):

It’s fine, man.

Howard Katzenberg (02:24):

It was a painful process of just manually going through these contracts, going through our invoices, and then following up. And I was like, “Why can’t software do this, and why aren’t we catching these things in the approval process?” which was all very sophisticated that we had set up in bill.com. And the reason was we’re not giving any analytics, we’re not giving any contacts when the bill comes for approval. And oftentimes, the approvers just wait until the end of the month. They log in once. They have seven bills to approve, and they do select all. They don’t even look at the document, and they approve it. And that’s why we’re not catching these things. I started Glean because I really believed in having a much more strategic spend management solution that can leverage all the data flowing through on these invoices, and receipts, provide the contacts, provide much better visibility, and be proactive in identifying all the savings opportunities.

Chris Ortega (03:19):

Man, that’s huge, man. And yeah, in my fractional CFO and advisory service company, we encounter that a lot, and bill.com was always our go-to. So, thanks for sharing that, man. So, really excited for our topic that we’re talking about here today, CFO to CEO Guide to Leveling Up. Obviously, you gave out your extensive accounting finance, and CFO background, but you made that transition to CEO. So, one of my first questions is what was the biggest challenge that you faced making that transition from CFO to CEO, and leading that business?

Howard Katzenberg (03:52):

So, I think first just making the decision decision was difficult, because I’m wired to be a CFO, professional training. I always thought of myself as an entrepreneurial CFO. And so, just getting comfortable though to make the leap was a process for me. And what I did was I did a research on the idea. Unfortunately, I didn’t have experience. I had this problem, so I can visualize a solution, and I stayed up late at night. This is while I was still like a CFO of Better, and work on mock ups that I could take, and put in front of people. I designed a survey that I sent to all my CFO friends to help quantify how big this problem was for them, and what features they wanted solutions. It was even to validate that this was also a big problem. And I felt like I had an unfair advantage. Friends would be willing to pilot a solution. I had friends in the [inaudible 00:04:59] industry that maybe could help distribute the product once we build it. I had plenty of venture capital relationships for my prior jobs.

Chris Ortega (05:07):

Nice.

Howard Katzenberg (05:08):

Fundraising, I thought could be easy. So, for me, just making the decision, I put a lot of work into it, it felt like it was the right opportunity personally for me after putting in that work. So, that was challenge number one. Challenge number two though, I think was I’m learning some of the things that made me a good CFO. [inaudible 00:05:29]

Chris Ortega (05:28):

Oh, I liked it. I liked it.

Howard Katzenberg (05:32):

I was always considered to be very analytical. I knew the sales and marketing numbers probably better than the heads of sales and head of marketings at my private companies because I’d set up amazing dashboards, and be able to double click, and just see trends in advance. So, I was always just numbers driven, and always wanting to have good data. And especially as a startup, CEO, you had to break things. You have to go on intuition. It’s all about speed, and velocity. And I think for the first year, I had to really just be conscious of the fact that, all right, that’s the chairs. I had the CFO chair, and my founder chair, and they constantly battled each other, and I had to let the CEO chair win, let the CEO chair just get beat up a little. Now that we’re more scaled, it’s a better balance for the CFO. The chair is coming back, and thinking more about like, “All right, let’s make more data-driven decisions.” But for the first two years, it was a conscious effort to really challenge my team, and really make sure that we were going fast, iterating, getting customer feedback, and then putting out something else again.

Chris Ortega (06:40):

Man, that’s awesome, dude. I love how you broke it down in those two challenges, man. I faced a similar challenge when I spent over two decades in accounting, finance, FP&A, and financial leadership myself, primarily in high growth businesses, so software, technology, retail, e-commerce. And then, when I started Fresh FP&A, which is my business that provides fractional CFO and advisory services to those high growth companies, every day, Howard, that’s a challenge for me, man. Because I still have my book of business, and my team has the book of business of clients. And mostly, my team are client facing and client serving, so they don’t do any of the CEO or the business level stuff for Fresh FP&A, and it’s always that balance. But your first point of taking the leap, I think throughout my career, and probably you can echo this as well too, is you always got to take those risks, man.

(07:26):

And I always looked at it as, “What’s the worst that can happen?” I take the leap and I learn a tremendous amount about myself. I grow myself. And you still always have that experience, and always that expertise, and that financial acumen that you can fall back on. But definitely taking that leap of faith. But for a lot of finance, we’re so calculated, right? We’re like, “What’s the ROI on this?” And this is where I think it gets into your second challenge, where sometimes you got to be comfortable with the uncomfortable, and you have to lead a lot in building through intuition, which that CFO, we always want it. We’re pragmatic. We want to have data, we want to have accuracy, we want to have provision, we want to be perfect, we want to have all these things, and these traits that were traditionally in the CFO hat are tremendous value that we brought to the business. But when you make that transition as CEO, it’s a whole other level of skillsets that you have to develop. There’s a whole other level of velocity and speed that you talked about. So, when you look at some of those key characteristics, and traits that you had to unlearn, you talked a little bit about being analytical, but what are some of those key skill sets that make you successful as a founder at Glean?

Howard Katzenberg (08:36):

Yeah, so I think first off, just being visionary. As a CFO, you’re often focused on next quarter, maybe next year. If you’re focused on the next three years, it’s usually with respect to a financial model, not so much, “What does this company look like? What does my product suite look like?” I really enjoyed that though about like “All right, how do we think about the roadmap, and what additional problems can we solve with some of the capabilities that we’re building?” Being creative and having that vision is critical. Second, as a CEO, you have to be a salesperson. You have to be able to inspire, right?

Chris Ortega (09:14):

Totally.

Howard Katzenberg (09:15):

Yeah. Initially, you have to be able to recruit your first employees, and to sell them on that vision. You have to sell them on that financial upside, right? Same with investors, you have to sell them on the opportunity. Yeah, I still talk to a lot of customers and potential partners, so I have to sell them on value and the ROI that they’ll see in Glean. And having a CFO background actually I think works to my advantage. Because no one meets me, and is all, “Oh, he’s such a salesperson.” I come across as genuine. The fact that I was A CFO, people, they like that, and I think it just makes me more trustworthy, and helps me as someone in a sales role. So, I think being able to embrace that is certainly critical in a CEO position.

(10:01):

I would say a third thing is adaptability. So, I probably underestimated this a bit because when you’re a CFO, it’s a pretty cross-functional role. You have exposure to all different parts of the organization. You see how everything fits together. At the same time, you’re not necessarily rolling up your sleeves, and coming up with product strategy or helping the marketing team up with new cases. But as a CEO, especially for an early stage business, I’m doing that. I’m creating the product strategy. I’m helping the product team come up with product requirements. We’re doing the prioritization. I’m developing marketing campaigns and helping them refine the list that we’re purchasing, working with the engineering team.

(10:48):

I’m a programmer myself. I’m able to talk the language with them, and help them assess the talent that they’re bringing on board, strategy, finance. The finance partners come see to me, but you got to be go deep in all these areas, and not just have surface level understanding. So, I think I used the word adaptability, but ability to go deep is important. Likability.

Chris Ortega (11:14):

Ooh, nice.

Howard Katzenberg (11:14):

You have to recruit a team, manage a team. So, hiring, motivation, leadership, I think you can those skills as CFO if you’re scaling a finance award. But they’re very transferable. They’re very important as A CEO, if not more important if you’re leading the organization. So, just having that ability to engender trust and be likable for your team, I think that’s something I’ve done.

(11:37):

And I think I always talk about, this is probably true of founders, founder CEOs. I think as you scale on your career, more late stage CEOs, it may not be as important, but resiliency. As a startup founder, you get beat up a lot. You got to be able to take punches. You hear the word no consistently from people you want to recruit, investors you want to bring on board, partners and customers that you really want to close. And then, ultimately, something happens, and they say no. And whatever happens … and it might suck, but you got to put on a good face, and go back to your team, and just move on. Shake it off, like Taylor Swift says, and just move on to the next opportunity. But in the moment, it sucks, but you got to be resilient, and get back up, and show your strength.

Chris Ortega (12:26):

Man, that’s awesome, man. I love visionary, salesperson, adaptability, motivational, likable, and resiliency, right? I love how you mentioned all those, Howard. And not one time did you mention to say, “Hey, you got to know ASC 606,” or, “You got to be a subject matter expert in IFRS 15.” These are all things, and this to me is … just sharing back to my experience, and I think we’re similar. And it’s so great to sit across from another CFO, and be like, “My superpower, when I was helping grow high growth organizations and basically build them up from seed to startup all the way to acquisition was I always … ” and this is me giving all the listeners, and you … I’m just a salesperson that loves finance, man. I’ve always masked myself that way.

(13:10):

When you’re dealing with a high growth SaaS business, sales and marketing were always my primary business partners. I loved working with them, and I love the mastery aspect of how they deal with the objections, and how they’re thinking through solutions, and how they’re influencing a buyer’s behavior, and how they’re navigating all these different milestones and things that get along the way in business. And I always flock to that. And now when I put on my CEO hat, in building Fresh FP&A, I come naturally with that sales perspective. I think a superpower for any finance person right now as a takeaway, go meet with that VP of Sales. Go meet with that VP of Marketing. Go learn the business. Go learn outside the debits and credits, and go learn what drives the business. Go learn the people on the front lines that are selling the solutions, or building the relationships with investors, or things around that.

(14:03):

It’s out of that list. But that’s also when you think of traditionally finance, we are the … Let’s go to the laundry list. We’re introverted. We’re analytical. We don’t know how to talk to people. We live in Rx sales. To me, that transition of developing that sales mindset, you got to learn it by … The only way that I can tell … Yeah, you can go look at a LinkedIn book. You can go to a sales conference. But the best way to learn and develop those skills is you got to go out, and do it. It gets back to your first point. Take the leap of sitting with that salesperson, and sitting on deal cycles.

(14:38):

I remember I was sitting on sales forecasting calls, and they’d be like, “Why’s the finance leader in here?” And I’m just like, “Hey, I just want to listen, understand, ask questions.” And it is so much value to that. And I think that’s such a great skillset. And a lot of finance people, and a lot of fractional CFOs, a lot of people that I meet in business, they don’t do a great job of selling themselves. And it’s not like selling yourself in a bad way. But if I sit across from people, and I’m like, “If I’m not passionate about what you’re talking about, if I’m not passionate about your business, or the project that you want to partner with me on, if you’re not passionate about it, why would anybody else not be? Why would they be passionate about it?”

Howard Katzenberg (15:18):

Exactly, yeah. I get asked a lot by accountants, people on the Accounting teams, and FP&A teams how they can be more strategic, and help develop that more interpersonal or salesy type of skillset. And often for the accountants, I suggest … all right, well, accountants, their main function is looking backwards, providing the financial reporting. Once you are done, ask, “So what?”

Chris Ortega (15:45):

Oh.

Howard Katzenberg (15:45):

“I just provided this report. So, what?” Analyze that report, and now sit with the FP&A team, and ask the, “So what?” Question. Sit down, and you can develop the interpersonal stuff with them. Think of as yourselves as maybe not being a cost center of the business, but like a value center. Maybe you can sit with other departments? Every transaction is flowing through Accounting. What other types of reports can you provide to your sales team or your marketing team, or your ops team to enable them to make faster and better decisions? So, that’s one way I encourage them to get out their silo. And for the FP&A teams, I often encourage them, just ask the other departments, “How can we be a better partner to you? Just ask that question, open-ended, and see what they say.” And they’ll list like 30 things, because there’s always more need for analytical support. So, those are two discrete things I often recommend to accountants and FP&A professionals.

Chris Ortega (16:44):

I love it, man, the, “So what?” Question. And to me, I think it gets back to breaking another stereotype in that CFO role that doesn’t really transition over to the CEO, right? A lot of times, finance, we’re so used to commanding the business. “Hey, salesperson, fill out this Excel file to look at our bookings,” or, “Hey, Marketing, give me your updated budget.” We’re so used in our traditions in how we grow up in finance that we command the business. But the more that we can be collaborative partners, I love those two questions as an accountant asking, “So what?” or why does this matter, I think even talking about a sales strategy that I learned that is like a superpower, it’s called WIFM, what’s in it for me?

(17:29):

And I always look at the audience that I’m talking to. We talk with a lot of CEOs, business owners, founders at a lot of different, all across the world, from seed to enterprise level companies. And I always challenge my team to say, “What’s in it for them?” If I’m sitting across from a marketing person, and the more that you can understand WIFM to the audience that you’re talking with, whether that’s HR, and you’re talking with an HR leader, and you’re trying to understand what’s in it for them, and maybe it’s a person that they want to be really good at a project, or they really want to increase their financial acumen, or they’re going through a … they want a great sounding board as an advocate, right?

(18:04):

The deeper that you can understand that, and now bringing that data to support the WIFM in it, that’s a combination that is screen success inside the business is because we are now meeting the business where they are, right? We’re going into that conversation to say, “Hey, it’s not about commanding you in the business. How can we be more collaborative? How can we build that connection?” Because like you mentioned earlier in a topic, I think finance, and I may be a little bit biased, but there’s no functional area inside of a business that is more advantageous to tell the whole story across the business than finance.

Howard Katzenberg (18:42):

Correct.

Chris Ortega (18:43):

Everything stops with us.

Howard Katzenberg (18:45):

And they see everything.

Chris Ortega (18:47):

Yeah, yeah, and I think one of the most important aspects I want to ask to you is you talked about the different skill sets that we need. You talked about the biggest challenges that you can have. What is some other advice that you would give to the listeners, those accountings, those FP&As, those VP of Finance, maybe they’re thinking about starting their own business. One of the things that we’ve seen post-pandemic is this, starting these entrepreneurship journeys. So, if you were to give somebody that … You did it, right? You came from better.com.

Howard Katzenberg (19:18):

Yeah, absolutely.

Chris Ortega (19:18):

You’d be like, “Hey, man, I got this great idea.” What would be some advice or resources that you would give those listeners that maybe want to know that quick start guide to get them on their entrepreneurship journey?

Howard Katzenberg (19:29):

Yeah, so it’s great questions. First off, I would say know yourself. So, I always had CEO envy, not position/title. It would be like, I disagree with that decision, and I want to be the one on the hook if it’s wrong. I want to be the one accountable for some of the strategic decisions being made. And if you, as a CFO or wherever you are in your career, if you’re constantly getting that feeling, it’s probably a good indication, you may want to take that leap to … Maybe it’s not CEO. Maybe the next step is COO, but you may want to get out of just finance, and try something a little bit more broader if you’re getting that urge. So, that’s tip number one.

(20:17):

Tip number two, and you’ve referred to this before, you have to be comfortable with the uncomfortable. A lot of finance people are not. So, you have to really understand your relationship with risk, especially if you’re going to … Again, a later stage CEO may have to deal with a lot less risk than someone just starting out, out of the gate, where they’re not collecting a salary, they don’t know if they’re going to raise capital. So, you have to understand, am I going to panic as soon as something goes wrong? Because everything does go wrong, and nothing goes according to plan.

Chris Ortega (20:51):

Yes, correct.

Howard Katzenberg (20:51):

So, I think a lot of people that get into finance, naturally, they’re very risk adverse. You need to understand your relationship to risk, and how you will react in certain situations, and just know going in, things will not go according to plan. So, that’s my second tip to do that type of introspection. Third is, and this is more of a resource, to get good objective feedback on your business idea, read a book called The Mom Test. I’m blanking on who wrote it.

Chris Ortega (21:24):

What’s that called? The Montes?

Howard Katzenberg (21:24):

The Mom Test.

Chris Ortega (21:25):

The Mom Test, okay.

Howard Katzenberg (21:28):

Yeah. Basically, the whole premise is if I ask my mom, “Mom, what do you think of my business idea?” Because she loves me, she’ll say, “Oh, it’s a great idea,” right? She’s not going to give me the truth. She just wants to be nice. If I ask my friends, they’ll do the same thing. So, you want to ask questions, and this is Product 101 in how product professionals can get really good feedback. You want to ask questions in a way that is not [inaudible 00:21:57]. It really gets to what are theirs problems, what are their pain points? And The Mom Test, it’s a very quick read. It really helps you understand what questions to ask, and how to [inaudible 00:22:09] great information from would-be potential customers. And to me, in late 2019, when I was doing all the research and discovery around Glean, that was a very useful technique I learned to validate the market opportunity.

Chris Ortega (22:26):

That’s awesome, man. I’m going to check that book out, The Mom Test. I know if I ask my mom anything, she’s going to be like … This is just my mom. She calls me Bunny, Howard. So, it’s fine if the listeners know that. Yeah, my mom calls me Bunny, everybody. But she’s like, “Bunny, it’s the best idea ever.” And I’m like, “Mom, I need to … ” I think that’s really great. Know yourself. Truly, deeply know yourself, and be honest with yourself. Knowing yourself is being honest, right? I know for me, yeah, I can do … I’ve done all the tactical stuff, but I know when I started Fresh FP&A, I was like, “I don’t want to be like all the other fractional CFOs that laying with the county services, and then try to upsell fractional CFO.” Our team, we have all the experience we want to do that.

(23:04):

And then I would add as another piece of advice for those people that are thinking about making that leap, a lot of times … And this gets back to another core competency of CFOs and finance people … we want to have precision. We want to be able to have the plan, 99% confident around it. But one thing I’ve learned throughout my career is create MVPs, minimum viable projects, or products, or just create them. Build it, shape it, get feedback, and continue to have this feedback loop of MVP, a minimal viable project that you’re putting out. For me, before I started fresh FP&A, and took the leap full-time to build this business, I was doing CFO finance consulting stuff with friends, and families, and people that needed help along the side before I built that.

(23:51):

Before I got to that leap of faith to say, Hey, I’m ready to go after this. I’m ready to marshal after this full-time. So, don’t let perfection be the eliminator of progress. And I think a lot of times we want to be perfect. We want to have the plan. We want to have the capital. We want to have all these things trace, and agreed, and no gaps in it before we take the leap. But a lot of times, you can build that along the way. And it gets back to one of the most important points that you talked about.

(24:22):

One of the things I’ve learned as being CEO,, man is I have this infatuation with failure. I am obsessed with failure. The reason why I’m obsessed with it is because failure to me is never a loss. I never take an L when I fail. I take an L in learning, right? I’m going to learn from it. And this comes back from my personal life and my professional career, the more that I failed in my life, the more that I’ve learned. And I would actually venture to say my failures are probably the biggest opportunities I’ve had than any of my wins. Because the wins, you’re going to keep doing. You win on a forecast, you’re going to keep doing that. So, man, I love that advice, man. Know yourself, be comfortable with the uncomfortable, and make sure to check out the book, The Mom Test, and build that great network of people that are going to give you constructive feedback.

Howard Katzenberg (25:12):

And I’ll just conclude. If after doing all that, if you can convince a loved one, maybe it is your mother or maybe it’s a wife, or if you can convince someone who’s going to be naturally skeptical, because they don’t want you to make the wrong decision that you’d be crazy not to pursue this opportunity, because you had that unfair advantage, and you’re just destined to do this … If you could convince someone that’s going to be skeptical that you have to do it, you should do it.

Chris Ortega (25:46):

Nice.

Howard Katzenberg (25:47):

And they know you, so that’s my last part of that piece of advice.

Chris Ortega (25:53):

Nice, nice, winning over the skeptics. Hey, man, Howard, I really enjoyed this conversation. My last question I ask every guest, what is your number one hot finance trend and why?

Howard Katzenberg (26:05):

Yeah, this might be a bad answer, because I’m sure everyone’s saying it, but AI.

Chris Ortega (26:10):

The founder of Glean AI, I was expecting … Howard, if you didn’t say, “AI,” I was going to be like, “Man, what are we doing?”

Howard Katzenberg (26:17):

Gleaning insights on your vendor spend using tools. But the power of AI is incredible, not just on looking at invoices, and doing what we do, but you think about just writing technical accounting memos on policies, and stuff. I’m pretty sure I can just ask ChatGPT to come up with an accounting policy for me, and it’s going to get 90% of the way there. And maybe I need to do the rest of the 10% at the edges, but it’s going to cut down on a lot of time, and maybe even some headcount that you need on the team. Or if I can feed into some prior MDNA analysis, and some quarterly financials that I did, and put in this quarter’s results, have it generate a draft one for me, large language models can do that today. And then, again, it’s the first draft, I’m just going to do the rest. So, I think we’re just beginning to see the power of the large language models right now, and I’m really excited to see all the applications that come from it, including [inaudible 00:27:24].

Chris Ortega (27:24):

100%, man, I agree with you. Generative AI is awesome. And to all those accounting, finance, FP&A CFOs, and finance leaders, I would highly recommend go check out Glean AI. You talked about bills.com, and if you’re trying to get some AI solutions that get down that road, and start to develop some of these skillsets, and mindsets that we talked about today, I would highly recommend go check out Glean AI. Howard, deeply enjoy your insights and perspective, man. Thank you so much for sharing this. And if people want to follow you, or connect with you, learn more about Glean AI or connect with you, what are some resources they can go find and reach out to?

Howard Katzenberg (27:58):

Yeah, just on LinkedIn. I post a lot on LinkedIn. Howard Katzenberg is my handle. On Twitter, I guess it’s not even called Twitter anymore.

Chris Ortega (28:06):

It’s X now, right? Which is weird. This is a whole other conversation, X.

Howard Katzenberg (28:12):

The social media site format known as Twitter. I think my handle is just Katzenberg. And then, just, I think we have blog posts and stuff on Glean. Yeah, LinkedIn is usually the best place to find me.

Chris Ortega (28:24):

Awesome, awesome, man, yeah. Hey Howard, thanks so much for your time, man. Thanks for being part of CFO Trends, brother.