TRANSCRIPT
ALEX: This is Alex Hamm from MainstreetMix.com. Now, today I have a very special guest. His name is Mr. Bob Weis and he is the founder and CEO of a company called CFOs2GO that is a consulting and staffing firm that provides financial and accounting talent on an as needed basis for companies of all sorts. He started this way back 1986. How’s it going Bob?
BOB: Very well, good morning
ALEX: Great to have you here today. So what’s a little background on you and what let you to start your own business?
BOB: Well, when I first got out of school, I went into public accounting and after that I went into a venture capital experience. Both experiences, while they gave me great training, were not really resonating for something that I wanted to do on a long term basis. And so, I took a little sabbatical of about 3 months, traveled, and wrote the business plan for CFOs2GO while on a trip to Australia of all places. And the reason why I wanted to start CFOs2GO, was really to– primarily I wanted to create the opportunity for myself (at the time because I was the CFO of CFOs2GO way back then) where I could acquire skills as quickly as possible. When you are in your twenties and thirties –and I was in my mid thirties then– it’s fairly… my strategy then and my strategy today would be that kids in that age should try to learn as much as they possibly can so they have valuable skills as they become in their 40s and fifties and such. And that’s what I was looking for– an opportunity to gain skills, valuable skills and some degree of a reputation for it.
ALEX: Ok. So what is exactly that gave you the idea to start a business that provided other companies with temporary chief financial officers.
BOB: Well in venture capital, particularly back in ’86, it was a novel idea. But there was a need when you provided capital to a young company for the company to have a senior finance person, not necessarily only an accountant. That need, while prerequisite, was not full time. And I saw enough of those companies that were getting started and were given 4 or 5 million dollars, and yet were trying to do it with just an accountant. And when you are still trying to figure out the markets and what your product is going to look like and how they are going to relate to each other, there is a great deal of planning as well of fundraising and understanding the relationship between the two is a valuable skill to have onboard. And when I looked at constituting CFOs 2GO, it was really about constituting that position. My initial clients were probably all venture-capital backed, all part-time positions and I probably had about a half dozen of them at any one time.
ALEX: Ok that sounds like a pretty good reason to start it. You definitely saw an opportunity and pounced on it.
BOB: And as it matured…it wasn’t embraced by all because it was kind of novel at the time to actually have three or four or five or six clients at one time. But now it’s become kind of an accepted practice. Virtually every VC-backed company has some person who fills that position. I think what CFOs2GO has done over the years is develop a model that is not just a consulting CFO anymore. We have – because of our affiliation with Accountants2GO – the ability to build teams, so now if I go into a VC backed firm, I may place an accounting manager in there to compliment my skills so I that don’t have to spend time doing accounting. I may put a controller in there; I may even just put a bookkeeper, depending on where the company is and what the requirements are. The concept to be absorbed is that now CFOs2GO is more of a solutions provider that includes the part-time CFO or consulting CFO, not just the consulting CFO. And I think that’s is the value proposition that comes through CFOs2GO today
ALEX: Ya I can see that. I was doing some research on your website and it’s definitely grown quite a bit. I like how you say you can provide teams now and it’s not just one individual part time person, but you can actually provide a team for a company. It sounds like you can provide a lot of value for any company.
BOB: Yes, it’s any company. It now gets to where not only are we relevant in providing that early stage or an emerging growth kind of a stage solution, but ultimately we are actually hiring our successors. In the sense that some of the companies that I’ve worked with, I’ve actually over a period of a couple of years, built out their entire departments, from bookkeeping to accounting to credit and collections to a controller and then ultimately the CFO himself would be hired. And we would be providing those people through our CFOs2Go and Accountants2Go service centers. So there is a real business solution that’s being applied here that allows CEO’s to basically outsource the development and the maintenance of the finance and accounting function and as long as there is a good relationship between the CFO and there is a trusting relationship that part of the business can be kind of taken away as part of a continuing concern and allows the CEOs to pay more attention to the engineering or the marketing and the sales areas of the company
ALEX: Ya I definitely see how that is. You guys definitely seem like you are providing a [solution.] You see a need and you are providing a solution for it. Now, have you ever owned any other businesses besides CFOs 2GO?
BOB: No not in a controlling way, I certainly have invested in businesses.
ALEX: OK so CFOs2GO was the first one that you started and you are still with that today, correct?
BOB: YES
ALEX: Ok so what was your biggest obstacle to getting started? Was it maybe getting funding? Finding the right people to help you out? Or –
BOB: You know, I kind of lucked out in a sense that I was fortunate enough to get a fairly good client within the first three months that was to be one of the faster growing in the United States at the time. So I really got an opportunity to not only kind of proof of concept in terms of what my thinking was but also it developed a source of income. Professional services is not something that has a high capital expenditure requirement, it’s a knowledge based business and so you know if you came to our offices today and they are nice offices right here in walnut creek but you know, its computers, people, it’s some desk and a conference table, things like that. So in terms of obstacles and the traditional way of looking at capital as being a obstacle, that wasn’t it. I’d say the obstacle might have been just acquiring the talent to make the service as distinctive as possible. This is a national offering now and so that means that we are placing CFOs part time or otherwise, all over the United State. And that’s not an insignificant accomplishment, it takes a good number of years and a lot of phone calls and meetings and interviews and placements and engagements so that people on both sides. First of all the recruiters know the skill sets and can trust the skill sets and competencies and the integrity of their placements. And so when we place someone outside of the bay area, we are actually confident with the outcome.
ALEX: Ok so it sounds like you are saying the toughest thing was building the right relationships.
BOB: Yeah I think so. The other thing that comes to mind also is that we were an early example of distributed work force. In that sense, we have two offices, and we serve a lot of clients with two offices, one is San Jose and one in Walnut Creek. The rest of the offices are the home offices of consulting CFO’s which we see on a quarterly basis when we have partner meetings and/or every Monday morning when we have our business development phone calls, so people are phoning in. So one of the accomplishments that had to be made was the technology, we had to have not only an ERP system that could manage the relationships on a customer standpoint (as an example, where we are right now with Salesforce.) But, we also had to have a mechanism… that would manage [employees’ and consultants’] relationships. In both cases we have now, it’s on the cloud and it’s completely web enabled to work cooperatively together.
ALEX: That’s definitely the right thing to have. What I like the part having good relationships and meeting the right people to get good people on board because I think that is undervalued in today’s world. We don’t really look at relationships as the most vital thing in a business. What I have seen and what I have learned is that you need to meet the right people to get ahead.
BOB: Yes and I think there is, we have organized our business over the last couple of years with practice groups so there is a non-profit practice group, there’s a manufacturing and a merger and acquisition and a variety of those types of things. And the one I lead is the international, and it particularly demonstrates what you just said. The people whether they be in Europe or Australia or New Zealand, when we first meet each other or even when we are being referred to each other, there is kind of a dance that goes on for a while as you kind of try to figure out how trust worthy this person is. I think trust comes in two flavors, in the sense that first the person has to be competent in terms of what you need them to do, but then he also needs to be integrous in terms of when he says he is going to do something; he’s going to do it. And as you begin to trust people, you assess that, is he competent and is he integrous? In professional services, I feel it’s very, very important, I’d say crucial, that you have the underlying trust of the person that you are working with.
ALEX: Yes that’s definitely real important. And I can see how that’s especially important in the industry that you are in. Now what are some of the challenges that you must deal with on a regular basis? Is it just having to communicate with all over world or consultants that you don’t see every day? What are some of the other the challenges that you have to deal with?
BOB: I think my challenges still have to do with the fact that we are entrepreneurially run. In professional services company, no matter whether you are in a law firm or CPA firm, the executive support seems to be thin. My challenges are that there just doesn’t seem to be enough hours in the day to deal with the non-client related issues. We do an awful lot of the marketing types of things, where we are doing webinars, white papers, we are trying to make a blog on our website that is useful to our clients and useful to the community of business people that take accounting and finance seriously and know that it’s an integral part of a success business. We are trying to find different ways to contribute there and one of my challenges is that.., well you are interviewing me on a Saturday and it’s not by accident that I asked that we do this on a Saturday, it’s literally that I do not have any time to do anything or the things I was just talking about in order to get my work done. You would probably get the same answer from everyone, that it’s just time. In the final analysis is you can make more money, you can make more products but unfortunately you can’t just make more time.
ALEX: Yeah I don’t think you could have said that better. Actually to tell you the truth, that is the first time that I have gotten that.
BOB: Oh really?
ALEX: Yes actually most people usually think harder to think of some elaborate challenge that they had. But you kept it simple and said you just don’t have enough time in the day.
BOB: Yes, it’s amazing, I mean I’m sixty years old and I’ve been on a plan for a few quite years now in which to develop the autonomy and infrastructure so that I could produce more autonomy for myself and more leverage for the business. I mean I don’t say that lightly, I mean I have created more time for myself however I haven’t created enough time for myself. It is the one metric or commodity that just doesn’t seem to ever have enough.
ALEX: I can definitely see that. What seems to be the most fulfilling part of your business?
BOB: Two things, one, the obvious thing, the original reason for starting this thing was to develop valuable skills and to give myself the opportunity to work in an environment where those skills could constantly be changing with the market place, so I’m not a static group of skills. That’s been an enormous fulfillment for me. I think I have accomplished a good deal in that regard. The other is that the company and the configuration in how it was organized has provided a similar thing for other people that are willing to take on the challenges that being a consulting CFO in this market requires. The challenges are considerable, you work hard, it’s quite a few hours, and you have to bill your hours in order to pay the bills, but you still have to take on other concerns within the industry. As I mentioned before, we have various mechanisms in which thought leaders and our partners can present whether it be in a webinar or seminar or white papers or whatever. So it’s given me a great deal of fulfillment that the people who have come on board and become partners with us have been able to design valuable practices for themselves.
ALEX: I can see how you have helped other people develop their goals so I can see how that is fulfilling
BOB: There is an opportunity to see clients succeed. I can’t get too specific on this but I have known people who were virtually penniless and through hard work, god-given smarts, and resourcefulness have reached their wildest dreams. It gives me a great deal of fulfillment to be associated with these people whether it’s as their consulting CFO or as the person that introduced them to their full time CFO.
ALEX: I can see that. That’s something that people going into business for themselves wouldn’t look at as a reason for going into business – helping other people achieve their goals and stuff – but it’s definitely one of the main fulfillments that probably later on you are going to realize that wow I really helped this person achieve their goals along with achieving my own goals.
BOB: Yes I think that is the basic business ethic is that you try to find an organization in which the only way you win is with them winning or vice versa. If you can put something like that together it is very fulfilling and I think we have. We aren’t trying to put a full time CFO in where a part time would be fine and we aren’t putting a part time CFOs in a business where a bookkeeper would be fine. We are set up to where we are pretty agnostic in terms of the solution we are just here to try to design and execute the solution. Then it’s our expectation that company will succeed and when they succeed then over time they will require more and more of our services.
ALEX: Yes I can see how that works. You guys seem to have a sense of honesty and I give you guys props for that.
BOB: I appreciate that Alex:
ALEX: Now to finish up here, what do you think are the most important traits to being a successful entrepreneur? Just off the top of your head if you can give me anything?
BOB: First thing I would say is just a work ethic. I think entrepreneurs need to be hard working. I don’t think there is any shortcut around that. The second thing is that entrepreneurs need to have some story around continuing education and continuing to learn. I think that the situation where it’s a global and changing economy, I think that if entrepreneurs and people in general don’t find some way to integrate continuing education and continuing improvement in their careers will find themselves sooner or later at a point where their anachronisms are irrelevant in the marketplace. In addition to that I think we are looking at a person who is resourceful and they relate very well to their clients and what would be valuable to those clients
ALEX: That resourcefulness is a first I have gotten for traits. I am curious about the future of your business are you going to go into more into accountants, CFOs and its?
BOB: I think we are kind of standing pat on that one for the moment. We are looking at how we can collaborate more strategically with others so we can be providing more to particular customer groups that we are dedicated to. For a moment let me go back to, I said I lead the international practice group. So after you have helped enough people – I have been doing this since 1999 with just the international group – people start to come to you for a lot of different things. So when the typical company that comes over the US is trying to set up their sales and marketing offices and so the notion for recruiting for their sales and marketing, they are looking for somebody to help out in their sales practices and their sales planning. I am looking to affiliate and partner in a more formal way with groups of cross functional experts that can relate to foreign companies coming into the US.
ALEX: So again you are working toward creating that team solution more.
BOB: Yes and if we can it kind of lowers the cost of entering the US for these foreigners and there are very interesting stats on this. Some of them are; of the VC-backed companies that went public, I think it’s around 25% were founded by foreign owners. And when you look at valuations today of the companies that were VC-funded and went public, 40% of the valuation is represented by those companies that were founded by foreigners. So foreigners have and will continue to play an enormous part in the Silicon Valley and entrepreneurship picture. If we can at CFOs2Go provide a mechanism in which not only for those types of people to grow their businesses faster and more effectively and with less cost as it relates to finance and accounting and such, then that work for me.
ALEX: Well I wish you guys the best in the international group because based on those numbers I can tell that that will bring a lot of growth to your company.
BOB: Yes I think it will. Also there are US companies wanting to go overseas, we do that as well so I want to make sure that we continue to develop the skills to not only help them in accounting and finance but in other areas as well.
ALEX: Yes I can see how that’s going to provide them with a lot of value. Well Bob this has been great and I think a lot of the listeners are going to get a lot out of it. I know I learned a lot I want to thank you for taking the time to meet with me and share with me you thoughts and expertise. Is there anything you would like to finish up with before I let you go?
BOB: No that’s fine Alex. Thank you for the opportunity.
ALEX: Thank you very much.
BOB: You take care.
ALEX: Alright, have a good day.