Recession-Proof - a podcast by Ramp

[00:00:02] Kelly Battles: Beware because we were clearly in a long term greed cycle. I think the best companies are those that are disciplined during the greed cycles, and then emerge with strength from the fears when you have a fear cycle.
[00:00:20] Alex Song: Welcome to Recession-Proof, a podcast by Ramp. Join us for in-depth, thought-provoking conversations with finance leaders, executives, and investors on the current state of the market, and what this means for your business through 2022 and beyond. I'm your host, Alex Song. All right, then, Kelly, welcome to the Ramp podcast. It is great to have you here. We've got some really interesting topics that we're going to talk about. I'm very excited to have you here, and it's good to have you.
[00:00:54] Kelly: Alex, thank you so much. It's my pleasure to be here. I'm very much looking forward to our discussion, and I always learn interesting things in these types of situations. I'm happy to be here.
[00:01:03] Alex: On our podcast, obviously, we try to interview a number of folks who have a long and storied careers in finance and whatnot. We'd love to begin with just a dive into what led you here, what have you been up to over the years, and what you're up to today.
[00:01:19] Kelly: I'm from the South, went from Birmingham, Alabama to Princeton, New Jersey for college. I was an engineer there. Loved every minute of it despite the culture shock, as you might imagine. It was really wonderful experience. During that time, really enjoyed a lot of my finance and accounting classes and decided instead of coding and engineering, I wanted to try my hand at finance and not really knowing the difference between investment banking and operational finance and all the different options, I followed the herd into on to Wall Street. I worked at JP Morgan for three years.
I worked in both M&A and capital markets there. Really loved capital markets, which is I think a foreshadowing of my career to come. I loved the intense days, the market-driven decisions and the sprints. I didn't love the marathon of an M&A project, and I think that's indicative of my personality and why I ended up doing more private company high-growth businesses. After three years at [unintelligible 00:02:12], I oversimplified and said, "I'm bored of thinking about just debt and equity," which is a massive oversimplification of what bankers do, but that's the way I had it in my head and decided that I wanted to broaden out and try my hand at something else.
I did what a lot of people did then, and I went to business school, I went to Harvard. I was there for two years, and in the middle of my two years, had decided that after growing up in Alabama, moving to Princeton, New York, and Boston that I was going the wrong way. It was just way too cold for me. I was determined to get the best job I could in the South. I ended up in McKinsey in Atlanta. Justified it by, I've spent a lot of time thinking about debt and equity, and I naively thought that consultants thought more about optimizing assets, running companies, et cetera. Maybe not so naïve, but was at McKinsey for three years. I used to joke I loved everything about McKinsey except for my job.
I loved the people, the clients, the problem-solving, the frameworks, the thinking, but I didn't love being a consultant. I didn't like dive-bombing in and analyzing, putting together a pretty deck, and then leaving, and didn't also love the constant travel. Got engaged during that time. My husband and I decided to move out West. He had gone to Stanford and wanted to do the startup thing. I did, too, at the time. We came out here. I had no technology experience, no operational finance experience and no startup experience.
I got very good advice for a very good CFO here in the Bay Area who said, "Kelly, we don't have the luxury to hire natural athletes at startups. You need to go learn some of this before you come to a startup, and so you should go pick a really good big company and learn about tech and the Bay Area and operational finance," which was very good advice, it's what I did. I went to HP. Was there during the arc of Lew Platt retiring, Carly Fiorina coming in. Went from the world's biggest high-growth company to struggling with growth, bought compact, it was a big arc, and decided at that point that it was time to really-- after six years there.
I did mostly corporate finance and M&A, but I also did some operational finance. I got a little bit closer to the product and learned a lot about technology in the Bay Area. I decided it was time for me to do what I want to do, which is try my hand at startups. The first person I called was Scott Weiss, was the CEO of a company called IronPort Systems. He was a very good friend. We worked together at McKinsey and we'd overlapped a year at business school. Just calling for advice. I was like, "Scott, I really want to do this. I wanted to go do operational finance at a startup, but unfortunately I still don't have a ton of experience. What do you think?"
He said, "Kelly, I think it's a great idea, and I've got the job for you." He was hiring his first finance person at IronPort. I interviewed, loved it, took the job, and it was probably the best career decision I've ever made. Was there for six years. We ended up selling. It was an email security company. I was the first finance hire, build out a bunch of different functions. We ended up selling it to Cisco. It was a very good outcome. Stayed at Cisco for the integration work. Then also I actually worked for the Cisco CFO for nine months as a chief of staff light. Trying to figure out if there's a place for me at Cisco.
It was interesting to see the leadership of the finance organization at that level up close and personal, but I really decided that at the end of the day, I wanted to go back to smaller companies and be a CFO again. From there, I've done four CFO roles. IronPort was an appliance early SaaS company, so hardware with some SaaS, I did a pure SaaS company, a pure IaaS company, a consumer internet company, and a women's healthcare company. I diversified. I feel like as a finance person, the CFO work sometimes can get a little rote or repetitive. The way I kept challenged and interested was by trying learning new business models.
The other way I kept challenged is like taking on other functions, so I ran in many of these companies HR, legal, facilities, IT, business development, sales operations, other functions. At core, I even ran the moderation team, which was the consumer internet company I was at. At that stage, Kelly 3.0 emerged, which is me today. I'm no longer doing full-time CFO work, and I'm focused on board. I'm on six tech boards and one ski resort actually. I've been on that board for 25 years. On companies like Arista, public, all the way to Alpha Medical, which is the small women's health care company that's private.
I've got two bigger companies two medium companies, two very small companies, one public, five private. That's where I am today, I'm very much enjoying Kelly 3.0, the board work, and happily married lives in the Bay Area with two kids, two dogs and a cat. That's my background.
[00:06:43] Alex: There's going to be a lot to dive in there. Obviously, you've got the corporate finance, investment banking, and M&A experience there. You have experience of being a very early finance hire at a slew of smaller companies, as well as some very large tech companies as well, and then obviously, now you're sitting on a number of boards. There's a lot on my list that I'm going to ask you about first question, though, we need to talk about Quora. I think we've got some listeners who actually know how obsessed I am with Quora.
I was an early user, a very avid contributor as a matter of fact. I have been looking forward to this conversation with you for a while. Tell me everything. Tell me about Quora. Tell me about how you found the opportunity. Obviously, it was an experience out of many, many, and we just love to hear about your experience there.
[00:07:35] Kelly: I love Quora also. Let's see. I found it through a search firm and through networking, actually, I found it two different ways. A friend introduced me to Matt [unintelligible 00:07:43], who's on the board, and at the same time, as an executive search firm had mentioned it to me as well. It came to me in both ways. I had been on the board of Wikipedia for several years. Wikipedia on Quora have similar missions. Wikipedia is about democratizing knowledge, and Quora is about growing and sharing the world's knowledge. As a person who is a product of American dream stories, both my parents were from the product of European immigrants, first people in there or either the first or one of the first people to go to college.
They grew up in West Virginia. My grandfathers were both coal miners. They were big believers in the power of education to change a life. It changed theirs certainly, for the better. I was very enamored with those missions. Quora and Wikipedia are not social media companies, but I was watching what was going on in some of the social media companies and thinking, "There's so much power for good in these companies, and there are so many missteps." I believe in 100 years when people look back at the internet, they're going to see some bad actors. History is not going to treat some of these companies well. I think Quora and Wikipedia are two examples of where history will treat them very well as examples of the power of internet for good.
I just wanted to be part of it, especially given my background. Again, also I wanted to learn a new business model because that's how I-- The McKinsey consultant in me, that's how of stayed fresh and challenged. I had never done consumer internet for profit, for sure. Wikipedia, I was on the board, and it's not for profit company. That's what drew me to it, originally. Then when I choose a company, it's people culture is number one, market opportunity, product-market fit, and then the role. Quora nailed all of those for me, starting with the people and the culture. Adam D'Angelo, the CEO and founder, is one of my favorite people on the planet.
I think the world of him, he is brilliant. He's probably the smartest person I've ever worked with, and I've worked with a lot of smart people. He's kind. We had shared value. He built a team that I could get around and a product that I loved. For me, it was a no-brainer once I got introduced to the company. That's how I chose it.
[00:09:48] Interviewer: Let's actually go back to one of your comments about how history will view certain actors, certain companies and whatnot, and let's chat about that actually. Obviously, the subject of content Moderation versus free speech is something that is pretty live right now. Obviously, these days Twitter, Elon Musk that's in the news right now. I think a lot of people are thinking about that. What did you mean specifically when you said, "Hey, I think Quora and Wikipedia did the right thing or doing the right thing." Is there a specific message there with respect to content?
[00:10:21] Kelly: I think, first of all, it's a noble mission. If you want to get into the controversy, the product moderation, I'd be happy to. That's part of it because I do think that, it's very hard, but they try to keep true to the mission and to keep quality content on the sites that are helping people, not hurting people. Let's talk about, so the product moderation team did report to me. That was the first for me, obviously. I was new to consumer internet and this team ended up rolling into me very quickly.
[00:10:48] Alex: Which is interesting. Rolling up into the office of the CFO. That's also pretty interesting.
[00:10:53] Kelly: Definitely not typical, but I think it was more of like the COO type of capabilities that I built up over time that Adam trusted me with it. This is how we approached it at Quora. It's a four-legged stool. I think this is still valid today. You really have to start with a strong mission and then set policies and processes that match your mission. Quora's mission was to grow and share the world's knowledge base. That was helpful because it was all about knowledge. Arguably, Quora has an easier time to moderate than like a Facebook or a Twitter because social media and the videos and the content that could come along with that, there's just a lot more gray space than there is in, "Is this knowledge or not?"
Once you know that, then the first step, the first leg of the stool is to set policy and process that match, that supports-- it's not, one, our mission, but one of our foundational principles is that we were not a free speech company. We understand the First Amendment, and in our reading, it doesn't apply to companies, it applies to people talking to the government. It doesn't apply to private companies controlling what is said or not said on their platform. We were not a free speech company. That's wasn't in our DNA. We were about helping people. That helped us set very clear policies around harassment, bullying, child pornography. This stuff happens on Quora.
Even though it is a knowledge, these bad actors do play, but we had very clear lines where this is not acceptable. Either the content is out or it's deprioritized, and the bad actor is out or deprioritized. The policy and process. Then the second thing is product. We try to use as much ML and AI, machine learning and artificial intelligence, to make the product find exceptions to the policy and process. Not perfect, but getting better every day. Then the third leg is the community, a self-policing community. We have terms of use, both Quora and Wikipedia are blessed with passionate community members as you are illustrating or personifying yourself.
That self-policing helps because it's just a big network of people that are watching all the time and surfacing exceptions where the product is not catching things. Then finally, we had a team that reported to me that handled the exceptions in cues. They were cues for harassment, they were accused for bullying, they were accused for other things. Then if the exceptional shades of gray came up, then we had people, whether their employees are contractors, handling those exceptions. We didn't get it all right. No company does, but I feel we're pretty good.
Where I feel there's going to be some backlash is in the future is either companies, either through malice or through bad actors or just through not having enough resources time or understanding the tiger that they've got by the tail, not handling these things. Then having manipulation, whether it's false news or influencing legal elections in a bad way or helping genocide happen, whatever it is, not being able to stay on top of that won't be looked on, in my opinion, well. If you want to talk about the free speech situation, I feel I was pretty clear about that. I agree with Quora's view on that. I also feel I don't know a lot about Twitter's history.
What I've read between the lines is they started out, if I'm right, as more of like free speech is the way we want to go. That didn't work out well for them. Then they spent a lot of time fixing the problems that caused. I'm very worried that if this deal goes through and a lot of this progress that Twitter's made-- Because I'm a big Twitter user, and I think it's a very good way to consumer information. I think it depends on how well you curate who you follow. We know it, Captain Obvious here, but it's very impactful in this country about what's happening right now.
I'm worried that if the progress that Twitter has made over the last decade is undone by a misapplication of the First Amendment rights, then this country will be impacted. I think that's an example of where these companies are powerful and can do things that are harmful to the country, the world.
[00:14:53] Alex: That's fascinating. Clearly, I'm also a somewhat passionate Twitter user as well, so definitely resonates. Then I think people probably do remember. I think three or four years ago, Reddit went through the exact same thing where there's a significant amount of controversy around this topic, and I think everything up and down the board and CEO were pretty significantly impacted by just all of the concerns around this. Last question on Quora before I'm done being a fanboy. Last question, which is back when I was active, a few years back, I saw a lot of very high-quality content from Quora employees.
I don't know how they had the time to answer so many questions so thoughtfully, so well, and contribute to the corpus of knowledge. Here's my question. Were people on the clock when they did all of this stuff? When you were there and you were looking around, were people working and writing on Quora at the same time, or is that something they did in their own time? There was so much good content.
[00:15:53] Kelly: First of all, I think Quora is a written word culture. It's a mission-driven company. The beauty of a mission-driven company is that alignment is a lot easier, and a lot of people align. Employees aligned over how impactful the product can be and helping people in their lives, and so we never had rules around, you must write this much content, and you must do it here or there, at home or at work. I just think people were passionate, and most people probably did it outside of their work hours. I know I did. Maybe after dinner one night if somebody asked me an interesting question, I'd take an hour and write out an answer because part of this, I did feel like it was more my job.
I wrote a lot more when I was at Quora than I do now. Although I always want to write more on Quora, but I've just got so many other things to do. It's so aligned because you're using your own product. If you're trying to moderate or if you run the moderation team, you want to be on the product to see what's going on out there. If you're trying to do ask questions or write answers, you see things that are going on, the user experience that may be great or bad. It's more on your mind, and it's more integrated to your day-to-day job. I think most Quorans are really passionate about the product and about writing, and about growing and sharing the world's knowledge base.
They're doing it because they love it, not because they need to be on the clock an hour during their eight-hour day, which is never the case anymore. No eight-hour days, but to get the content out.
[00:17:17] Alex: Fascinating. Thank you for indulging me in all of these topics. I do want to pivot back to the topic at hand, which is for this season of the Ramp Podcast, we're trying to spend more time just thinking through business cycle, recession-proofing lessons learned, and whatnot. I actually do want to touch on some of the other experiences that you've had over the arc of your career. Maybe we can start backwards. Let's talk about the last couple of business cycles that you lived through, whether it was 2009, the great financial crisis, or the dot-com era, the dot-com boom and bust.
Maybe we can talk a little bit about just who were you at that point, what were you up to, and did you have any lessons learned about finance or leadership or running a business through some of these eras?
[00:18:06] Kelly: I've been out in the Bay Area for both of those cycles. I'd say, the three cycles that I've lived through, if you count the current one, have been caused by very different factors. There are certainly things that now, as an old lady, I'm seeing these patterns emerge. I would say that the pattern I've recognized and I've been thinking about the most in this go-round is what I'll call the overreaction to the fear-greed cycle. This is a tech Bay Area bias answer, so I apologize for that. Although I think there's still lessons to be learned from this broadly, but I think because of the way that the tech investing works through the venture cycles or the venture process, you get this dramatic fear-greed cycle.
Because a lot of VCs follow each other in their sentiments. In good times that's the greed cycle, and then bad times, which arguably we are in right now, is the fear cycle. What I've seen emerge is that during the greed cycles, companies are encouraged to spend because growth is the currency and sometimes to unhealthy levels, like growth at all costs. It's not just like the markets. It's the board, the investors. I've seen it now and so part of it is because if everybody else is doing it, you're going to fall behind if you're not also going for market share and doing this.
Then you pivot to the fear cycles where it's all about hyper-analysis about every spend decision, every hire, risk, reduction of forces like retooling, retrenching, et cetera. I just think it's unhealthy. I'm being sincere, I was giving this advice in the last year or two as I've joined boards. It's like beware because we were clearly in a long-term greed cycle, and I think the best companies are those that are disciplined during the greed cycles and then emerge with strength from the fears when you have a fear cycle. There are companies who are going to survive this just fine. A lot of them are companies that just raised so much money in the last couple of years because it was so plentiful. Like, "Fundraising was so easy," and didn't spend it.
Now, they're going to be able to come out with strong balance sheets in an environment where it's going to be easier to hire, although that's still not coming to fruition yet, but I think it will. Easier to hire, easier to take share, cheaper to take share, let's put it that way, and cheaper/easier to buy assets that are struggling. Companies that didn't raise the money or raise it and spent it. I think that's an example of emerging strong. I think you're going to see companies that burn, burn, burned, and now are going to struggle. There's only so much you can do to get out of that in an extended cycle, which I think we may have.
Then the question is how can finance help? Finance, at the end of the day, if I had to distill the role of a good finance leader, like a CFO, there are lots of finance leaders throughout a finance organization, but let's use the CFO as an example. The best CFOs are true business partners to the executive team and bringing to bear not proliferation of data, but synthesized information to help their business partners, their CEO, their board, their executive team, the extended teams make better decisions. To me, if I had to distill, that is the role of the CFO. All companies, no matter how great, go through these cycles and have problems.
There were days when I thought IronPort, which was incredibly successful, was going to die. It is how you get around these obstacles, how you get through these times that defines you, whether it's a team, executive, person, et cetera. See, I think really finance can help. Finance can bring to bear information, make these decisions easier. Where I think this really comes together most succinctly for me or most viscerally for me as a CFO or a former CFO is in the CEOs likes to live in the future. Good CEOs live in the future. "What's around the corner? What do we do about it?" Bad finance people live in the past.
They're always closing in the books, closing in the books. Closing the books is very important, but the most important thing is to close it efficiently and then learn from it. Take those lessons and apply them to the future with the CEO or the broader team. "What does this mean? What have we closed and disclosed here? What have we learned, and what can we do about it? What are the key drivers in our business? What are we learning about those drivers and their performance? How can we optimize those drivers to optimize the future performance of the company?"
To me, that is the way you help get through these cycles recession-proof your company as a CFO is to be really disciplined and focused on those types of activities first and foremost. Yes, you can cost cut, yes, you can mitigate risk, yes, you can do this stuff, but at the end of the day, joining the CEO in the future and understanding the past, understanding what you can learn from it, understanding current performance, what it means for the future, what you need to do differently in the future, or what you need to double down on or stop doing, to me, that's how you do this right. There's a lot in that.
I'll say one other thing that ties together your core question in this question. I do think that finance has a very important role to play on setting the right culture on these things, too. To make sure that you are, as a company, not just a finance team, disciplined during the good times and strong during the harder times. Let me give you a little anecdote here. Not a worse story, but an anecdote. When I joined Quora, it was the first consumer internet company I'd been at, as I said. I knew a lot of people at other consumer internet companies. I knew about the rich benefits that were provided to these companies. I knew Quora provided some of these, too.
I was like, "Huh." Corporate Quora wasn't public. Quora wasn't as far along at scale. I was like, "Can we really afford this? Am I going to find this unreasonable?" et cetera. I was running the facilities and IT teams as well. I put myself purposely into the queues for those two teams. A lot of email about fixing my PC and the garbage can is full here, but I wanted to see what the culture was like on these things. I read these emails. I didn't read the ones about fixing the PCs, but I read the emails about special requests and the likes. If something really bothered me, I would send it to the VP that was in charge of the team where it was being requested.
I would say, "Hey, can we talk about this?" I went through this exercise many times with some of the [unintelligible 00:24:17] around some of the more extreme requests. I think it was a very good process for me because it helped me calibrate the Quora culture and get used to, as I was the oldest person in the company or I'm the second oldest person in the company, very different generation. I came from enterprise sales, so different culture, very product oriented versus sales oriented. It helped me calibrate the culture, and it also helped me point out in a data-driven way things that I thought were too extreme with very data-driven people.
It ended up, I think, helping the culture of Quora because I think we didn't have a big problem, but we had some things that we needed to deal with, and we dealt with them. That's an example for me about it's not just about the numbers. You can use your data-driven approach to help impact culture as a finance person. I think that helps set the right culture to have the right sensibilities around the good times and the bad, so that you can help have a lower beta when you go through these cycles.
[00:25:07] Alex: Any specific beta experience or company that you've had that you think, looking back on it, "Wow, the culture here was really good"? Any one of these formative experiences that you want to call out and just specific places, where you were like, "Wow, very strong culture, really was. Looking back on it, it was really good"?
[00:25:25] Kelly: Yes. For me, that answer's easy. I always focus on people and the culture. It is, for me, the most important criteria, and I think I've been very lucky. I think, first of all, as a young kid when I started here, focusing on that, I think that wise. The people-person, I care a lot about it. I think it's served me very well because I've been at companies that have been amazing. Starting with companies like JP Morgan and McKinsey, which both had really great values and culture at the time. Then as an executive, helping to set it, but I have to say IronPort, for me, stands out.
If you'd asked me about my most formative experience in my career, it would be IronPort and partially because of the culture. IronPort, when I joined, we had a $1 million in bookings, and we took it. When we sold to Cisco, we had-- I think it was $125 million going to $250 million, and I was only there during that. It was like we went from $1 million in bookings to $125 million in bookings in four years. It was insane, Alex, and this was the first time I had ever done this. I joked with Scott, the CEO at one point, that I felt like I was holding on to the back of a rocket engine, and I was holding on with my fingernails, and the fumes were blowing in my face, and I was just trying to hold on for ear life and not fall off.
It was insane, and I learned so much. It was very stressful, but the first year of IronPort was probably the most valuable year of my entire career professionally. Why was that? One, it did have an amazing culture. The CEO and the head of HR, Anna Binder, who's now the head of HR at Asana, she is one of the best, if not the best, HR executives I've ever seen in action. They just were in sync early on, "What's the mission? What are the values? What are the supporting processes that we want to use. whether it's performance management or office décor, to support the culture?" It was just consistent from day one.
I'd have to say, one, I saw that culture can be not just make a fun party atmosphere, et cetera, which, IronPort was tons of fun, but it was a competitive weapon. We had very low attrition, and this was when Google was putting up ads on billboards on 101, saying, "Solve this problem, and you get a immediate job," and they were just sucking talent everywhere. We had very low attrition, and we had high employee engagement before anybody talked about employee engagement. Then as a subtext or a subpoint for me, I think that the IronPort leadership team was probably the best leadership team I've ever worked with, arguably.
None of us had done it before. It was just a bunch of smart people who didn't just supply what they'd done a five times before, but thought through things for first principles, and just really focused on what was the right thing for the business, and there was just a great leadership culture. It was just a corporate culture. The leadership culture was amazing. I think that leadership is something that you can't learn through reading a John Kotter book at business school. You really have to see good leadership in action by osmosis, absorb it, then practice it and iterate it, and see what works for you. You can't just spout off leadership for other people.
You have to find what authentically works for you. I think seeing different styles in really strong leadership, and then learning by watching and then practicing is the way to learn leadership. I feel like IronPort was really an amazing place, not just to learn how to scale a company under duress, which I definitely learned that, too, and that's very valuable, but about the importance of culture as a competitive weapon and about how to lead, how to really learn leadership. That's advice I give to young people. Don't read a book about leadership-- or read a book, but then just find a good, great leadership team and watch them. That's why I think sometimes smaller companies are easier because you see more leadership in action, closer up.
[00:29:02] Alex: There was an earlier comment, and then you'd actually just made that comment again, just now. Small versus large company. Maybe we can talk about private versus public. You were at a Cisco for a little bit. Obviously, you were at HP, larger-scale companies, and then a whole slew of smaller businesses. You have stated you clearly have a preference for being at one of these smaller companies, private companies. Maybe compare and contrast. Why the preference? Maybe we can delve into what is it about certain characteristics that you want to optimize where that leads you to some of these private smaller companies versus the larger public ones?
[00:29:42] Kelly: I think a lot of it depends on your personality. There's no right answer for any one person. For me, I'll tell you about how I approached it and why I feel that way, and then people can see if it resonates with them. First of all, I'm a very hands-on doer. This is one of the reasons I didn't love McKinsey, the work. I loved the company, but I didn't love being consultant. I've really liked to be part of the team. I like to dig into spreadsheets. I love to lead and manage. Even at my age and my tenure, I don't mind getting in and being an individual contributor and building a spreadsheet or writing a paper or whatever and writing a Quora answer, whatever it is.
I think that that personality trait lends itself more to the smaller company experience. I'm from a family of entrepreneurs, and so I just feel like you feel more entrepreneurial when you're at a smaller company. That's why I was drawn to a smaller company. What I learned when I was actually at a smaller company is that you just see more learnings. You're less in your silo, and you're more cross-functionally aware because it's just a smaller environment where you're naturally seeing other people in action working across-- especially when smaller companies usually can't afford to keep you in your silo. If you can do this, go do it. We have more work to do than there is people to do it.
You just naturally see more people in action across functional lines, and you knit more naturally, wear more hats, get to do more things outside of your scope. If you go to a big company in finance, you're going to do a two-year rotation in five different groups before you have a cross-functional view of finance. Maybe, not always, but maybe. Whereas in my first year at IronPort, I feel like I saw it all because it was crazy. Sometimes I didn't like it because I was so swamped, stressed, and busy, but it was uncomfortable. I feel like I got a PhD level of finance in 1 year versus spending 10 years doing 5 two-year rotations.
Right now, I'm being hyperbolic or extreme here. I just think that if you're a sponge and a learner, and you want that kind of atmosphere, you're just naturally going to find it at a smaller company. Not always. Now, I will say that early in my career, I did go to big companies. I was at very big companies, and the advantage there is one, the brands are easier. It's less risky to choose. You have more information to make your choice about the brand, the financial health, et cetera. Two, they can spend more money. Remember the whole natural athlete versus been there, done that argument I got when I was trying to get my first startup job.
They can spend money on training you that a startup's not going to spend, and they also have training programs. My JP Morgan training program was 60 people. I'm so close with those people or some of them anyway. It was like this very social learning environment but also working. There are advantages, especially early in your career to going to big companies. For my personality, I got to the point where I liked being at smaller companies because I felt like I could have more impact, I learn more. Culturally also, even though I'm a CFO, I do not like process. [chuckles]
I like to put in the lightest touch process at the very last minute you need to put it in because process slows down companies. That doesn't go over well in bigger companies. That's much more of a startup mentality. I think that was just a natural fit for me. I don't like hierarchy and politics and all that stuff. I feel like there's just more accountability in smaller companies often. I don't like massive stereotypes, but often. It just appealed to my sentiments and cultural sensibilities, too. Also, they're just fun. I enjoy the growth, the whiteboard. I got at the point in my career where smaller companies were just a better bet for me.
[00:33:24] Alex: I think that's a really good encapsulation. I'll be honest, a lot of what you described really resonates with me as well. I started my career on Morgan Stanley. Analyst program, very nice training experience, good training grounds for the future in finance, et cetera, et cetera. Then lo and behold, the last couple of years of sitting in this operating seat here at Ramp running finance and building out some amount of process has been incredible. It is very much, hopefully, impactful and definitely, I'm drinking out of a fire hose every single day. I think there's a lot of what you described that resonates with me.
I do want to delve into one last topic before we run out of time, and that is really your current role and position with respect to how you're supporting some of these companies, which is sitting on boards. This is a topic that we historically haven't had a ton of time to delve into, at least on the podcast. We'd love to hear a little bit about your experience. I'm sure as a CFO, you've previously been on the other end of it, which is managing board relationships from the operating side, but we'd love to hear a little bit about just the experience of sitting on boards, the good, the bad, any interesting key takeaways and any advice you might have for operators for potentially managing to some of these board relationships?
[00:34:44] Kelly: First of all, I'll start with the end, which is advice. I would say get on a board if you can. Even if it's as a full-time exec because I think it makes you a better executive. When you're a full-time exec, especially in an intense startup or private company, scaling a company, you can get tunnel vision I think having another company and seeing from a bird's-eye view what they're going through gives you perspective, context, learnings, and you start building your pattern recognition. I would say as soon as you can get on a board.
Now, getting a board, see, the first one's always the hardest, especially a public company board seat. I would say be patient and network because a lot of these positions are really unfortunately still through networking. I say unfortunately because I think that works against diversity of candidates, which is obviously a big problem in US corporate governance world. I'd say work to network and do not for profits. For me, Wikipedia was probably the most complicated organization. I think Wikipedia is the most complicated organization, non-government organization maybe on the planet, in the United States. It's just so complicated. Even though that was a not for profit board seat, it's a top 10 brand and a very complicated learning environment.
That was hugely valuable. If you can get a not for profit board seat, or I've been on a ski resort for 25 years, and I've learned stuff there that I can apply to tech companies. Even if it's not core in your business, don't be too picky about some things. Just get on a board and get to practice. Because once you get the first one, the rest are easier. I would say that back to choosing boards, I use that framework. I mentioned the framework, people culture is number one, market opportunity, product-market fit, and stage, and then the role. Those are my four in priority order. Things that I do due diligence on and I judge before I take an opportunity, company or board.
I would say for a board, that's still very relevant. I think that in some ways board seats are-- First of all, I would focus on those things, do due diligence before you make your choice. In some ways, joining a board is even riskier than taking a job because especially, a public company board, there is risk of things go south with financials, [unintelligible 00:37:08], et cetera. In some ways, it's less risky because you can diversify. You've got one full-time job, one slot. Unless you're superhuman, you have one slot for a full-time job. Unless you're Elon Musk or Jack Dorsey, you have one slot for a full-time job. You can do multiple boards.
Now, if you're working full-time, I would say don't do more than maybe two. Two's pushing it, in my opinion. I've had a lot of energy, but you can diversify. In some ways, that's less risky because you've got that you can split your [unintelligible 00:37:36]. Like I said, I'm on two larger companies, two medium-sized companies, two small companies on their board, if you just focus on tech boards. One public, five private, two are infrastructure, two are SaaS, two are consumer. That diversification is intellectually stimulating. It's fun. Financially, it's smart, but I'd say the number one thing in this is because of the risk of joining a board and there are long-term commitments, really do your due diligence on the people, seriously.
Do everything you can, blind reference them, read their answers on Quora, watch their interviews on YouTube, check and see if you can find stuff based on social media about them, learn about these people, and make sure you want to be around them and you trust them before you join a board. It's easier when you've got venture capitalist on the board and they're bigger companies. Maybe harder when you get more independence. I'm talking about the board members and the executive team. Make sure that you trust them and that you want to spend this time with them.
You've asked a lot of questions about the board, but the other thing I'd say is I was worried about joining boards too early. I always thought I want to do this. I ended up leaving Quora because I had a health problem that took six months to get through. I'm totally fine, but I was planning on staying at Quora. I always knew it'd be my last CFO job, but I was planning on staying there much longer. When I got through my health situation, I'd announced to join the Arista board while I was recuperating. I thought, "I'll do a little A/B test. I'll take on another board seat, and I'll do a temp CFO role and just test."
Because I am a doer who likes to be part of the team, didn't like being a consultant, I was worried that the boards are going to feel like that. What I learned through my A/B test is that I was ready. What I found about being a board member is that for me, for my personality, because you are part of a long-term team and you are still helping scale and build a company, albeit not as directly, for me is satisfying. I don't feel like I'm a consultant coming in and leaving. I do feel like I'm part of the team and really engaged and helping and learning, et cetera. I found it to be very gratifying and fun.
[00:39:48] Alex: Thank you so much for that perspective. I think that's an area that comes up-- it's from time to time, but we actually never were able to do a deep dive like the one that we just did. In fact, on one of your earlier points, I actually did have another CFO that I was interviewing at a prior episode. The two of us were lamenting the ever-skyrocketing cost of D&O insurance. Actually, speaking of financial, legal, regulatory liabilities and whatnot, I think that's also been a thing that insurance underwriters, you have escalating stocks, you have a lot of just folks being much more circumspect about paying for such insurance. Clearly, there is a trend. They're just toward being a little bit more careful on that front.
[00:40:32] Kelly: One other thing I'd say in terms of advice on boards is in the words of Sheryl Sandberg, lean in. You're not going to be perfectly qualified, especially your first board. You just really have to lean into how you can help. Being an exec at a company, you have board experience, you're just on the other side of the table. In some ways that's harder because you're having to deal with your board instead of being dealt with. Figure out the five or six selling points of what you can add. Right now, ESG and cyber are going to be more and more important on boards.
If you're a cyber ESG expert in a company you're going to be, I think, in high demand in two years when the SEC clarifies what's needed in terms of governance on this stuff. Lean into that, but just figure out how you can add value and give your talking points and then lean in. Realize that nobody's perfectly qualified and everybody's got to get their first one somehow.
[00:41:27] Alex: One question I always like to wrap up with is that 2022 has been a little bit of a wild ride, markets, crazy inflation, there's stuff going on in Europe and whatnot. Would love to hear a little bit about for yourself over the course of the balance of the year or into next year, what are you most looking forward to? Is there anything that you're optimistic about? Even though the rest of the market, apparently things, there's going to be a hard landing and whatever macro recession there may be. What are you focused on these days and what are you looking forward to?
[00:41:58] Kelly: For me, the thing I'm looking forward to, and if you're talking about work, not personally, I'm looking forward to the world getting normalized after COVID. I'm a people person. I love being around people. I joined five boards during COVID, and only now am I actually meeting people live. I am finding that to be fun. I'm in my parents' house in Florida right now, [unintelligible 00:42:25] photos, but paintings. Being able to travel again. I did some travel and feel safer about it. While we still have realities of COVID, and I've been super conservative and careful about it, I'm really looking forward to us getting past this pandemic and just even the professional and social ramifications of the isolation that we've all been through.
[00:42:47] Alex: Absolutely. I think we're all looking forward to traveling a little bit more, hitting the road, being back in the office to some extent at least. Very cool. Very cool. Kelly, it was really great to have you here. I cannot believe that we spent the first 20 minutes talking about Quora, but such as life. It was great. All of your observations about team building culture as well as sitting on boards. Really, really tremendous. Really good to have you once again on the podcast. It's been awesome.
[00:43:15] Kelly: It's my pleasure, Alex. It's so nice to get to spend the time with you today.
[00:43:20] Alex: Recession-Proof is brought to you by Ramp. To find out more about Ramp and how we can help you control spend, save time, and automate busy work, visit ramp.com, and then make sure to search for Recession-Proof in Apple Podcasts, Spotify, and Google Podcasts or anywhere else podcasts are found. Make sure to hit subscribe so you don't miss any future episodes. On behalf of the team here at Ramp, thanks for listening.