EP 011 - The Dispassionate CFO with Karan Bhople, CFO at strongDM

I am elated to introduce our distinguished guest, Mr. Karan Bhople, whose financial ingenuity and visionary leadership have earned him a revered spot among the Top 25 CFOs in Software for 2023 published by the well known Finance & Investing. Currently, as the Chief Financial Officer of strongDM, Karan is at the forefront of propelling the firm’s momentum and laying a robust foundation for an expanding enterprise business. His financial stewardship is not only instrumental in modernizing infrastructure access but also embodies a holistic approach to organizational excellence.

Before his remarkable journey with strongDM, Karan showcased his financial prowess as the Vice President of Finance at SentinelOne. His strategic acumen was crucial in scaling the company from a modest $15 million of annual recurring revenue to an astounding $300 million and beyond. His key role in orchestrating the company's successful IPO speaks volumes of his adeptness in navigating the complex financial landscapes of the cybersecurity domain.

Prior to these roles, Karan honed his skills at notable firms like FinancialForce (now Certinia) and Salesforce, where his financial modeling and strategic planning were instrumental in driving fiscal growth. His early career as a Financial Analyst at The Walt Disney Company laid a solid groundwork for his illustrious career trajectory.

A proud alum of Stanford University with a bachelor's degree in Chemical Engineering, Karan’s professional narrative is a blend of continuous learning, relentless pursuit of excellence, and adept financial leadership. 

As we delve into today’s discussion, we are poised to glean invaluable insights from Karan’s rich experiences and learn about the financial scaffolding that empowers tech firms to transcend conventional boundaries in this digital epoch. Please join me in extending a hearty welcome to Karan Bhople.

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Quotes:

“The CFO's job is to optimize the valuation of the company.”

“If you combine a good product in a hot market… with good operators, you may have something.”

“The criticality of the software that we were selling made the revenue streams more reliable.”

“The easiest way to get promoted is by getting your boss promoted or by helping your boss look really good.”

“There is no teacher like the market.”

“What determines the elasticity of demand in a market? And one of the factors is, is the market for a luxury or a necessity? And the more necessary it is, the more robust the revenue stream will be if you figured out the product.”

“But it is largely a relationship management job. And it's a people management job. It's public speaking, communication, presentation, being able to read what the people across from you want and then figuring out how to bridge the gap.”

“Corporations are not democracies, and the CEO cannot make decisions by asking everybody what they think and asking for a show of hands and counting the votes. At the end of the day, the CEO is the ultimate executive, it is the chief executive. And the CFO's job, once a decision is made, unless there is fraud or some kind of violation of fiduciary duty going on, the CFO's job is to help the CEO execute the vision.”

“In a decent growth tech company, if you're running FP&A and strategic finance, three or four annual planning cycles is good, and then you know what the business is.

The times when that doesn't apply is if the business model, not the revenue growth, revenue growth can be really high, but if the business model is changing, if a company that is doing only software suddenly starts selling hardware as well and starts having multiple revenue streams, and the business is really changing, not in terms of pace, but in terms of complexity, then perhaps staying longer, you'll learn more.

But if it's a software company that's selling one product in one year, and then the next year it's selling two, three, four, but the business model is the same, you've learned all you need to know about the business after three or four cycles.”

“My approach has always been to do my job well so that they trust me, make sure I'm accurate on the numbers, that I know the numbers like the back of my hand, so the CEO depends on me for those, and then have a trusting relationship, and be a sounding board.”

“The CEO and the founders, and especially the head of sales and marketing, they're allowed to be passionate; they're passionate about the market, they're passionate about the product. But I've noticed that they, and especially the CEO, depend on me to be the opposite. If they are passionate, I am dispassionate. I have to be neutral. I have to be fact-based. And I will let the numbers tell the story because ultimately that's what they do.”

“You have to have a beat and raise mentality where you set an expectation that the market will accept. You then beat that expectation in the following quarter and set a new expectation that you will then beat the following quarter, and so on and so forth. And that's the game you play.” 

“If you look back and say, I grew Enterprise Value for these companies that I worked for, and I generated wealth for my colleagues and peers across these companies that I worked for, you've had a great career.”

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