E12: Finance roles are changing drastically - with Gabby Marasco

‍Albert Gozzi (00:02):Hello everyone, and welcome to The 10x Finance Podcast, where we dive into the real challenges and opportunities shaping modern finance teams. I'm Albert Gozzi, co-founder and CEO at Aleph. Today I'm joined by Gabriella Marasco, Director of FP&A at Applause. Gabby, it's great to have you here. Are you ready to jump in?

Gabby Marasco (00:26):Yeah, let's do it.

Albert Gozzi (00:28):Alright, you know how this goes. We'd love to hear your hot take.

Gabby Marasco (00:33):Yeah, I think my hot take is just that the finance leadership role is, I don't want to say dead, but different. Changing drastically. I think we're going to be building instead of buying as much. What we're doing is going to have to look a lot different in how we do our jobs.

Albert Gozzi (00:52):We'd love to unpack a few of those things. The first one, of course, as someone who's the CEO of a SaaS company that sells to finance teams, I want to go into the build versus buy. And maybe I'd take it the other way on some pieces. What are the things that you think are going to go more into the build versus what might still be in the buy category in this new way of doing finance?

Gabby Marasco (01:20):Yeah, I think Aleph actually posted something that said 70% of businesses are still in spreadsheets in terms of accounting and forecasting. That's the piece that's just ripe for the opportunity to build. We're seeing even $100 billion ARR businesses still in spreadsheets, and I think it's time to change.

Albert Gozzi (01:45):Alright, so there are some things there with tools versus spreadsheets. Where are you seeing this change more, where people are maybe building more than on the other side?

Gabby Marasco (01:57):Yeah, I think it's all the pieces that go into the larger ERP infrastructure or CRM infrastructure. I don't think people are going to be building their own ERPs from scratch in the cloud, but all of the pieces that go into it: how you manage your individual support workpapers, your schedules, how you connect your ERP to your CRM and your other data sources, whether you have usage data or things like that. All of that data infrastructure layer across your business. My take is that I see finance taking a much more prominent role in building that context layer, which traditionally has been more of a developer, engineering, or product function. That's where I see the biggest shift, for sure.

Albert Gozzi (02:44):That's one I can get behind. The question I think is interesting is: do you think it's the same people who need to acquire those skills, or do you think it's a different profile? There have been conversations around finance engineers. Is that a finance person who becomes more technical? Is it people coming over from different industries? Where do you see this going?

Gabby Marasco (03:12):It's tough. I don't want to put people in a box. I think you need folks with the curiosity, the creativity, and the willingness to get in the weeds with data. That profile suits a lot of more traditional finance and accounting background people, but I don't know that all of them typically have the passion to be creative. The creativity piece is huge for a lot of what we're doing, because you're not just building a one-size-fits-all solution, you're building a specific tool or agent or solution for your business, and you really have to have a thorough understanding of all the inputs and how everything fits together. I don't know that everyone wants to be that person and get into that level of detail. Some people want to come in and have more task-oriented, directional work.

Albert Gozzi (04:04):If someone wants to be that person, what are the things you've seen work for getting started? You're a finance person, you're curious, you see the world going that way. What has worked for you and your team?

Gabby Marasco (04:20):At least in my role now, I'm pretty new to Applause, here less than six months. I had to come in and was handed a financial model that was inherited, and I had to understand how it works. Part of trying to understand how the model works is understanding how the business works. The mindset is just asking why. Understanding all the parts of your business: revenue drivers, cost drivers, how your customer is using your product, what the pain points are, what the profile of your customer is. Even product developments: how are new features being deployed impacting the way customers are changing their usage behavior? Coming from a small startup, Series A, something like a new feature being deployed can completely change the way a customer is engaging with your product, everything from usage to volume.

Albert Gozzi (05:15):It sounds like, which I agree with, the way you do it might be very different, but the fundamentals are still the same. Curiosity, understanding the business. Would you agree with that?

Gabby Marasco (05:28):Yeah, absolutely.

Albert Gozzi (05:30):When you think about the role, there's a lot of AI involved, a lot of technology, and the tools you and your team are using. Is there anything you're surprised by, something you maybe wouldn't have expected to happen?

Gabby Marasco (05:50):Yeah. My biggest wow moment, where I really had the "AI is going to disrupt everything" realization, was when our business started using Hex. It's an AI, I think it's an AI wrapper, don't quote me on that, but it lets us connect to our internal database. Previously, that was really hard to query. You had to work with an engineer. We had some Heroku data clips set up, and it was clunky to pull data in a timely manner. Through Hex, I was able to query with just regular language. There are some risks there, you need to understand what you're querying and how you're asking, but from doing that, I was able to pull all this product data, usage data, customer data, and start forecasting based on the events or activities a user or customer was doing. For a small business, that type of power hasn't been unlocked before, until now.

Albert Gozzi (06:53):Yeah. And what's interesting is that lowering the bar to data makes all the part you mentioned about curiosity and really understanding the business more important. Data is no longer the blocker, and how curious you can be about it becomes more important.

Gabby Marasco (07:10):Yeah, absolutely.

Albert Gozzi (07:13):What are other things you think will change in the way finance teams work?

Gabby Marasco (07:19):One other example: we just went through this pricing exercise. Before, you're building these models, putting in inputs, seeing the impact to your existing customer base or some other criteria. I was able to test 20 or 30 different pricing models in six hours. This is something that would have taken a month, maybe, to do the same level of math and model building in an Excel spreadsheet. The time to do analysis is seconds now, so the amount of analysis and data and insight you can aggregate to make informed decisions is shocking. That was where I was just so disrupted, shocked, and fascinated by the access to information.

Albert Gozzi (08:08):A lot of people in the audience are probably thinking, "I'd like to run 20 analyses or 20 scenarios at the same time." How do you go about it? Are you using spreadsheets, are you using Hex and building something, a smaller version, a smaller iteration? Let's double-click and go a little deeper.

Gabby Marasco (08:28):Yeah. It started in spreadsheets and slowly moved to Hex because I was querying database data. Things like number of users, user types. We were looking at user pricing and other variations, usage pricing as well. I had this giant dataset of all our customers, and I was just asking it. I have my Whisper Flow going, so I'm talking to my computer, talking to AI all day. I spend maybe 15, 20 minutes giving it context: here's everything about my customers, here's what these events mean, here's our current pricing, here's what's working and not working. Then I was just like, "What other ideas do you have?" Like I would with an analyst or someone else on my team. What ideas can we try? Let's try this. Show me a sensitivity table with all these different prices. Show me where the breakeven is. These are things that, when you have to build those iterations manually, take a lot of time, even though that work isn't valuable to do the build. The slow, discussion-based context layer is huge. Everyone says that, but it's so true. The more you give it, the more is more, like always.

Albert Gozzi (09:53):And how do you think about, you're clearly pretty deep in there, you're iterating. To what extent is it important to enable the rest of the org? I imagine if you're working on a pricing change, you're probably working with someone on the go-to-market team. Do you see the role of finance being that intermediate layer? Or do you want to train the go-to-market leader to be able to work the same way? How do you think about that?

Gabby Marasco (10:26):That's a good question. From my perspective, given where our business is at, we're facing so much pressure to be more efficient, to run leaner teams. That's not just finance, that's across the business. We're seeing it in engineering teams, in all facets of the business. From my perspective, I do think we need to be pushing that mindset to all the other teams. I feel like the train is on the track, the train is leaving, and it's either get on or get left. Companies are not going to be able to get investment if their metrics aren't improving. The expectations from investors are changing drastically. Growth and retention and good margins are no longer the only requirements, it's efficiency and burn as well. The only way to do that is to get more efficient at your job, and the only way to get more efficient at your job is to use technology to take the manual work and make it less manual.

Albert Gozzi (11:30):Gabby, this has been great. I know we want to keep these episodes very short, so if you're ready, we'd love to go into our rapid-fire wrap-up.

Gabby Marasco (11:40):I think so. Let's do it.

Albert Gozzi (11:42):First question: what's one mistake you see finance teams make over and over?

Gabby Marasco (11:50):Over-indexing on historical data.

Albert Gozzi (11:55):Alright. What should they be indexing on instead, or in addition?

Gabby Marasco (12:04):It goes back to what we talked about: business context. You need to be in the weeds of what's happening with your product, what's happening with your customers, and how that's impacting the numbers. Right now, things are changing so quickly that there might be offsetting changes where historicals don't show the full picture anymore. Change is too fast to keep relying on monthly data.

Albert Gozzi (12:32):Makes a lot of sense. What's one piece of advice you'd give other finance leaders who are scaling their team?

Gabby Marasco (12:42):Don't scale your team. No, if you have to scale your team, expand your mind of what you need. Creative, curious, problem-solving people. More of this generalist background, data-oriented people. The traditional profiles are going to struggle in this more innovative, fast-paced environment, for sure.

Albert Gozzi (13:12):What's one trend in finance and accounting that you believe will shape the next five years?

Gabby Marasco (13:20):One trend...

Albert Gozzi (13:25):You're allowed to say AI, but if you say AI, I'll need to ask you to go one level deeper than that.

Gabby Marasco (13:33):One trend... I'll go back to it. Finance forming the data layer. That's a huge shift, for startups especially. Finance being more involved in connecting your siloed data sources: your ERP, your CRM, your database. Huge shift.

Albert Gozzi (13:58):Makes a lot of sense, and very aligned with what we're doing at Aleph, of course. So I'd have to agree with that one wholeheartedly. Gabby, it's been a pleasure to have this brief chat. Thanks for coming on.

Gabby Marasco (14:15):Thanks for having me.

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