High-Performance Finance Leadership

April 25, 2024 Mimi Torrington

finance director congratulating high-performing startup team during a meeting

People expect CFOs to be masters of everything, not just finance. Strategy, technology, marketing, or customer engagement, a financial leader truly has to get a strong grasp on every aspect of a business. Impossible, some might say. But not for Daniel Welch, who joined us in this episode of CFO Weekly to share his personal performance as an executive as well as his financial strategy for successfully scaling high-growth startups.

Daniel has a deep passion for developing and enhancing value in consumer-focused companies with standout products and strong customer connections. Before Kate Farms, he served as the CFO of Oura Health, led corporate finance and development at Sonos, and has a background in investment banking.

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Megan - 00:00:18: Today, my guest is Daniel Welch, CFO of Kate Farms. Daniel joined Kate Farms as CFO in 2023. Prior to joining Kate Farms, Daniel served as CFO of Oura Health, makers of the Oura Ring. Daniel joined Oura in 2020 and was responsible for driving all aspects of the company's financial activities, including financial reporting, planning, treasury, investor relations, and corporate strategy. Before Oura, Daniel led the corporate finance team at Sonos Inc., where he was responsible for corporate development, strategy, and treasury functions. He helped launch the company's corporate development and investor relations functions at IPO, and led multiple acquisitions and investments on behalf of the company. Before Sonos, he was a vice president in the investment banking group at Morgan Stanley. Over an 11-year career in investment banking, Daniel guided many companies through mergers, acquisitions, capital raising activities, and IPOs. He holds a BBA in finance from Baylor University. Daniel has had a lifelong passion for health and wellness and a continuous desire to enable people to live healthy, active lives through innovative products and solutions. Daniel, it's a pleasure to have you on this episode of CFO Weekly.

Daniel - 00:02:09: Thank you, Megan. It's great to be on.

Megan - 00:02:11: Yeah, today our topic is twofold. We'll be discussing Personiv performance as an executive, as well as successfully scaling high growth businesses. And I'm looking forward to learning about you and learning from your experiences. So let's get started.

Daniel - 00:02:26: Sounds great.

Megan - 00:02:27: First of all, given your diverse background and extensive experience as a finance executive, I'm curious to know, A, what inspired you to pursue a career in finance? And then B, give us just a brief overview of your journey to date and how that has shaped your approach to leadership and personal performance.

Daniel - 00:02:48: Sure. So maybe to answer the first question first, what originally attracted me to a career in finance? I really got interested in finance in college. I kind of went to college thinking that finance might be an interesting topic to study, but really didn't have much of a perspective on sort of what was involved in that. When I arrived at college, I started taking business classes and found business in general to be very interesting. And then when it came time to declare a major, I ultimately landed on finance because I was really sort of intrigued by how finance was, it sort of had this theoretical aspect to it. There's more uncertainty in finance. And to me, that was really appealing. Areas with uncertainty are ultimately challenging. And that's where over time, experience and judgment can become more important and really influence the trajectory and the success of someone's finance career. So you had topics like accounting, which were much more cut and dry. They're very specific. They're rules to follow, everything kind of fits in a neat little box. You had areas like marketing, which seemed a little bit too creative for me, although I did have kind of a creativity background being a musician. And finance just seemed like this really cool merging of theoretical concepts. There's a little bit of science to it. There's mathematics to it. And so that was just really fascinating to me. I think what's really continues to be interesting about finance is there's this continual process in the world of finance of hypothesizing, testing, learning, improving based on what you learn and sort of repeating that loop over and over again and that's always been really fascinating to me. Just trying to get better, gets smarter and learn more as my career progresses. And yeah, the more time I spend in this field, the more it is just fascinating to me, I think the sort of personal performance piece on that and sort of the shaping of my overall leadership had sort of evolved over time. Yeah, if you think about my career, my career is sort of divided into two pieces. The first being, a career that was in the investment banking industry, I worked for a few different boutiques and ultimately ended up at Morgan Stanley. I spent a total of over 11 years in investment banking, which is about, I don't know, seven years or nine years longer than most people spend in investment banking. But I thought for a time period, that was the future of my career. I was going to be a senior investment banker at Morgan Stanley. But I really had a kind of a turning point in my career. And that led me to the second phase of my career, which was getting involved in really fascinating consumer-oriented companies that had strong products, strong brand. And that second phase of my career has really been the most fascinating and the most rewarding.

Megan - 00:05:20: So what inspired you to make the leap from investment banking into the corporate world?

Daniel - 00:05:27: Yeah, it's a great question. I'm a really big believer in aligning the work that you do with your personal mission and your passion and your purpose. And I think I just hit a point in investment banking where I had sort of learned all of the things that I wanted to learn in that career and hit the realization that it wasn't truly aligned with sort of my internal purpose and what I wanted to do long term. And when you hit that realization, it becomes sort of pressing to think about what's next. And so I sort of felt this sense of urgency to look around. Oddly enough, when I was at Morgan Stanley, I wasn't covering consumer companies at all. I was actually covering energy companies, oil and gas specifically. So I had a bunch of big global clients and was flying around the globe advising on different energy infrastructure products or projects. And I really wanted to make a change. I loved consumer-focused businesses, whether it was CPG or technology. And so I took my time. I looked at a lot of different opportunities. When the right one came along, I made the switch.

Megan - 00:06:32: And in your journey as a CFO, you've undoubtedly come across numerous challenges. So can you share a particular instance where you faced a significant hurdle in your Personiv performance and how you overcame it to achieve success?

Daniel - 00:06:47: Yeah, this is a great question. I think there were probably two major points in my career where I faced Personiv performance hurdles. I would say the first one is when I transitioned out of investment banking into my first sort of quote unquote corporate role, as we would have called it on the investment banking side or industry role. Investment banking as a career is a highly client focused role. Investment banking is essentially a very high value client service that you're offering and clients are often paying millions or tens of millions of dollars for your advice. And so in that environment, your email inbox is basically your to do list. And any emails that are coming to you basically are essentially from either senior bankers within the company or within the firm, or from your clients that you're doing work for. And so you really get used to this very task oriented, high output oriented environment. When I left and joined the corporate world, I was actually hired. So my first role in the corporate world, I was in corporate finance group at Sonos, and I joined Sonos right before their IPO. And I came in really with a focus on building out some very specific functions of the company, sort of after that IPO was to happen. So I had a hand in building out all of the investor relations, the corporate development, kind of corporate strategy practices. And when I arrived there, I had sort of a wide ranging set of responsibilities. And a lot of legacy stuff kind of got thrown at me. And I found myself getting buried in emails and approvals and meetings and HR stuff. And there were dozens of Slack channels to keep up with. And I was just completely astounded by how much of the day could be spent just doing busy work. And that is not at all what I was used to in banking, which was, as I said, very highly output driven, task oriented. And so I kind of had this realization that I could spend my entire day being very busy, but not actually really accomplishing anything. And so I kind of had to figure out how to redesign the way that I worked in this very, very different environment. The author Cal Newport, he wrote a couple of really fascinating books about work and productivity. His most recent one is called Slow Productivity. He coined a really good term for it, and he calls it pseudo productivity. And it's sort of this idea that all the activity that we do at work, whether it's the emails or the Slack messages or the meetings, they give the appearance of productivity because there's a lot of activity associated with them. But they don't actually really produce anything, at least not most of the time. And so I think I put a LinkedIn post out about this recently, maybe a couple weeks ago, and the headline was something like, busyness does not always equal productivity. And true productivity today actually looks like the opposite of some of those things, the busy work of emails and meetings and stuff, sometimes you have to just figure out how to timebox that stuff and really focus on the things that drive value. That was probably the first big hurdle. And then the second hurdle was when I took on my first CFO role. So my first CFO role was with a company called Oura. They're the makers of the Oura ring. I spent three years at that company, really scaling it. I think it did about 5x the amount of revenue from the time I started to the time I left. And in that role, you're suddenly responsible for a lot more things, right? So that busyness versus productivity trade-off carries a lot higher consequences. And so growth company CFOs, as you probably know, are still very much doers. So I didn't really have the luxury of hiring an army of expert lieutenants who could execute on all the different objectives that we needed to accomplish at any given time. And on top of that, I'm now the one that's responsible for setting financial and strategic priorities for an entire organization. So I did a lot of searching and discovered that there's no comprehensive user's manual for the growth company CFO. But there's a lot of resources out there, no one's written a comprehensive book on it. So I spent a lot of time scouring the web, podcasts, reading books, Substacks, all that sort of sources to try to piece together a framework for how to operate. And so that's a continuing journey. And I'm always learning and trying to improve. And in that process, I've covered everything from leadership to how to allocate capital to tactical things like how to manage your inbox and your communication. So those are probably two really big hurdles in my career that I had to overcome is just learning how to work in a completely different way, to make sure that I was focused on productivity and not sort of getting caught up in this sort of day to day things that can be distractions.

Megan - 00:10:55: I'm just curious, but as a CFO or coming into the role of a CFO, how is it that you immerse yourself in the business? How do you get to know what it is the business actually does and who it does it for?

Daniel - 00:11:10: Yeah, that's a great question. And in my first CFO role, we were in a completely distributed environment. So this is at the peak of COVID. There was no in-office meetings. So it's really hard to get that sort of osmosis learning that you get from sitting alongside your colleagues, being in person in meetings, water cooler chat, all of that. I think you have to be really deliberate about building and making connections within the organization. I think it's really easy for some executives to become siloed off and sort of work very independently. And there's certainly times for that. And sometimes you need to be able to silo yourself off and make independent decisions. But I think it's equally important to understand when you need to be deliberate about making connections across the organization. And that means connecting with folks that are your peers. So whether it's your chief marketing officer or your chief people officer or chief operations officer to really dig into and understand the business. It also means going down in the organization and talking to folks at different levels of seniority and understanding what their day-to-day is. And what's fascinating is when you do that, you hear a lot of feedback. Not only do you gain knowledge about how the organization works, but a lot of times you get really interesting ideas and feedback on how to improve things, where there might be pockets of efficiency that can be realized, savings or margin improvements. So yeah, I think it's really about just being deliberate. And you have to take that initiative and not wait for folks to come tell you because if you do that, you'll never fully understand how things work. You really have to go in there and ask the questions yourself and find the right people.

Megan - 00:12:50: And many executives, including yourself, are navigating the complexities of Personiv performance while performing demanding roles. So what habits or rituals have you adopted to consistently maintain high levels of performance?

Daniel - 00:13:04: Yeah, I think number one for me is having your personal purpose connected to the mission of a company. I think that's a must. I realize that not everyone working at different companies and in different roles can achieve that. But I do believe that if there isn't a sense of purpose behind what you do, it'll be really hard to sustain high performance over a long period of time. And yeah, sure, you can sustain levels of high performance for short bursts or maybe even for a few years. But if it's not infused with that sense of purpose and it's not aligned to your personal mission and you're not getting value out of the value that you're contributing to an organization, it's just not going to be sustainable for a long period of time. And I would say purpose is really about finding that fit where what you do delivers value to the world. It delivers value to the organization. It's also something that you're good at. And when you have all those pieces in place, that sort of feedback loop just feels you like nothing else. It creates a sense of motivation that is really tough to find if you're trying to find that motivation externally. So it's really about finding that purpose and getting that organic motivation. The second thing is I'm a big believer in physical fitness. You can definitely be successful without being fit. But there's really just something about building a solid base of physical fitness that sets you up for success. Physical fitness builds mental stamina. It sets a higher pain tolerance for individuals. It makes you more patient. And so to me, it's a must-have. Every day, I've got to be active. You know, it's funny. Physical pain kind of has this tendency or physical pain that comes from physical activity kind of has this tendency of putting mental pain or mental stress into real perspective. So the stress of bench pressing a few hundred pounds or trying to row 500 meters in a minute and a half sort of makes that psychological stress of work just seem minuscule by comparison. And so try to carve out time every single day to be physically active. Some days that might just be taking a walk or going for a short jog. And other days it might be something that's a bit more involved. And then maybe more on the sort of work-focused side of it. I am a big believer in having a daily practice of or maybe having a broader practice of identifying the sort of one to two highest priority things that you're focused on. And this is kind of an old Peter Drucker truism that executives are only really effective when they can apply all of their focus to one or two high priority, high value sort of needle moving activities and then breaking that down and having a daily practice of writing down the sort of three to four actions that I need to take that day to make progress on those highest priority focus areas. And if you don't do that, these other sort of pseudo priorities will manage your schedule for you and you'll get sabotaged by that idea of pseudo productivity that I was talking about earlier. So really critical to obsess about the output of what you're trying to get done and taking actions that drive toward that every single day. Now, of course, not every single day is a victory. I don't cross off everything on that list, but anything that's undone of that on that day just sort of finds its way onto the next day's list.

Megan - 00:16:11: And as a CFO, you obviously play a pivotal role in driving the financial strategy of a company. So how do you balance the demands of strategic decision making with day-to-day responsibilities, ensuring both short-term and long-term goals are met effectively?

Daniel - 00:16:28: Yeah, I think the best thing that a leader can do is, first of all, set really clear objectives for the organization. And a CFO, I think, has a really instrumental role in that, working with the CEO. And then that's not enough, right? The next part is you have to clearly lay out the roadmap of how to get there. And I think the value of a leader is in translating that outcome into more actionable, digestible, understandable set of steps for the organization to get where it needs to go. And I think a lot of leaders fail here. They set the objective, whether those are financial targets or maybe a product development timeline, but they don't excel in articulating for the organization exactly how those goals are going to be achieved. And long-term goals have to be broken down into a series of short-term, much more actionable goals. And it's really up to the leader to sort of take the guesswork out of that for the team. But so often you see leaders just sort of set the target and then crack the whip and expect the organization to find their way on their own. I think it was Bob Iger in his book said something like, you can do a lot for the morale of your people by taking the guesswork out of their day-to-day work. And it's so true because nothing kills morale like uncertainty or confusion in the day-to-day execution. So I think that's really important to do. And often as a leader, it may not actually be in your realm of expertise to break down goals into their tactical actions. Good example for me is I don't have an accounting background, but I think in those particular circumstances, it's critical to have really strong subject matter experts on your leadership team who can translate those broader objectives into day-to-day tasks for the team based on their own technical expertise. And so I rely very heavily on my controller who has an extensive background in accounting and can sort of help me, and those areas where I may not be as much of a technical subject matter expert.

Megan - 00:18:19: And let's talk about scaling high growth businesses. In your experience, what are some of the key strategies that you've employed to successfully scale companies, particularly in the consumer sector?

Daniel - 00:18:32: Yeah, the consumer sector is difficult. Scaling consumer-focused businesses can be really hard. You're basically trying to win a popularity contest, and that contest can be difficult and expensive. And as a result, there's been a lot of failure in the consumer space, whether it's technology or CPG or beauty, any of those sort of consumer-facing businesses have a really high hurdle to clear. I think really, first and foremost, it starts success for a high-growth, consumer-facing business starts with the product. You've got to have a product that's innovative, it's unique, it's a must-have product, pure and simple. There's really no way around it. Fortunately, I've been able to be a part of some organizations that have really strong products. So for Sonos, it was connecting high-quality speakers throughout your home using Wi-Fi, and that was a novel concept at the time that was introduced, and they continue to be the leader at that space. At Oura it was the most accurate health tracker in a easy-to-wear, better-looking form factor. And then at Kate Farms, where I'm at, now it's about significantly healthier, higher-quality nutrition for people who have nutritional needs. And in that market, specifically the plant-based medical market, we are the market leader in those sort of hospitals and home care organizations. So really, you have to leave with a product. You've got to have a high-quality product. You need customers that are really big advocates for the product, which drives a lot of organic growth so that you don't have to go out and pay for growth. Second, I think it's critical, critical to focus on unit economics and ROI in this sort of era that we're coming out of where we had a lot of excessive capital funding for high-growth businesses. So many companies went to market with products that were just simply upside down in the margin structure. And the thought was always that, oh, we'll have the opportunity to increase those margins once we achieve scale. And that can be true to some degree, but it's really critical to get that margin structure at the product level right out of the gate, because there will always be forces, whether they're competitive or input costs that put pressure on those margins. And so making sure that the economics make sense from day one is just really critical. I mentioned ROI, and ROI can be kind of a tricky concept because going back to the discussion on finance and theoretical frameworks, there's a lot of different ways to do it. It's a total garbage in, garbage out formula. But if you, I think it's critical, you've got to have a framework for this internally. You need to have, a framework for how to evaluate new products, new markets, new channels against your cost of capital. And you've got to build some buffer in there to account for all of the variability and the theoreticalness of that overall framework to make sure that every decision that's being made is driving value for all the stakeholders that are involved in the organization. And I would say probably the third thing would be having access to liquidity and having a sort of fortress balance sheet, as the term goes. And that just means having ample cash on hand and having ready access to liquidity in enough amount to weather any sort of unexpected storm, whether it's a macroeconomic storm or just a long period of time that it takes to get to a point where a business is much more capital stable.

Megan - 00:21:42: Let's switch gears and talk about technology. But technology is obviously playing a huge part in finance and accounting these days. So how are you leveraging innovative financial tools and technologies to optimize processes and enhance decision making?

Daniel - 00:21:58: Yeah, we spent a lot of time talking about this at Kate Farms in my current role. I think there's sort of this misnomer that smaller, more agile, high growth companies are leveraging all the latest and greatest technology. But the reality is in all three of the kind of high growth consumer facing organizations I've been a part of, I would say we were still on sort of the mid to late stage of adapting some technologies. So I think that technology becomes a really big focus, especially when you're trying to do more with less. And I think we'll see companies really focused on it going forward because of all the pressure and the high expectations from shareholders on delivering better margins and better capital efficiency. But I would say for us, technology is really about getting access to data faster or speeding up an existing process. I'm of the belief that there's probably three, maybe five core KPIs that business leaders should be paying attention to consistently. I don't need thousands of data points. I don't need the data cut dozens of different ways. And I think it's tempting for a lot of companies to get enamored with a large quantity of data or what the systems and tools can spit out. But as the saying goes, a wealth of information creates a poverty of attention. So I'm a big believer of sort of narrowing down on what those really core, high level, indicative KPIs are for the business and monitoring those on as fast of a basis as possible. And then when one of those KPIs starts to flag something that looks a little bit off, that's when you can go dig. So when I think about technology, it's how do I get that data faster? How do I dig for that data faster if I need to? And then how do we speed up an existing process so that we can enable the business to get data faster, make decisions much faster? So, yeah, our approach to technology is definitely focused on speed and quality of data. For us, more specifically, that's about closing the books faster, giving budget owners access to real-time budgeting data, real-time production of our core KPIs and making sure that we get that data as quickly as possible. So that we can reorient if we need to.

Megan - 00:23:59: I'm just curious, did that involve implementing an ERP somewhere along the way?

Daniel - 00:24:04: Yeah. Fortunately, we implemented an ERP system before I arrived at Kate Farms, although ERPs are ongoing development projects.

Megan - 00:24:13: Yeah.

Daniel - 00:24:14: Yeah, I think so. I think the sooner that companies can get on a high quality ERP, the better. I think it's a tough decision to make, but I've kind of seen it both ways in my prior organizations. I've seen it where implementing an Oracle or an SAP or an NetSuite later in the process is much more painful. It's more expensive versus earlier in the process where the cost might appear imprudent at the time, especially given the scale of the company. But anytime I've seen a company take that action earlier rather than later, it's actually really paid off in the long run. So definitely my advice is tackle the ERP implementation as soon as you can.

Megan - 00:24:52: And mentorship is a significant aspect of leadership. So can you elaborate for us on your role as a mentor to startup companies and maybe share some of the insights into the critical lessons you impart to these emerging entrepreneurs.

Daniel - 00:25:08: I've been advising early stage companies and their founders, both sort of formally and informally in various capacities for several years. Typically, I'm working directly with founders on a number of things, but often we end up focusing on a lot of the same things that we're talking about here today, right? So how do you scale business in a sustainable manner, preserving margins, growing in consumer facing channels where it can be very expensive to gain visibility and gain awareness? So really helping them think through different go to market strategies, what channels to focus on. And I even venture a little bit into product development focus, especially as it pertains to maximizing value. A lot of startup companies are founded by engineers or other sort of product oriented experts, and they don't always necessarily have the financial background or sort of that shareholder mindset of how do I orient the company or how do I design the product development cycle? To maximize value and to make effective use of the allocation of our capital. And so that's really where I spend a lot of time with founders. And then another one is identifying and finding the right capital partners and having the right capital partner, having the right person on your board can really open doors for a company and make a big difference in the long-term trajectory of the company. And likewise, having the wrong capital partner can really be a stumbling block for growth or for the strategy of the company. So spending time identifying the right folks and bringing the right folks to the table, I think is really important. I think the biggest thing, though, is just focus. And we've talked about this, but focusing on the right things, avoiding distractions. It's really easy as a startup company, especially when you have some new product or technology that has seemingly good product market fit to say, oh, wow, there's a million different things we can do with this new technology. There's a million different derivatives we can make of this product. But it's really about identifying the things that are truly important that are actually going to drive value, clearing the desk of all the things that look important, but aren't going to actually produce value, or maybe just sequencing those things into the order of what's going to produce the most value first and encouraging founders and high growth companies to focus on those things one at a time.

Megan - 00:27:12: And you mentioned that your role today is CFO at Kate Farms. And while there, you've been instrumental in driving the company's growth trajectory. So can you walk us through a key initiative or strategic decision that you believe significantly contributed to the success in that plant-based nutrition market?

Daniel - 00:27:33: Yeah, I think there's two big strategic decisions, or maybe one big strategic decision that was made actually before I joined the company. And then maybe not quite as large, but a very important strategic decision that we've made today while I have been a part of Kate Farms. And the first one was, like I said, this happened prior to my arrival, but it's one that really set us up for the success that we have today and really have to credit our CEO, Brett Matthews, who invested in the company early on, wasn't the original founder, but was almost like a founder. So when Kate Farms first started out, they were making these meal replacement shakes that were 100% USDA organic, plant-based, no common allergens, and obviously being plant-based, no milk-based proteins. And some of those things are not well tolerated by people, especially people who have medical needs. But they were selling these products in retail. So you can imagine going to your local health food store, and that's where you would see Kate Farms products on the shelf next to every other plant-based ready-to-drink option that's on the shelf and really facing margin pressure. And like I said, going back to scaling a consumer-facing business is a very expensive proposition in a lot of ways. And so Brett's sort of foresight was, let's, this is a product that's designed for people who have medical needs. So let's shut down this retail business and focus specifically on medical markets and medical channels. And so they went through that long and painful process of getting healthcare reimbursement approved. So our products are approved for reimbursement for, through Medicare, Medicaid, we're on a majority of the state WIC programs, and then private health insurers as well. And in so doing, really built a unique go-to-market model that none of the other sort of plant-based ready-to-drink businesses were doing at the time. And that's really what has set the business up for success today. I like to joke with people that Kate Farms is one of the biggest consumer brands you've probably never heard of, because the majority of our revenue comes from the medical channel. So it's hospitals, it's home care, post-acute care organizations. And then we have a sizable portion of our business that's direct consumer e-commerce. And so that's usually folks that are paying out of pocket or they're buying our kind of more consumer-facing products, which is our adult and kids' nutrition shakes. And those are a little bit more oriented toward the general population. You don't need a prescription to be on them, or you don't necessarily need a doctor recommendation. But a lot of our customers and patients are coming to us because of that healthcare provider recommendation. And over this time, we've built this credibility in the medical space. And that led to us getting this designation as the number one recommended plant-based brand by healthcare providers. And so that sort of tees up the second strategic decision that we've made. And it's really about that re-entry into retail. So we're available in something like 99% of hospitals in the United States. And we're available online on katefarms.com and Amazon and some of these other online marketplaces. But you will not find us in most grocery stores or drugstores. And the reason for that was intentional, obviously. But to grow this business to where we want it to be, eventually, we will need to be in retail. And so the strategic decision there was to really slow walk that process. And we started with a test at a regional grocery store in Texas called HEB. So we're in over 230 of their stores. And we are really testing, learning, iterating to get it right before we roll out more broadly across the country. And so it's really about leveraging that credibility that we've built as the number one recommended plant-based brand on the medical side to drive that pull through for the customer and the retail store. And so we're going to take our time, we're going to get it, right. I know that for a lot of CPG companies, retail distribution is existential, you have to get it. You got to get out there and a lot of them, get squeezed on the margin side. And so we're really trying to build this business model in the right way, so that it leverages that credibility we've built on the medical side and will ultimately be successful in all the channels where we sell.

Megan - 00:31:25: I'm just curious, how is it that you chose HEB? As someone who lives in Texas, I love that grocery store.

Daniel - 00:31:32: Yeah. So I live in Santa Barbara, California now where Kate Farms is headquartered, but I grew up in Texas as well. I grew up in the Austin area. HEB was a wonderful part of my childhood and upbringing. It's such a great organization. Our CEO, Brett, had some connection to the senior team there. HEB is a fantastic and flexible organization and were willing to work with us on the test. And so it was sort of a natural partnership. And we entered into that late last year and went live in a majority of their stores kind of late December, early January. And we're looking at the data that's coming in and we're progressively building market share. So it's headed in the right direction.

Megan - 00:32:08: And what advice would you offer to aspiring CFOs who are looking to excel in their careers and make meaningful impacts? You mentioned loving what you do, but is there anything else?

Daniel - 00:32:19: Yeah, maybe keying off that loving what you do, it's the number one thing is choosing where you work, right? I think that that's maybe something we don't talk about a lot. Sometimes people find themselves in situations where they don't have that purpose and that alignment. But I think that having purpose and alignment is critical for long term career success and to your own mental health. And so, you know, making the right decision on the place you want to work is critical. That comes down to, you know, what's the quality of the company's product and the trajectory of that company. I think that's a really critical one. If you can go to work for a company that has the right mission and the right values and doing the right things, but maybe they don't have that great of a product. And ultimately, your success as a finance leader or an aspiring finance leader is going to be tied to the trajectory of that company's product and where they're going. From time to time, I talk to folks who are contemplating a career change, especially in this sort of finance area. And I always tell people, take their time, don't jump on the first thing that comes along. Really seek out that company and that culture that's producing great things is giong to provide you opportunities for growth, and I think for finance leaders in particular, I would say getting exposure to as many different areas within the finance organization as possible is really essential. And I think typically what you see in finance roles is a bifurcation of the different people's experience, right? So you have very accounting oriented folks are very FP&A oriented folks, or maybe you have some one or two that are have more of a corporate finance background. So capital raising, M&A corporate development, those types of skills. And I think there's a lot of value if you're an aspiring finance leader, or you want to be a CFO at some point to gaining exposure to as many of those different areas as possible. And then of course, when you become CFO, you have to start learning about all the other areas of the business because you're ultimately responsible for understanding how they work and optimizing them and everything. So really, it's a learning process. But I think getting a diversity of experience as early as possible is really critical. And that goes back to what I said earlier, which is, choosing where to work is important because some companies are really good about giving people exposure to those different areas, whether they have like a rotational program or something like that. And some companies are much more siloed. And it's like, hey, you have this job, and that's your single career track. There's a lot of opportunity to gain a lot of exposure to different areas in startups and smaller growth organizations. But that obviously carries more risk. And that's where you have to go back and assess the quality of the company and the quality of the product.

Megan - 00:34:43: That's really insightful. Thank you for sharing that. Last question, but what emerging trends do you foresee shaping the future of financial leadership?

Daniel - 00:34:53: Yeah, this is a good question. I think about this a lot. I think probably one of the things that I see increasingly common is that, especially in higher growth organizations, CFOs and finance leaders are increasingly needing to partner closely with the marketing or growth parts of the organization. And maybe in previous times, CFOs were a little bit more confined to the lanes of finance and accounting and maybe setting financial objectives for the organization and leaving it at that. There's really been a high value placed on the partnership that the finance organization has with marketing and with growth, whether it's you have a chief marketing officer or a chief commercial officer, that relationship has become really important. And that's especially important for consumer companies, because like I said, it can be very expensive to scale a consumer company. And so there will always be this tension in every company where marketing wants to spend money and finance wants to rein them in. But I think it's really important that CFOs and the finance organization dig in with the marketing team to really understand what drives incremental business and to really understand how to measure the effectiveness of the marketing activities that you're doing. So that's a big one. I think, we'll see more of that, will take on more important, especially in the sort of consumer facing consumer technology CPG, and those different areas. I think, also finance leaders have, hopefully learned a number of lessons from the sort of exuberance of the 2019 to 2022 era of essentially free capital. And that is that growth is important, but margins still matter. And every company has to produce cashflow at some point. And the faster you can get there, the stronger the business is going to be. And really, that's the key to building a sustainable company that's going to be around for decades or even centuries. And so increasing vigilance, never disengaging your sort of system to thinking and falling victim to crowd wisdom, I think is really important. And so I think that we'll see a generation of CFOs, especially from sort of my generation and younger generations that have learned some of those lessons from that era and are focused on building sustainable companies that are still growing, but maybe not growing at the same rate because they know they need to do so sustainably. I would say some of the trends I see in my particular area in my industry, which is sort of that health and wellness space, is that consumers are really taking charge of their own health outcomes. And I think that's a really important one for companies that are in this space and for finance leaders to really understand. Consumers are empowered by new sources of knowledge and data about themselves. They're taking control of their health. They're getting educated. We've seen the rise of health influencers and social media. We've also seen the rise of a lot of health misinformation. There's a lot of that out there. But consumers, by and large, have a lot more tools at their disposal, whether it's through wearables or apps or other information. Sources to really take control of their health. And so I think that's a big trend that we're seeing. I think more specifically in sort of the health and wellness food products, customers are really focused on ingredient quality. So they want to see products that have high quality ingredients, mostly pronounceable ingredients. I know some vitamins have some kind of scary scientific sounding names, but for the most part, they want to know what's in their products. There's a lot of products coming out with functional ingredients. And I think there's a healthy amount of consumer skepticism around some of those things. So they'll really have to prove that out. But really, we'll see a lot of focus from consumers on the quality of the products they're consuming and even a willingness to spend a little bit more for the right products.

Megan - 00:38:25: Daniel, thank you so much for being my guest today.

Daniel - 00:38:27: Absolutely. This has been fun.

Megan - 00:38:29: Yeah, I really enjoyed speaking with you. And thanks for finding the time to be here with us today. I wish you and Kate Farms all the best.

Daniel - 00:38:37: Thank you so much, Megan.

Megan - 00:38:38: And to our listeners, please tune in next week. And until then, take care.


In this episode, we discuss:

  • How to maintain high levels of performance in finance leadership

  • Key strategies for scaling high-growth businesses

  • The importance of leveraging technology in high-growth companies

  • Building efficiency in finance teams

Key Takeaways:

Financial Strategies & Productivity Hacks for Scaling Startups

Transitioning from the fast-paced, task-driven investment banking to a corporate role at Sonos, Daniel found the environment filled with what seemed like endless emails, meetings, and approvals that contributed more to busyness than actual productivity. Inspired by Cal Newport's concept of pseudo-productivity, he realized the need to redesign his approach to work, focusing on value-driven tasks over busy work. This insight proved key when he became CFO at Oura, where he scaled the company significantly.

Quote mastering productivity

“I'm a big believer in aligning the work that you do with your personal mission, your passion, and your purpose.” Welch claims. - 06:32 - 10:55

Deliberate Connection and Purposeful Performance

Stepping into his first CFO role during COVID-19 taught Daniel the importance of practice engagement to deeply understand the business. Without the casual learning opportunities an office provides, he highlights deliberately building connections across all levels of the organization. Additionally, he stresses the significance of aligning personal purpose with the company's mission to sustain high performance.

daniel welch kate farms CFO Quote

“Number one, for me, is having your personal purpose connected to the mission of a company.” According to Welch. - 10:55 - 16:10

Scaling High-Growth Startups with the Right Financial Strategy

Succeeding in scaling consumer-focused businesses requires an outstanding, innovative, unique, and essential product. Daniel mentioned examples from his career where standout products, like Sonos’ WiFi-connected speakers, Oura's aesthetically pleasing health trackers, and Kate Farms' plant-based nutrition solutions, led market categories by delivering distinct value. Additionally, Daniel stresses the importance of solid unit economics and ROI from the start, as well as preparing for financial unpredictability with enough liquidity and a robust balance sheet.

Quote scaling high growth startups with a good financial strategy

As Welch said, “Scaling consumer-focused businesses can be really hard. You're basically trying to win a popularity contest and that contest can be difficult and expensive.” - 18:19 - 21:41

Harnessing Technology to Enhance Efficiency and Decision-Making

While it's to think that agile, high-growth companies like Kate Farms are on the cutting edge of adopting every new tech tool, they're actually more measured, especially regarding data. Instead of being overwhelmed by the sheer volume of data, the company focuses on a few core KPIs that truly drive the business forward. Daniel also mentions the importance of getting an ERP system in place sooner rather than later benefits in the long term, despite the initial costs.

harnessing technology to enhance financial strategy Quote

“Our approach to tech technology is focused on speed and quality of data.” Welch said. - 21:42 - 24:52

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