Becoming a SaaS Guru

Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results, with your host, Megan Weis. Let's jump right in.

Megan Weis: Today my guest is Anthony Nitsos. Anthony is the Founder of SaaS Gurus, which helps SaaS CEOs and founders by giving them advanced finance and stakeholder ecosystems to get the numbers easily and enable rapid growth, all while saving cash. Anthony brings a unique mix of medical school training, Six Sigma Black Belt process expertise, and the financial skills of a CFO with two unicorn exits and numerous other startups to his credit to provide the world's most sought-after resource for B2B SaaS company financial strategy and operations. Anthony, thank you so much for joining me on today's episode.

Anthony Nitsos: Thank you, Megan. I really appreciate it.

Megan: Today we'll be learning about you, but also about what makes software as a service so unique and what you've learned throughout your experience in helping these companies scale quickly and set themselves up for success. I'm looking forward to this discussion so let's get started.

Anthony: Great.

Megan: First, let's start with you. If you could share your story of how it is that you got to where you are today.

Anthony: You know it's funny because I did not follow by any means a traditional path to what I'm doing right now. I actually started off as a medical student at the age of 18 at a major university, and about three or four years into that program decided I really did not want to be a doctor.

Megan: Wow.

Anthony: It was a pretty major life change. There's a very practical implication is what do you do for a job when you have a partial medical degree, right? There was this thing, I'm in Michigan and everybody's making cars or car parts, and manufacturing is all around, so I just gravitated to basically answered to a job posting for what turned out to be was a logistics expert position and got into manufacturing. It was pretty clear very early on that manufacturing processes very closely mimic in many ways the human body. The training was really pretty easy to get into there and say, "Oh, here's, here's, what's broken, let's fix that."

I did that for a while and that dovetailed with the scientific training that I had. Then after that, I landed at that point because I'd already been taking accounting courses on the side because I thought accounting was really cool, and a good way to understand the company along with the operations when I got courted by what was then called an ERP implementation, a third party implementation.

This was back when everybody thought, in the late 1990s, that at the year 2000, their code would explode and systems would shut down and airplanes would fall out of the sky, the big Y2K thing, which turned out to be a wet firecracker, but before that, nobody understood it was going to be a wet firecracker. All of these companies with these legacy systems said, "Oh, we need ERP."

The ERP market was like, pretty much anybody who frosted the glass got a job, but then I moved into there but that really just expanded what I was looking at because from the system of being just manufacturing, it's now involving engineering, it's now involving accounting and finance, procurement, supply chain, financial reporting, profit margins, it all ties together. That's what ERP did.

I did that for a number of years with a company called TRW, which is fairly well known, actually, in the aerospace industry as well as Automotive. From there, here I am, I just keep adding this science but what I noticed was that the accounting and finance folks really knew more about the company than just about anybody else. My next step then was to move from that ERP experience, was to actually take that experience and help a company scale and this was my first opportunity.

I was hired in as a controller. My first accounting job was a controller. I didn't realize until later how shocking it was my first accounting job as controller. Thank God the prior controller had left a series of books on his shelf that said, "How to be a good controller."

[laughter]

Anthony: I spent my first three months not sleeping, in a panic that I would screw something up as I rapidly learned how to become a controller, which I think, it's like your mind talking about totally nontraditional ways to end up in finance and accounting. I think that one was a little unique. I went from venison to manufacturing, to IT, to controller.

[laughter]

Megan: That is an amazing jump.

Anthony: Makes total sense, right? It feels like, "Yes, of course," but it turned out well. What it did was I was able to take all that prior experience and say, they had hired me and not because of the fact that I had strong accounting skills. That was a chance they were taking, but they were hiring me in because I had ERP, I knew manufacturing. I was in Automotive. I spoke Japanese at that point, a fair good level of it, conversational at least, not since then, it's surely very rusted, but, and they had just been acquired by the Japanese.

They said, "Here's your 70,000 square foot new facility. We're at $5 million in revenue right now. We're going to 10X that in the next three years. Here are the contracts that are going to do it. You get to control everything that doesn't operate a production machine, so you control all the electrons." Then they said, "You have three people and when you're done and we're at $50 million, you get to have three people, you don't get to add any headcount to GNA." I'm like, "Oh, okay."

Megan: That's like mission impossible.

Anthony: Yes, but the thing is, the Japanese were very interesting in that the word controller to them did not have a capital C, it had a small case C, and in their minds, there wasn't a single thing in the organization that did not have a financial impact, true. Therefore, the person who's in charge of making sure you're being as efficient as possible with your money, and the Japanese are very big on efficiency as we know, and makes no difference no matter what it is, you need to get really good at this and really fast at it. You can stick your nose into just about anywhere in the organization where you feel money is being wasted.

Well, that's a pretty powerful remit and also in charge of all data. I said, "Great. What's state of the art?" Back then, state of the art was barcode scanning, right? EDI was called Electronic Data Interchange, which was a wire-to-wire transmittal of standard file formats for things like ordering materials. All your procurement and ordering was already automated. What you really needed to do was automate labor and materials, and that happened on the shop floor. I got to basically buy whatever system I needed to make that as automated.

In the end, we were able to do it. We were able to scale to $15 million in revenue, and I still had the same three people, myself included, me and two others, working in the back office, running all the finance and accounting. That was my first scale.

Megan: That's amazing.

Anthony: From there, the story goes that, all right, manufacturing automotive in Michigan is, unfortunately, a sinking ship. If I'm going to continue to stay gainfully employed, I need to get out of this industry, or at least there's enough turmoil where in one case I was literally fired from a job two days before Thanksgiving because they didn't have enough work for us. It's like, "Well, that's really annoying. Thank you. Merry Christmas."

That informed me from then on. I would never fire from that point on, I will never fire anybody around Thanksgiving to Christmas. It's just like, look, find a way to pay them through that then tell them after the beginning of the year, let's not ruin their holiday, really is what it comes down to. Frankly, most companies can afford that, to be honest. Realizing that manufacturing was probably not a good idea, and oh, by the way, accounting's fascinating, it's like the electron microscope of the company, you get to really understand it.

Again, building on that thankful medical training all the way back in the beginning, it's basically science training, and applying it as you go forward, builds a case for efficiency and how to really scale companies I think. That scaling experience though was at that point, I was done, there wasn't any more challenge. I said, the guys over in finance, those are the ones that are interesting because they're looking forward, they're planning out, they're looking at funding. That's the money side of the business, accounting is really that, it's keeping score, it's looking at historical, what's happened. Finance by its nature's forward.

I decided to do something that nobody in the industry does very much because it's risky, which is take a sabbatical. I said, "I've had enough work for a while. I want to go back and learn something new." I skipped over to St. Andrews, Scotland. There's a university there that a certain Prince attended. I think he's in line to the throne or something. Anyway, this university happens to be a one or two train stops down for him where Adam Smith, who basically invented modern economic theory lived.

The University of St. Andrews has been around for 600 years and I looked at it and said these guys probably forgot more about financing than anybody else out there since they were there at the beginning, and so that's where I picked up my finance degree and came back to Michigan because that's where my family was and that's when I got into the fractional space. That's when being fractional CFO, fractional controller because I came into these situations saying, how can I get the numbers out as efficiently as possible so that we can make decisions based on it, which is finance.

That's pretty much where I am today, which is I work with founders and I have folks that work with founders, especially in SaaS, especially if they're venture-backed, PE or VC, doesn't really matter. Primarily software, but we have a significant number of clients that are what I call recurring memberships, which behaves the same way as SaaS, call it MaaS I don't want you to come up with a new term, but it's recurring revenue.

The principles are very similar, they're very same. The tech out there is constantly advancing and evolving to make things even ever more efficient. There are easy ways to integrate systems now that did not exist before because we're in the cloud. Things are not on premise anymore. Things are in the cloud, so you can plug and play them a lot easier. Doesn't depend on your operating system anymore. It doesn't depend on where your hardware's located anymore. Those days are pretty much over. Staying abreast of all of that, that's been really fun for me and that's what gets me up in the morning. It's like, okay, what new and interesting ways can we make ourselves more efficient and of more value to our clients?

Megan: How did you come to specialize in SaaS?

Anthony: Well, it was a dark and stormy night. I'm just kidding.

[laughter]

Anthony: Well, actually, it was a gloomy February is what it was when I was sitting in front of my computer. I think I was doing some business development or something. I was trying to find new clients when I got this email from what I thought was a head hunter and it turned out to be the CFO of a local software company. He said, "Hey, we're looking for a manager of accounting. I know you're in the space. Do you have a resource or do you know somebody?" I said, well, I don't know about manager-level stuff. I said I don't know anybody at the time. He said, "Well, we're also looking for a director, a senior director of finance and accounting. We really need to scale the company," and somehow, the alarm bells went off in my head saying this sound's interesting.

I ended up getting that job. I was the senior director of finance and accounting at a company called Duo Security, and this was my second scale. This was a SaaS company and they were venture-backed and they were here in Ann Arbor, and so it was very easy, no commute, just basically I bike to work, which was great. I felt like I was living in Silicon Valley without the sun, which it was because Michigan is dark and gloomy in February. So we-- [crosstalk]

Megan: I'm from Ohio.

Anthony: In that case though, I did not have an empty 70,000-square-foot factory and total control over all electrons that were not production related. I inherited a mess and had to make order out of it, and that's what, that's pretty much what we did is we built the scaling using all those principles from before as best I could. Single point of data entry, prevention before detection, all the Six Sigma and total quality management tools, and everything else and scientific methods to try and knit together a back office that would support a company, which did in fact grow 10 times, eight-figure revenue to nine-figure revenue in three and a half years.

Megan: What is it about your background in ERP implementation that taught you how to scale?

Anthony: It was trial and error. A lot of mistakes, basically. I hate to say it because the first client that that happened on, it was a terrible experience for him, but because ERP was so new and integrated so many different areas and systems, it was really unproven in many ways territory. SAP had been out there for a while, but they were like the behemoth and only major multinationals employed them or utilized them. You start moving down into the mid-market, which is where a lot of these companies were, this was entirely new to them and so we made a lot of mistakes the first time out. That's why I said, if you frosted the glass, you got a job as an ERP consultant. I happened to do more than frost the glass so they made me manager.

[laughter]

Anthony: Right, and it was like, okay, so we had no training material, we had no data migration maps. We had none of the pieces of information that we take for granted now in terms of how do we put together a major system or how do we bring one up live, and so we had to develop them. Because I was this weird mix of medicine and manufacturing and finance and accounting, this was another one of those situations where I landed and they said, "Here, let's let Anthony do it," and so that's what we did, and so we developed the processes to make it as efficient as possible.

Didn't always work and there were a couple of spectacular failures, but unfortunately, somebody's got to build the airplane first sometimes, and when it comes to these back office systems, now, there's a lot more standardization, there's a lot more availability, but back then, we were developing first techniques in some ways.

Megan: Failures are always the best lessons in life.

Anthony: Especially if they're somebody else's and not your own, but--

[laughter]

Megan: Yes, that's the best-case scenario.

Anthony: Right.

Megan: You're the founder of SaaS Gurus. Can you tell us a little bit about that company and how it is that you came to start it up?

Anthony: After the Duo Security thing, then I jumped over to another Ann Arbor unicorn called Lomasoft and basically did, for a shorter period of time there, I was really hankering to get back to the entrepreneur side of things of doing it myself and not being salaried, so moved back in but it was very apparent that this knowledge of SaaS and how SaaS worked and having built all the systems and standardized, and also having a ringside seat at numerous rounds of investment with the CFO who was very open and sharing with all that information, which was kind of a deal I had with him. I said, "Look, I'll give up my client base and come work for you, but I really want to learn this particular aspect of it," and he was great, that's what he did, he taught me.

That information said, look, SaaS is great. SaaS is fairly new, there's a lot of exciting stuff going on with everything from AI to augmented reality, to health tech, to FinTech, to just an array of interesting solutions, and VCs are interesting to deal with. It's a high-risk environment so there's a lot of change and it fits. It's what I like to do. I like to solve these problems, but I like to permanently solve them so that in SaaS, we can say, look, if you come to us, we're pretty much going to give you our best knowledge on SaaS. That's what we specialize in and all of our systems experience to set everything up so that you can scale If you want.

Whatever level you're at right now, you can plug and play this stuff up to a hundred million without having to redo anything. The numbers come to you, not you go chase them and we get to talk about interesting stuff like client contracts and forward-looking financials and pre-money valuations for investment rounds, and the stuff that is truly finance. It's more efficient for them because they're paying for CFO work that's actually CFO work and not accounting work. Everything up until the financial reports is pretty much accounting so that we focus on making as automated as possible and continually to improve on that. Because, again, as I said, the market out there for software solutions, for accounting, is rampant that it's, and it's constantly evolving.

Megan: What makes SaaS unique?

Anthony: For me, SaaS is unique in that it's you're looking at a lot of leading-edge technology. I'm a science fiction fanatic, have been since I was a little kid, and read my first science fiction in second grade and I was hooked. For me, the stuff that's outward-looking, the stuff that's on the expansion, that forward line of expansion, I can't go out to space but I can at least do it on the virtual world and say, "Here's a really cool augmented reality app that gets kids who are just postoperative up and out of their beds so that they get out of the hospital, sooner and healthier and use less pain meds. Isn't that a great app, isn't that a great use for augmented reality," and it goes on from there. There's all sorts of really fascinating stuff going on out there and I like being in the middle of it.

Megan: You operate with a do-it-with-you model. What does that mean? What's do-it-with-you?

Anthony: Well, so we don't believe in pure outsourcing, right? I mean a lot of this stuff, so who's going to run the system? All the numbers system in the background is we don't necessarily want it to be our people. We want it to be our clients' people. Sometimes there's an incumbent. Sometimes there's a controller, an assistant controller, or a good accounting manager, they just don't know SaaS, or a CFO just doesn't know SaaS and needs somebody to say, okay, here's how you set that part up. Here are the things that you need to consider.

It's doing it with our clients because we'd prefer that they have somebody they already have that we train them in how to do this and how to operate it, and it's pretty easy. Like I said, it may look like rocket science on the outside but once it's set up, it runs pretty well and so it's easy for somebody to operate.

Megan: What are your proudest achievements since starting Saas Gurus?

Anthony: I like to joke that we're the most loved CFOs in SaaS but we've had that comment come back to us in a couple of ways. Like recently, we were actually in a board meeting and the CEO says I love having numbers. I think my proudest achievement is delighting our clients, not just satisfying them but making them actually say, "Wow, this is great." It's not, "Oh, thanks." Too often, in accounting and finance, it's the second answer that we hear or the second feedback. For me, it's really giving them that extra mile.

It's like say, the investor wants to see your financials as of the end of April. That's great, but you know what, let's delight them and give them the end of May because May is done and it's only a few days into it. Going those little extra miles for the client, that's the stuff that-- that's what makes me smile because they smile.

Megan: That's always a nice feeling. On your LinkedIn page, you state that you scale B2B SaaS companies by setting up a state-of-the-art finance and stakeholder ecosystem. What does that mean to you? First of all, what is a stakeholder ecosystem? Secondly, what makes it state-of-the-art?

Anthony: I need to talk to my marketing people because we don't want to use that clumsy phrasing anymore.

[laughter]

Anthony: Because everybody else is saying what on earth is the guy talking about, finance and stakeholder ecosystem. It's like, okay, let's have our moments of geek.

[laughter]

Anthony: What I was trying to get at is, it was a comparison I said, it's like a coral reef, right? You don't see the coral reef from the surface of the ocean, but it's there, and if it's not healthy, the ocean isn't healthy. That was my science background coming forward to come up with an analogy. That's what it is a stakeholder in our minds is a customer, a vendor, an employee, an investor.

Somebody who's got a contract or somebody who has a relationship to the company. How you treat your employees and how you interact with your vendors and how you interact with your customers, in addition to all the numbers, that goes all the way up into sales operations, it goes into HR operations. It goes into other areas of the organization where you can make everybody's lives easier literally.

That's what we look at is not just the finance and accounting side of things, we're also looking at the HR ops. We're also looking at sales ops and saying, look from the point of first contact to the invoice being collected, what does that step-by-step process look like? How do we set that up so there's a single point of data entry and everything is added to that record from then on so you don't have duplicate and triplicate on down through. How do we set it so that errors don't happen in the first place so that we don't have to go looking for them? All those principles but so that's how we do it.

Megan: In your mind, what are the keys to rapid scaling and where is it that most companies fall short when trying to scale quickly?

Anthony: I think it's exactly the two basic principles, which is the key to scaling is repeatability. Being able to do-- In science, there's a term called- in math, I should say, there's a term called a logarithm. A logarithm is something that doesn't go up in a straight line, it goes up like the term hockey stick. You've heard that, hockey stick growth. That's a logarithmic scale. You're going from 10 transactions per day or 10 transactions per minute to 100 transactions per minute or 1000 transactions per second. How rapidly are you scaling?

In order to scale like that, even to get started at that, there are certain principles in the back office that are really critical, and one of them is enter your data once and preferably have somebody else do it so you don't have to and make sure that that becomes the source of truth from their forward. All of your systems from your quoting to your CRM, to your finance, to your customer success, to your budgeting and financing and your financial reporting and your cash forecasting. All these systems related together making sure that they are all coming from that single as much as possible point of data entry.

When you enter it, you idiot-proof it, I don't know if that's politically correct anymore to say that. You foolproof it so that you can't put bad data in. At that point, data becomes information because it's just programming and assembly from that point. Getting the data in it goes back to those first principles of accounting or first principles of computing, garbage in, garbage out. What happens too many times is, especially startups, somebody says, look, we need an accounting system. Okay, great. Let's go get QuickBooks. All right, we need an HR system. Let's go grab Gusto. We got a lot of sales leads coming in. Well, let's grab HubSpot.

What's happening is you're grabbing tech and you're using it and you need it in the moment, but you're not setting it up so that it talks to each other si instead of having a tech stack, you have a tech pile. Principle number two is, have a plan. A single point of data entry is great, but you need to have a plan to say, look, we're going to start off with accounting. We don't want to be reproducing data, so how does the customer information get from the CRM HubSpot to accounting? You start asking some of those basic questions so that you start connecting these systems from the beginning, you don't let your tech pile grow into tech chaos. You have a tech stack that relates with itself.

Like I said, there are a lot of easy ways to do that. Many of these software applications come with out-of-the-box connections. Your expense reporting integrates with QuickBooks, it's simple stuff like that. Your banking transactions, all those in your credit card transactions can be fed directly into your general ledger. Now, why on earth would you want to do data entry?

It's simple stuff and it's complicated stuff but most of these systems, by virtue of being able to talk to each other, that's principle number two, which is have forethought, don't just buy these systems and say, Yes, let's just drop it in. Because all you're doing is you're creating barriers to scale later. You also make everybody's jobs and lives easier from the beginning and it's not that expensive to put this stuff in right in the first place. It gets more expensive later on because you have cleanup.

Megan: What advice would you give to CFOs who have inherited a mess, who didn't have the luxury of foresight and being able to start from ground zero?

Anthony: [laughs] I'm reminded of somebody who came to me once and said, I've lost my business records - this was in the day and age before we had stuff online - in a fire, here's what we have left, and hands me a file box singed and smelling deeply of smoke. We had to reconstruct everything. It goes back to, at that point, how much cleanup at the transactional level you're going to have to do.

Because when you think about it, everything in accounting is built from the transaction level up and it flows through this vertebral column called the chart of accounts. I like to think of that as our spinal column because it's exactly how it functions. Everything literally hangs off of our spinal column. Everything hangs off of the accounting system, all your financial reporting, your KPIs, your metrics, and the information finance needs to make a decision. Executives need to make efficiency decisions. It all comes back to do you have the accounting set up right.

First principle is you're going to have to get your arms around the transactional level data and how clean it is. Once it's clean, then the second thing is you're going to have to set up that chart of accounts in a structure that you know is going to give you the maximum information that you're going to need to operate the company on all those levels from board reports to manager departmental reports, ultimately on up.

It sounds complex but it's not really that complex to set it up right because once it's set up right from that point, you can scale. It doesn't matter if you're running QuickBooks or NetSuite, the chart of accounts just flows and it makes those migrations easier later on because everything's already standardized upfront. To answer the question of how does that scale, you start from first principles, get your transactional level data cleaned up, and your chart of accounts.

That's pretty much how we start. Every time we start a client, the first thing we have to do is go in and clean up the general ledger. I call it reengineering the general ledger because we need to put a chart of accounts that makes sense for SaaS, that gets us our CACs, that gets us our R&D expenditures, that gets us our margins and our costs and everything else that we need in order to feed in, and the historical data to give us trends over time and comparability so that we can go in front of investors and say, this is what happened, and here's what we think is going to happen. That's pretty much most every conversation I have around VCs sooner or later is that, sooner or later, there's going to be a financial projection based on some histories that they're going to want to take a look at it and it needs to be in a language that they understand.

Megan: That's great advice. As someone who's come up through the ranks on a non-traditional path, how have you seen the CFO role evolve, and where do you think it's heading?

Anthony: I've been watching it, I guess you could say, probably from the day when I got my CMA because that's when I started to think about finance and not accounting, and decision-making. The role has gotten a lot more-- There's probably two trends. One, I think finance used to be a lot more important in the room where big buys were the day and age. Where large purchases of IT or production equipment, those kinds of things, finance needs to be in the room because a lot of times it was figuring out pricing and margins and return on stuff like that, so it's mechanical.

There wasn't as much involvement in strategic discussions. I think that evolution has happened. I think that's one. Number two is, it's way more chief cook and bottle washer than I think it ever used to be. I handle now, as a CFO, especially with some of the clients, handling HR matters, handling insurance and risk mitigation matters, handling legal matters, handling equity matters. It's really even sales ops.

It's the ability to understand that the role is becoming not more strategic, but also more encompassing and broader in scope, and being able to move and talk and understand in those different areas easily and be effective in those areas, that's experiential. Then it's just a matter of that point individually, whether you've had that kind of exposure, and if not, where you need to go get it.

Megan: What do you see keeping most CFOs up at night these days?

Anthony: All I can say is I'm not in people's heads but I know what's in my head, and it's the advent of, you can call it AI or ML, or whatever you want to call it, hyper-automation. There was a study done, I want to say back around 2000, early 2000s, it was either Oxford or Cambridge, one of the UK universities, I can't remember off. I distinctly remember it, because that's when I was at St. Andrews and it was topical then, which was, they were looking at all these industries, and looking at the rates of development and technological advancement and making predictions as to which sectors of the economy would be automated out of existence by 2050, in terms of people doing them.

In the top 10 list was accounting. Finance was down, I want to say 50th or something like that, it was pretty far down the list. One, I was like, "Okay, that's a little bit reassuring if this is correct," but it made sense. I see this, and that's part of how we built SaaS Gurus, in a way, it was also based on this insight that accounting is subject to automation because it's very rules-based, it's very logical. It's not AI, but automation is increasing because it's easy to standardize stuff.

If it's something that keeps you up at night, which is if my job is mostly in accounting and there's a lot of AI tools that are being developed out there to take what I do say as just AP or an expense reporting manager, or somebody further on down on up to that controller level, is AI able to produce an actual versus budget report with comments? Probably at some point. I don't see why not. Would that keep you awake? I guess some of that depends on how set you are in staying in accounting, or how much you recognize that as a risk. That's in a way I look at that as opportunity. I don't look upon it as something to be afraid of.

I'd say at first, I probably was, I was like, "I'll go. My money is going to be based on accounting, and it's going to be AI'd, how am I setting myself up for the future for success? That you could say, kept me up at night. I think from a practical day-to-day aspect, because of a client base that I work with, having enough cash to make sure that your payrolls are met, that can keep you up at night. That's a very human and real thing to live. If you see a company that's running low on cash, or you have projections that are based on a certain sales volume and you're just not hitting them and you have to start redoing the projections, and then suddenly, you need cash sooner than you thought. Those are very practical day-to-day things that can keep you up at night if you let it.

Megan: I agree with your comment about automating and accounting and opportunities coming from that. I think a lot of people are afraid, but at the end of the day, in many ways, it's getting rid of the transactional components that nobody really wants to do anyway.

Anthony: Exactly. It's that kind of stuff. You're right. I think that leads back to that article, it's like that is an accounting function. Their contention was, half of all American jobs would be automated out of existence by 2050 from that starting point in 2000. It's like, that's a fairly aggressive turnover rate, but it's not that surprising. As a matter of fact, I expect it probably will be faster. I think AI is going to be a snowball type of thing that it's like, once you build one of them, then others, so.

There are a lot of complexity around it. I think there's a lot of hype of what it can do. I think we're still in the early days, but it's like, I look back on from when I started accounting, from that very first accounting class that I took in graduate school way back to now, and realize that I'm living in the science fiction that I used to read about.

Megan: I think-- [crosstalk] I'm sorry, go ahead.

Anthony: Just bluntly. They're not pinned to our chest, and you don't touch it and say, "[unintelligible 00:36:20] enterprise," but that cell phone you're carrying, you can reach anybody on the planet, anywhere at any time of day now, pretty much. Spark would ask the computer a question, and the computer would say 24 hours or whatever that mechanical voice. Well, now, it's 24 milliseconds, thank you, Google.

The way I look at it, I'm living in the age of science fiction I used to read about and I think it sneaks up on you, you don't realize it. Well, that's what I don't want to have happen to people who are relying on a certain industry that's under a particular thread, if you will, of automation. I watched it happen in manufacturing. When I first started at that scaling plant, the one that we had scaled from $5 million to $50 million, the ratio of labor, as a percentage of our cost of sales, dropped dramatically during that scaling period. We didn't add more people to do that, we added more machines to do what people used to do.

Megan: It's a scary thought to think 50% of jobs are going to be automated. What are people going to do? I feel like, as those jobs disappear, new jobs will be created that we can't even imagine today, so.

Anthony: Well, and I think COVID has helped us with that, strangely enough. Because by dispersing the workforce so that you don't have to go to a particular area to work in that industry anymore. In some cases, yes, things that involve direct human contact, that's not unfortunate, it's great. That's not going to change, but it also, unfortunately, puts the people who have to deliver it into a, if you're going to stay in this industry, you're going to have to work with us, but for people who are in the information knowledge industry.

I can work with a client in the UK, I can work with a client in China, I can work anywhere in the world timezones-allowing, of course, and crazy hours for phone calls and Zoom calls. It's truly become a global workforce and COVID accelerated that. Your ability to branch out and explore and do new and different things other than what you're doing is at your fingertips.

I think you can face the threat one of two ways. I go back to say, I think everything I needed to know in business, I learned in the science fiction book, in Dune, the book Dune, which is the movie that just famously came out, as you know, the mantra against fear, fear is the mind-killer. You can be paralyzed by the fear in terms of, "Oh, crap, that's coming my way," or you can say, "Look, I need to figure out a way to deal with that," and start looking outside of what you're doing.

I saw that coming a long time ago for any industry being science fiction. There was one book called The Humanoid Touch, which was scary at the time, and still is scary in its own right, which is, AI had so taken over everything that humans had nothing to do. They couldn't play music better than the AIs because they played it perfectly, and they couldn't drive cars better than the AIs because they did it perfectly, and they couldn't make parts better. It was all like there was nothing for humans to do because the AIs were all doing it perfectly.

That's an extreme example taken-- That's what science fiction does. It takes a premise and takes it to an extreme, but thinking about that, that was an early book and I was like, "Oh, [unintelligible 00:39:56] man, I better make sure that doesn't happen to me." I think having a science fiction mindset [chuckles] is maybe a little helpful if you're in accounting because you're living in a world now that's-- was science fiction not more than 20 or 30 years ago and it's only going to continue. It's not going to slow down.

Megan: I have one last question for you. I saw in your profile that you are a certified yoga instructor. I'm just wondering what inspired that and what yoga does for you personally.

Anthony: What inspired that was a realization that my wife and I had both become couch potatoes and we needed to do something other than our work, and this was-- I had been pretty much home-based for a long-- better amount of 20 years, but my wife wasn't working. Anyway, we decided that one Christmas we wanted to improve our physical well-being. I wanted to do something that both of us could do, that neither one of us had done before.

She said, "Oh, okay, what about this?" She pointed out to yoga. The first thing that came to my mind was living on granola and water for the rest of my life. I'm like, "I don't want that." She said, "Well, that's not what it is." "Of course, that's not what it is. You're laughing." We went to this yoga studio and it was rather unique because it had ropes anchored in the ceiling to help you with the poses and also to introduce poses that apparently, and I didn't know this at the time, I was like, this was my first yoga experience, so what do I know from [unintelligible 00:41:33]?

It's like, this is what yoga is, cool. It has ropes. It allows you to use your climbing muscles. That was a unique yoga style that we just fell in love with and it really helped us, physically as well as mentally. Yoga is as much a mental and emotional practice as it is a physical one. That's what yog is, is union of mind, body, and spirit, and so we decided to become instructors. We went through the instructor training and became instructors and I taught for many years and loved it and still do practice it.

COVID pretty much killed our studio. You kind of need the ropes and the ceiling, that's part of the style. Most people don't really have ropes anchored in their ceiling at home, so a lot of the really cool stuff that we could do was not available to us. It's taught remotely now, one of the teachers continues to do it. I do it on my own. That's something that I don't think I'll ever stop doing. It's great to wake up early in the morning and get yourself energized with that and then you're off and running for the day.

I think that's the other thing that COVID has allowed us to do is that I don't have to go to the studio to do my yoga. I can do it at home, like in a 10-minute break while I'm working and it helps my productivity. I think we're seeing the beginning of another science fiction revolution where it's work around the clock because it's a 24-hour globe and a 24-hour workforce, and people are doing more what they enjoy and less what they have to. That's what I hope anyway.

Megan: Yes. That's very interesting. I can't wait to see where we are five years from now and everything that's come between now and then. Anthony, thank you so much for being my guest today.

Anthony: Thank you. I really appreciate it.

Megan: Yes. I really enjoyed speaking with you and hearing about your experiences and all the resulting insights, and I wish you all the best. To all of our listeners, please tune in next week, and until then, take care.

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