Transcript
Matt Wolach: 0:10
One of the most frustrating things for me in my business is really having an accurate financial picture of what the business is doing at any one moment. Well, Jesse from FinOptimal came in and he shared some of the best ways we can get a better understanding of where we are right now. So we have a really strong idea of what decision we can make. Now we also talk a little bit about how can we come out with maybe a new product? How can we get to know our market better even though we might have been in the market for a while I love that he shared sometimes knowledge can be a detriment in some ways.Check this out. There's a lot of stuff we cover here. That's really helpful for early stage leaders.
Intro/ Outro: 0:46
Welcome to Scale Your SaaS, the podcast that gives you proven techniques and formulas for boosting your revenue and achieving your dream exit brought to you by a guy who's done just that multiple times. Here's your host, Matt Wolach.
Matt Wolach: 1:02
Hello, welcome to Scale Your SaaS. Super excited to have you here. Thank you very much for coming. Thanks for watching. If you're on YouTube,thanks for listening. If you're on the podcast network, if you are new to the show, definitely hit the subscribe button right now. That way, you're not gonna miss any of the cool upcoming shows we have for you. We are here to help you scale your SaaS so you can grow your company and get it to an amazing level and maybe have that dream exit. My name is Matt, I'm here to help you do it. Each week we have a guest. So that subscribes gonna get you a lot of insight into great leaders around the industry. And today I'm super jacked to have Jesse Rubenfeld with us, Jesse, how're you doing?
Jesse Rubenfeld: 1:37
All right,Matt, thanks so much for having me. Absolutely. I'm
Matt Wolach: 1:41
really excited for you to be here. Let me make sure everybody knows who you are. So Jesse, he's the founder and CEO at FinOptimal and optimal helps QuickBooks Online based businesses streamline their financial operations, optimizing value per dollar with an outsourced Accounting Service heavily focused on automation.He's also formula the CFO at Livewire, a product I used to know and love. So once again,Jesse, thanks for coming on the show.
Jesse Rubenfeld: 2:06
Thanks so much.It's great to be here. Yep,that's more or less my life and a few seconds.
Matt Wolach: 2:12
Awesome. I love it.So tell me what's going on with you lately. And what's coming up for you guys?
Jesse Rubenfeld: 2:18
Well, we're really excited. We just launched our our first SaaS product, it's called the Accrual. The accrual is the first and only way to fully automate deferred revenue,prepaid expenses, and fixed assets directly in QuickBooks.
Matt Wolach: 2:33
Very slick. I love that. Now, it's way above my head accounting wise, I let people take care of that. But tell us what does that mean when you're automating those types of things? And when does a company need that?
Jesse Rubenfeld: 2:45
Of course. So accounting is the language of business, right using accrual accounting is speaking the language fluently. So what is it? Let me give you a simple example. If I'm a SaaS company,and I sell an annual contract today, and I collect the whole thing upfront, but I have to deliver that subscription over the next 12 months. Okay, I need to defer 11 months and not recognize it today, the day that I get the cash. That's accrual accounting. It's a simple concept. But it's complicated to get right. accounting firms that we've talked to have told us that they struggled training their people including experienced bookkeepers on how to do this well. And the accrual is the easiest and fastest way to get on an accrual basis without learning accounting.
Matt Wolach: 3:42
Love it. No,there's always that big argument between cash accrual, and you know, are you on an accrual what which way you're going? Which way is the best? Sounds like a grueling?
Jesse Rubenfeld: 3:52
Yes, there's only one way. Okay.
Matt Wolach: 3:55
Okay. Love that. So why did you decide to start this company whether it's been optimal or accrual, which Why did you how did that whole thing come to be?
Jesse Rubenfeld: 4:06
Well, I would say it started with my career at Livewire, my job was to be the eyes and ears financially.Speaking of the company, if money went out of the bank account came into the bank account, I had to be able to account for it. Right I started as an entry level accountant doing Accounts Payable data entry, excuse me, the monthly close. Eventually, I rose to the CFO of that company. But only once I could take the block and tackle of my day to day and start to extract strategic insights, which is what every business owner wants to be able to do. And the way I created time to be more strategic in my job was by automating the block and tackle that otherwise would be the source of a lot of errors and time consuming research projects and exception handling.So I taught my Self to code.First it was Perl, then ultimately, Python, which is the language that most of our software is written in. And this give this gave me a platform,this automation gave me a platform to buy myself time at my day job. So that I could think more strategically and think about how to be a better partner to management. And that really gave me the idea ultimately, well, I've done a great job, I think doing this internally. Maybe I can do this for private clients on the side,I really started fin optimal as a side hustle. That was an extension of what I already did in my day job, if that makes sense. I
Matt Wolach: 5:45
love it. So you had some extra bandwidth, you're like, Well, I'm already doing this, I figured out some great ways to make it quick and simple. Why don't I just open up some of that bandwidth for others? That's fantastic.
Jesse Rubenfeld: 5:57
Thank you.Yeah, at first, I didn't know what I wanted the bandwidth for I just thought to myself, I don't want to be filing this paper away, I want to be making I was, I was actually when I lived in New York, I was a musician I used to play shows at the bitter end and in the living room and a bunch of downtown,East and West Village locations.And I wanted time to go to band rehearsals and write music. So at first, that's what I was buying time for. It was only later that I thought, Alright,now that I want to have, you know, a family, I need to do something productive with this time. And that's, that's where fun optimal came from. Not that music is not productive. Don't get me wrong. It wasn't that remunerative,
Matt Wolach: 6:37
maybe in a different way. I like that.Totally. And going back to your time at Limewire. I mean, that's a product I used in college. And it's, it's something that kind of was was very hot for quite a while that I mean, you rose up through the ranks, you had to see quite a lot of interesting things and a lot of changes while you were there.
Jesse Rubenfeld: 6:56
100%. You know,I knew right away when I came in to interview for that job. That mark, who's the principal, was somebody that I wanted to work for the offices had plants all over the place, and they were Buddha's Buddha statues. And they had these great parties,and they had an open office plan that we model our offices out on, right, I was hearing things from software developers who were, you know, sitting a couple of seats away from me. And that gave me ideas about how to do my job better. So you know, those were those were lessons, that as an entrepreneur, I didn't know what business I wanted to start,but I knew that I eventually wanted to start a business. And when I was thinking through, do I take this equity research job,or you know, something a little more off the beaten path? All right, I think that's what I want to be eventually, I'm gonna go work for him, he needs an accountant, I'm going to be an accountant. That's really how that kind of came about. And of course, I ran the brand, like Limewire is an iconic brand name when I was in college. You know,that was just the thought of working there. Wow, all right.I'm a musician. I really, I really get what they're doing.So it was an easy choice for me.
Matt Wolach: 8:13
Very cool. Good story. So focusing on what you're doing now within optimal.Why should startup founders, Why should SaaS leaders care about accounting?
Jesse Rubenfeld: 8:25
At the end of the day, it's about metrics, the closer to real time, the better when you're trying to you mentioned, you know, the prospect of having, you know,the sweet equity payout at the end of your SAS journey. It's really important to think if you want to achieve that about your business as a financial package.I know and love all the software that we've written at fin optimal, but I know that our investors current and hopefully future investors will think of us as a money making machine to some extent. And that gets back to the language of business, you need to be able to show your MRR your monthly recurring revenue,your ARR neatly and cleanly. And automation, like automation,lets you see that fast. Right.If you if you automate it, you can accurately and cheaply get the answers that you need to put into your board deck without a lot of headaches every month scrambling to prepare for that meeting, if that makes sense.
Matt Wolach: 9:31
Does I am always freaking out before that board meeting. I'm sure other leaders are as well. So tell me so you mentioned automation. So what exactly are we doing in that automation? Why should I mean,you talked about why we should but I mean, that seems like something everybody should be doing. Why aren't people doing it more?
Jesse Rubenfeld: 9:50
You know, I think there's a fundamental so this is tricky. There's accountants and there's developers I don't know, many accountants have had the experience of, and many non accountants have had the experience of implementing a large software package like an oracle or an SAP or something like this. And a lot of times, a consultant will show up, you have, there's an implementation experience. And you're supposed to get it all working in done during that implementation, and you have more tech type of people doing the implementation.And in our world, you have accountants that are the users that have to get value out of the implementation. And there's a fundamental disconnect between those two groups of people that on the surface accountants and engineers would seem to have a lot in common take than optimal.We try to build a culture to build accounting engineers,right accountants that code to try to bridge that gap between the users of the software and the creators of the software, to try to avoid some of what otherwise is inevitable, which is sort of a mismatch between what you implement and what the users need. So that's a unique advantage for us, we can build an out of the box solution to handle some of the more complicated accounting problems of which accruals is one. So in short, it's about the accountant dash coder.
Matt Wolach: 11:27
Okay, okay, that makes sense. Switching gears and focusing on your own business and how you guys are, are growing, I want to talk about that, because you just mentioned that, that there are different stakeholders, and you've got these accountants, you've got the engineers, you've got probably the executives, they all have different reasons of why they might or may not understand why they need to work with you infant optimal. How do you approach that? How do you get the accountants to realize this? Or this? Or how do you how do you make sure everybody is on board so that they sign?
Jesse Rubenfeld: 11:59
You know, it's a great question. We try to take a consultative approach, a lot of solving people's problems starts with listening. Right?Our head sales guy is a CPA,first, who can code that's me,I'm the CPA, the sales guy. But even even our director of growth, the person who's charged with getting accounting firms,and with other getting
Matt Wolach: 12:30
direct, like small and medium businesses on board,using our products and services,is a CPA. We think it's important when we talk to prospective clients to listen to the problem. They're different.Everybody has different problems. It's not one size fits all. But it's about we we first tried to understand the pain.And then we tried to say here's some solutions that might work,given the right, twisting of the dials, if that makes sense. It does. I love that. Right configuration. Yeah, for sure.And that's something I definitely work on with my clients a lot because everybody faces this, or many people do where you're selling to an organization. And there's different types of roles in that organization, they all have different desires and needs. And so I'm loving that, you know,you're mentioning you focus on the pain. And that's one thing I coaches focus on the pain of each individual role and each person because that CEO cares a lot differently about different things then that accountant does. And same thing with anybody else you might be selling to. So I bet you go through that. And you you help
Jesse Rubenfeld: 13:33
people select software products that are going to solve their problems, right.That's often one of the things people are hiring you for, do I correctly understand that?
Matt Wolach: 13:41
I help them understand how to sell to those so they can sell their product more. So I coach them on the sales process and how to make sure that they're getting people to understand their pain and know that they need a solution to that pain.
Jesse Rubenfeld: 13:54
Ah, understood.Okay, got it. What is the biggest pain in accounting for you, or that you hear your team complaining about?
Matt Wolach: 14:06
I think a lot of it is you just don't know where you stand at any one moment. When I think of my SAS company. It's like, where are we on our cash situation? Where are we with this? What decisions can I make?As a CEO? I want to know, are we able to do this or not? Is this an initiative we should start?How's it impact us? I think all those things are critical.
Jesse Rubenfeld: 14:26
How long does it typically take to figure that out? As you're close? It's I'm guessing there's some kind of closed cycle, right?
Matt Wolach: 14:34
Yeah, yeah, for sure. I mean, it depends on what we're doing. My partner is the CFO, and he's usually pretty good about it. But of course it was you need that decision super fast. And it's hard for him to understand totally.
Jesse Rubenfeld: 14:48
Right. So our goal is to try to get those questions answered as quick as possible, ideally, without us in the loop. That's sort of the problem that we're trying to solve. get you prepared for that board meeting. With as little you know, human work as possible except to look at what you're going to present through a strategic lens. And you want to try to have confidence that all the little pieces that go into that, you know, summary graph that shows the hockey stick, you know that you understand that the numbers behind that are prepared, you know, artfully correctly, efficiently. That's what we're really trying to solve for
Matt Wolach: 15:25
quickly. And so automation is helping to kind of speed it up and eliminate manual steps. Is that right?
Jesse Rubenfeld: 15:31
That's right.That's right. We think 80 90%,right, like booking that deferred revenue from the from the year contract. If it's a year contract, you've got to book at least 12 accounting entries, one for each month that you actually have to recognize that one time cash flow and your MRR. Right? So for that, by by that metric, we're saving over90% of the time, because you're now just booking one entry. That tells you that you you tell QuickBooks, hey, this is a 12month contract. And then Finn often will just books all the rest of the entries. So you saved booking 11 entries right there.
Matt Wolach: 16:08
Wow, for each contract. So So when does a software company need something like this? When do they know that they need fit? Optimal?They need outsource, when? When should they be doing that? At what stage?
Jesse Rubenfeld: 16:22
That's a great question. Obviously, every company is different. I think when they find themselves spending more time than they want to getting ready for that board meeting. And in particular, figuring out what's my MRR right? Oh, we've got this really chunky June. And this really slim July, like, these are 12 month contracts, I need to be able to express this quick quickly and clearly what is our MRR, we have 30 contracts, I don't want to do a deep dive into Excel and have to build this model, you kind of just know when you want to have that automated. Because you're you're spending too much time in that in that preparation cycle, which means that the monthly close is either not happening at all, or it's happening too slowly. The need can start from the accountant who's tasked with doing the fire drill to help you prepare for your aboard, hey, I don't want to do this anymore.There's a better way, there must be a better way. Or it might come from the business owner, or from a senior manager who says I can't wait this long, there must be a better way. You know, how are you showing me how you're doing this curly? Are there any products out there? That could reduce this time drastically?Oh, yes. Yes, there is. There's the occur.
Matt Wolach: 17:34
Awesome. And in terms of your company, I know that you you mentioned you had a great idea to get it started.But what are some of the best lessons you learned along the way, Jesse, that helped you get to where you guys are now.
Jesse Rubenfeld: 17:48
Let's see, I think it takes a lot of confidence, to know your strengths as a person and as a company. Because there's a lot of suggestions coming your way from your customers, your investors, your employees, your friends, that tell you when it's time to quit your day job, who you should sell to how you should sell to them what you should build. And, you know,know thyself is being able to follow your own lights, hear others and incorporate suggestions, but not get derailed by every opinion that sounds well informed.
Matt Wolach: 18:32
I think that's super great advice. I hear that a lot. And a lot of people come to me when they're wanting help.And they say, Listen, I'm hearing from here to do this.I'm hearing from their this, I just saw this on Twitter, I just read about that. And it's like they're so overwhelmed with here's what you need to do is that they want one voice who's been there, done that just to kind of guide them and show them just tell me what to do. And I'll just do that. As a leader.Sometimes we feel lost. Without that we don't we're kind of wondering, should I do this?Should I do that? And having that guidance is just so critical. I think that's why so many CEOs take on mentors take on coaches, because it's so nice to have that sounding board and that guide to kind of Shepherd you along the way, right?
Jesse Rubenfeld: 19:18
Well, I'll tell you what, Matt, we've been selling services for eight years and software for one month.Maybe we can ask for a little pro bono tip here. What's the biggest piece of advice you would give to us to me as we start selling a software product?
Matt Wolach: 19:35
Yeah, I switch some switch from services to software is definitely intriguing and interesting. But what I would really want to know is I'd really want to understand the buyer. And I'm sure you guys have had enough conversations to know that I really would want me and my team to get in and truly understand why they need this versus the service. We're both together. And I would have 304050 conversations with different current customers and maybe potential new buyers to really understand, hey, what are the big challenges and not say, Hey,would you like this? It's more of what are the pain points like we talked about before? What are the challenges? What are your goals? What are you trying to accomplish? And where do you want to be? And what what do you feel is going to prevent you from getting there. And really understanding them will help you develop a product to where it needs to be able to help you develop the messaging and the marketing to help you develop your sales process and pitches.It kind of feeds everything,just knowing the buyer. And so I know you probably with your eight years experience of the services, you probably have a good understanding of that. But I would still want to go back and really level set with them and understand outside of the services, what else can we solve using this, this tech this tool now?
Jesse Rubenfeld: 20:48
It's super helpful. Thank you, you know, I can imagine, in trying to keep what the buyer wants top of mind, I could easily become, I guess, entrenched in a certain way of thinking, having sold things, having done things a certain way for so long. I can imagine how having a coach could help focus my attention on things that I might not be thinking of or might not be emphasizing enough. When I think about that ideal customer profile, how to find them how to sell to them. I'm a big fan of,you know, consultations of that nature.
Matt Wolach: 21:25
Yeah, in fact, it's funny, you bring that up, but we did a study. And basically what we looked at was reps who are like sales reps who are newer in their role. They understand what they're doing, but they're still newer, and sales reps who are have been doing it for a long time. And what we learned was,the sales reps that have been doing it for a very long time,did much worse discovery, their discovery process was far worse than the newer reps. And the reason is, is because they feel like they've seen it all. So they already understand what the people are going through, they already understand the challenges that the market on the whole has, and probably likely after they start the conversation, they start to identify quickly what that person in particular is facing.The problem is, a lot of people don't understand it, and the sales reps were experienced still don't understand it.Discovery is not about us, it's about the buyer, the buyer needs to go through that process, the buyer needs to understand their pain on a deeper level, they need to understand their struggles and why it's bad that they're facing this right now,more than just us realizing this is a fit for us. And too many times we say Oh, it's a fit,check, let's just move on. And experienced sales reps understand that it's a fit quickly, because they know it,but they need the buyer to get to that point much better. And so that's something that we've learned. And so hopefully, for you who understand your market really well and understand your buyer, getting to back to realizing it's not about what you understand is what they understand is critical.
Jesse Rubenfeld: 22:50
It's very interesting, it makes me think of the curse of knowledge. Once you know something, it's a little bit harder to step into the mind frame of somebody who might not know it. A great book I read, called I can't remember who wrote it called the Challenger sale talks about how the sales experience talking to someone talking to a fun,optimal salesperson about the recruiter should give the audience some value, they should learn something during that meeting unrelated to whether they buy our product. And our experience has shown also in selling services, that if people learn something, as part of one of our discovery calls, right,we're trying to get information about them to see if they're a good fit for our products or services. But in talking through that, if they learn something,we find that that really strengthens the prospects of making a sale there. So we're always looking for ways to get better at listening. And understanding what our customers want.
Matt Wolach: 23:56
I love it. I'm glad you are in the Challenger sale is Matthew Dixon and Brent Adamson. And that's a required reading for my for my clients.So I'm glad you brought that up.Because it's absolutely critical. If you're going to be selling something, you got to know the theorems within that.The only thing that we coach around it, not the only thing we coach a lot of stuff around it,but we coach that but also, they don't go deep on Discovery,which we just talked about is absolutely critical. But if you understand the Challenger sale and the reasons behind it, it's going to help you sell really quickly. So I'm glad you brought that up, Jesse.
Jesse Rubenfeld: 24:30
I'm glad we're on the right track.
Matt Wolach: 24:31
Yeah, no doubt. So as we wrap up, what advice would you have for software leaders and founders who are kind of just getting going? What can you share with them?
Jesse Rubenfeld: 24:43
I would say think about your business as a financial package. Look for ways to more clearly articulate that financial package without having to do a ton of work. Which means make sure that your accounting team or your CFO if that's who's doing it because you're just starting out is you Using accrual accounting, and you're gonna have a better time raising money and talking to your board,and even telling your employees how you're doing.
Matt Wolach: 25:11
Love it. Very, very cool. How can our audience learn more about you and Finn optimal?
Jesse Rubenfeld: 25:18
Follow me on LinkedIn, Jesse rubenfeld, go to fin optimal.com book a demo for the recruiter. And we'd love to learn more about you.
Matt Wolach: 25:29
Okay, very cool.And we'll put all that into the show notes. So if you're listening, you'll be able to check that out. Go grab that.But this has been great. Jesse,thanks for coming on the show and sharing all your wisdom.
Jesse Rubenfeld: 25:38
My pleasure.Thanks for having me, Matt.
Matt Wolach: 25:41
Absolutely.Everybody out there. Thank you very much for being here. Don't forget to subscribe so you don't miss out on any other amazing leaders like Jesse, you want to get those sessions. So thank you very much. We'll see you next time. Take care.
Intro/ Outro: 25:55
Thanks for listening to Scale Your SaaS for more help on finding great leads and closing more deals. Go to Mattwolach.com
