Historical data no longer rules — Prior to COVID-19, relying on historical data and precedent was enough for most finance and business leaders to make reasonable predictions and decisions. However, given the likely uncertainty and volatility that will exist for years to come, solely relying on historical data would be a costly mistake. Simply put, there is no precedent to the uniqueness of our current financial situation. The best practice is to build forecasts around transactional data — what will you buy and sell in the future, how expenses will increase or decrease — and reevaluate or readjust on a consistent basis.
As part of my series about the “How to Navigate and Succeed in the Modern World of Finance”, I had the pleasure of interviewing Brandon Metcalf, founder and CEO of Place Technology, where he helps provide finance teams with the tools they need to create timely models and forecasts that lead to better business decisions and outcomes. Prior to launching Place Technology in 2018, Brandon was founder and president of Talent Rover, an operating software designed to address the most critical challenges facing the staffing and recruitment industry. Before launching an entrepreneurial-driven career, he served as senior technology director for executive search firm, CVPartners, market manager for Kelly Services and assistant vice president at Bank of America. He is also a founding partner of Blueprint Advisory.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I like to think that I am not afraid to make a bold move or statement, or take a calculated risk — it is necessary for any business leader to be successful. Before launching an entrepreneurial-driven career, I got my start with Bank of America in my early 20s where I worked my way up to assistant vice president. I then moved into the staffing and recruiting industry as a district manager for Kelly Financial, the accounting/finance division of Kelly Services and senior technology director for CVPartners, a boutique financial executive recruiting firm.
What prompted me to start my own company was my frustration with technology available for recruitment firms. In 2011, I co-founded Talent Rover with the goal of building software that helped modernize the staffing and recruiting industry. However, while I was building Talent Rover, I encountered many of the same challenges today’s business leaders face when scaling their business — difficulty forecasting cash flow, long delays in receiving financial data, and too little time to build financial scenarios with a high degree of accuracy. I developed several financial models that enabled a broader view of all business operations even though the company was growing exponentially. After exiting Talent Rover, that experience led me to launch my current venture, Place Technology, a financial forecasting solution built purposely for SMBs and mid-market companies. Since founding Place Technology in 2018, we have secured more than 4 million dollars in funding and have seen significant customer growth with SaaS and professional services companies.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I would exactly call it funny. I remember very clearly the day in our early years at Talent Rover when our controller let my business partner and I know that we needed 300,000 dollars in the next few days in order to cover payroll. Thankfully, we were able to cover it, but it shook me and ever since that day I have a deep understanding of the value of accurate cash projections. It’s also a catalyst for building the financial models that eventually have led to PlaceCPM.
Is there a particular book that you read, or podcast you listened to that really helped you in your career? Can you explain?
The Hard Thing About Hard Things by Ben Horowitz is one of my all-time favorite business books. An extremely accomplished VC, Ben shares an intimate and very raw retelling of his professional journey, and reflects on his life as a successful founder and CEO. It’s a book that I consistently recommend for both entrepreneurs and business professionals.
For first time founders I would highly recommend Traction by Gino Wickman. It’s a great read and provides practical guidance for running a successful business.
Are you working on any exciting new projects now? How do you think that will help people?
We recently announced several product enhancements for our core solution, PlaceCPM, which are designed to improve workflows for finance and increase collaboration among business operations. This includes the addition of cost controls to manage spend approval, audit trailing and accountability to track all user-made changes, and enhanced SaaS dashboards.
While these functions seem negligible on their own, together with our platform they solve a critical need for finance teams: greater visibility and control. With these enhancements, users are better equipped to develop flexible and accurate financial forecasts, resulting in more proactive business and growth planning and enhanced confidence in the financial performance of their business.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When you started your company what was your vision, your purpose?
Place Technology’s founding principle is to make financial forecasting more timely, more efficient and simply better for small and medium businesses. Our story is grounded in the “Why we do it” and differentiated in the “How we do it.” For decades, finance professionals at SMBs have been limited by static data and outdated systems. By the time that data was ready to be reported to executives, it was already “old news”. Modern businesses require live data from across the organization that can be leveraged in forecasting, scenario planning and reporting. When leveraging live data, you are able to create more forecasts, sooner and that leads to better business decisions. We want to arm finance teams with financial forecasting solutions made simple, built for speed and flexibility, and designed to help business leaders navigate the complexities of finance with enhanced preparedness.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
Our mission statement at Place Technology is, “We build software that simplifies business, unifies teams, and empowers companies to achieve incredible success.” It has become even more relevant during COVID-19 as we strive to provide the best support to our customers who are also navigating a challenging time. To be passionate about what you do, and to get through the ups and downs, you have to build a product that you truly believe in — one that you know will have a meaningful impact on the companies you serve.
Lead generation is one of the most important aspects of any business. Can you share some of the strategies you use to generate good, qualified leads?
An effective B2B lead generation strategy starts with a deep understanding of your target audience. Businesses should be attuned to the objectives their ideal customers are trying to achieve, as well as the problems and pitfalls that stand in their way.
With this knowledge, businesses can create content aimed at addressing the pain points their target audience faces to help them achieve their objectives. High-value content (webinars, ebooks, etc.) can be gated for lead generation purposes, but it’s also important to publish high-quality insights for everyone on your company blog. This helps your brand build trust with in-market buyers, and establishes your reputation as a thought leader in your industry.
The next step is to identify the platforms where your target audience spends their time. These platforms could be online — like social media channels — or offline, like trade shows and conferences. Determine which content offers and promotion tactics will work best for each platform and adjust your strategy based on performance.
Finally, lead generation doesn’t stop when your ideal customer fills out the form — leads need to be segmented and nurtured to ensure they get timely, helpful information from your business as they progress through the sales funnel.
If a fellow CEO would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
There are certainly pros and cons to both approaches. When I launched Talent Rover, we didn’t raise any funds from institutional investors. Instead, we raised a significant amount of money from angel investors who believed in our team and our approach to tackling this market problem. This gave my business partner and I tremendous latitude to run the business. We were fortunate that those angels continued to fund as we were experiencing incredible growth, but this was a big risk. It was also something that larger clients were concerned about — as institutional investment can add a needed level of credibility — and nearly resulted in us losing their business. In the end, the pros outweighed the challenges, and we successfully exited the company.
On the other hand, when I started Place Technology, I deliberately wanted VC capital as part of the initial funding round. We are primarily backed by angels, but having VC funding early on gave us market credibility, more resources to build our solutions and will be helpful when we look to raise additional capital from new investors. However, there are more restrictions, controls and governance requirements.
I look at all investors as personal relationships regardless of what type they are. They are a critical part of your success. It’s important that you develop a sense of trust and transparency, so choosing the right investors that foster this type of relationship is one of the most critical things a founder must do. A transparent and trusting relationship means open communication and sharing the bad news as much as good — if not more. When the times get tough you don’t want them to be caught off guard. They should be well-informed along the way.
Regardless of which route you pursue, make sure you are confident in your understanding of the company’s cash flow, how much runway you really have, and where additional funding is coming from. Being on top of this gives you credibility and reliability, and you will be in a better position when the need to raise more money arises.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
It really depends on the type of company and their business model. For example, the way you value a SaaS company is very different from a professional services company. My suggestion is to understand the benchmarks for your industry and then ensure you have technology and capabilities to measure your performance against those benchmarks.
At Talent Rover, one of the reasons we were able to raise so much capital was not only because we could execute against sales targets, but we also deeply understood the financials of the business. It was the financials that enabled us to not only make better decisions while running the business, and helped us better understand the various models for the company looking to acquire us, which in turn enabled us to negotiate a better exit price.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
It is important to understand the pain points of the market your company serves and create a solution that addresses those needs in an efficient and effective way. To accomplish this, your sales team needs to be engaged with customers, soliciting feedback about the product and anticipating future needs.
The bottom line is, the team you build around you and your business’ mission is critical to “restarting the engine” of a stagnant organization. Building a team with a growth mentality will naturally seek out industry pain points and modify your approach to adapt to market needs.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
A critical finance mistake startups and new business owners make is mismanaging cash flow. In simplest terms, money coming into the business (revenue), should exceed money going out (expenses). The best way to manage cash flow is to build a financial plan that allows you to forecast all revenue and expenses based on real, transactional data. What recurring cash do you know will be coming into the business and what recurring expenses will require payment? Making sure your forecasts are up-to-date can prevent miscalculations on what business functions are profitable, or where a business can draw more profits — another critical mistake.
Another critical mistake is heavily relying on optimistic or best-case scenario projections before making a business decision. The reality of running a business is that sudden volatility is always a possibility. It is sometimes best to lean on more conservative projections — it can improve cash flow and increase profits.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
1. Democratize data — Finance teams can often be siloed from the rest of an organization — simply counting the beans that someone else threw at them. Most business leaders are focused on forecasting revenue, but there’s so much more you should be tracking and predicting: cash flow, customer acquisition, pricing models, hiring strategies, expenses. In order to forecast for each of these, you must break down silos and eliminate information bottlenecks that hold up the free flow of operational data. This allows the finance department to have better access to information and more timely updates to financial projections.
2. Historical data no longer rules — Prior to COVID-19, relying on historical data and precedent was enough for most finance and business leaders to make reasonable predictions and decisions. However, given the likely uncertainty and volatility that will exist for years to come, solely relying on historical data would be a costly mistake. Simply put, there is no precedent to the uniqueness of our current financial situation. The best practice is to build forecasts around transactional data — what will you buy and sell in the future, how expenses will increase or decrease — and reevaluate or readjust on a consistent basis.
3. Build forecasts that enable quick decision-making — If the modern finance professional expects to survive in today’s data-driven, fast decision making world, they can no longer rely on static annual budgeting to get the job done. To thrive, businesses need to leverage technology capable of gathering live data from across an organization, analyze the data and then translate it into a report that is easily digestible for executives to make an informed decision, quickly. Arguably the most important, the data in forecasts need to be quickly and accurately adjusted on the fly as market conditions fluctuate and business changes are made.
4. “Business-centric” finance team — Most finance teams have integrations with the organization’s CRM platform, where they can get a realistic view of the deal flow and how it impacts the financials. But this is just the surface. It’s critical that finance builds a strong relationship with not only the sales team, but every department and team within the organization. It not only impacts financial performance, but also develops a stronger sense of how financial decisions impact the business’ operations. The organization is better positioned to make more accurate financial predictions based on quantitative and qualitative customer data.
5. Understand and anticipate market trends — As financial data becomes increasingly complex, understanding and anticipating market trends will be key to ensuring financial resilience. Failing to reflect these anticipated changes in your company’s financial forecast, can hinder your finance teams’ ability to make the necessary adjustments to weather any significant financial turbulence.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Our core value at Place Technology is “Enjoy the Journey”. Building companies is extremely hard and comes with immense stress for the founders. It’s easy to get consumed with it and lose sight of what you are doing. You have to take time to recharge and step out of the business. In the early years at Talent Rover, I would work through my vacations, coming back more tired and stressed than when I left. I love what I do and work a lot, but taking a few days to recharge is critical to stay sharp, focused and, most importantly, passionate — otherwise burnout is inevitable.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I became an entrepreneur because I enjoy solving industry problems. With both of my companies, you knew the market pain points and wanted to build something that could ease that burden. I recently joined the board of Entrepreneurs’ Organization (EO) Austin, a peer-to-peer network of influential business owners to share ideas and learnings that ultimately help entrepreneurs achieve their full potential and grow a successful business. I would love to continue this work, leveraging my passion and knowledge of building businesses to help other entrepreneurs bring their world-changing ideas into reality.
How can our readers follow you online?
Place Technology blog — https://www.placetechnology.com/blog/
Medium — https://bmetcalf78.medium.com/
Twitter — https://twitter.com/PlaceTechnology?s=20
This was very inspiring. Thank you so much for joining us!