The CFO-COO Is Coming: Meredith Finn of Front on the Future of Finance

0:00You have both the CFO and COO dual mandate, which we're seeing more and more often. What does that dual mandate look like? It's actually quite like if you're building a house, being both the architect and the general contractor. The CFO is the architect, right? Really drawing those blueprints, estimating what the cost is going to be. But it's very conceptual. It's very much on paper or in our world in finance, very much in spreadsheets. Whereas the COO really needs to like take the blueprint, take the budget, buy the goods and then figure out, you know, how they're framing up the walls, how they're putting up the sheetrock.

0:37And so I think the dual mandate, what it does is really bring those two perspectives together as you think about building the company. so that in one role, you've got the same person who's thinking about drafting plans, right? Drafting those blueprints, putting the budget together, thinking about the headcount that will be needed to execute on something. That person ends up being the same person in many cases who is then implementing those things as well. Is this thing on? Yesterday's price is not today's price.

1:19Hey, are you liking this show right now? Do us a favor and we'll do you a favor. Share a link to the show on Apple or Spotify with your team at work. Drop it in a Slack or God bless you if you have to use Teams, throw it in there too. But send a picture of you dropping the link in to Ben at MostlyMetrics.com. That is Ben at MostlyMetrics.com. Our creative dictator will hook you up with some Run the Numbers swag. Welcome back to Run the Numbers, the show that I forgot what name it was. Now I'm on my third take. I interview the world's top CFOs. Today I'm talking to Meredith Finn, the CFO and COO at front.

1:56That is six letters combined. We talk about her dual mandate and where her two jobs are complementary versus in conflict. And honestly, if we play it forward 10 years, does the COO role even exist anymore? Will the CFO have eaten it for lunch? We discuss. This was a fun episode because we talk about funding new bets inside of mature SaaS companies. Many of you listening work at companies that were born before AI, and Meredith talks about how they're incubating new AI-driven bets within her company. And they've successfully re-accelerated growth, so it's a cool playbook for that. And finally, we talk about budgeting for AI token costs.

2:32What will the CFOs do about all of these Claude bills? They're really piling up on my desk. She has a couple of frameworks that she shares, and it's amazing. All this and much, much more. Let's get into the interview. Meredith, thank you so much for joining the podcast. Thanks, CJ, for having me. It's great to be here. I feel like I'm talking to a podcast pro because you have a podcast studio in the front office. It's amazing. I don't know if that makes me a pro, but our marketing team is definitely a set of pros and designed this beautiful podcast studio right in our offices. I guess us CFOs would classify that as a CapEx build-out.

3:09We capitalized the camera and lighting setup that we've got going on here. I guess to open up here, I was trying to do some timelining. And it looks like you actually met your CEO, Dan, when you were still an investor, Meredith. And prior to becoming an operator, you made more than 50 B2B investments in companies like Pendo, Action IQ, and Twilio. So I'm guessing you're the type of person who takes an investor lens to your own career steps. What was your personal investment thesis to take the role at Front? I think that's right. You know, I think I naturally look at everything through an investment lens and really am focused on like three things in particular.

3:50So what market opportunity a company is going after, the people that are involved in it, the product itself, particularly for a technology company is really important. And I think as I assess the opportunity at front, I saw all of those things. So from a market opportunity perspective, we are going after an incredibly large market, the customer support, customer operations market, where there is near term known applications of AI to automate parts of or all of, in certain cases, those workflows with customers. And so was really excited to be in a segment of tech today where we're really on the cutting edge and looking for those opportunities to bring AI to increase customer productivity and output.

4:42From a people perspective, as you said, I did know Dan before. Dan was really early to thinking about applications of AI to customer support with his company TalkIQ. TalkIQ sold to Dialpad. He was a senior executive at Dialpad, focused on the customer support space for over seven years and really helped scale that business to 300 million. So really coming in with such an experienced seasoned partner who has a great understanding of how AI can play in this market was a big factor in my decision to sort of join him at Front. And then I think Front's product itself is really unique to go after this opportunity.

5:26Front was really established as a collaboration and productivity tool where employees have the opportunity to collaborate with each other behind the scenes around external customer communication. And so what that's looked like in the past is your support teammate may be reaching out to somebody within product or engineering or somebody in finance to ask a billing question. And that's been person to person collaboration behind the scenes. What we know today with AI is that can look like not only person to person, but person to agent or teammates to agent or teammates to multiple agents. It provides a really interesting surface area across which to think about how companies are interacting with agents as they work to best support their customers.

6:16I love hearing a CFO's investment thesis on why they joined. And what came across to me is how forward looking you were. You weren't just looking at the market opportunity of what Front has done to date. You were looking at what could this be over the next three to five years. Especially at this point in time when so much is changing with AI, it needs to not only be about what the reality is today, and this is really for anybody obviously assessing a career opportunity at this point. What are the future applications? Is this disruptive to a company's product? Can it be additive? Are there new revenue streams that can come from this?

6:52And I think keeping that in mind, especially in today's market with the disruption that is happening with AI is incredibly important. Meredith, you've described your career as a portfolio career, which I think is an amazing phrase. And I want to steal it from my own. Well, why do you think having multiple lenses, you have the investor lens, the operator lens, the finance leader lens. Why do you think that makes someone better at leading a business versus, say, going very deep in one lane or domain for 20 years? Even though I work in tech, I love the movie industry. So I'll borrow an analogy from that to sort of explain this a little bit.

7:27I think being an executive is really like being a director on a movie versus being a specialist. So you've got the cinematographer that knows what the lighting should look like, the editor that can really know pacing, a composer who knows the score, but it's really the director who's bringing it all together. The way I've thought about my career is I've really had the opportunity to play some of those specialist roles, to work on M &A deals, to have that investor perspective, to have a deep operating perspective at larger companies and small scale as well. I've seen sort of both ends of the spectrum.

8:06All of those experiences sort of come together that when you're trying to lead a business from the CFO seat or from the COO seat, that really provides me with unique opportunity to draw on those experiences to, I think, better direct the movie or better help execute at the company. Producer Ben and producer Steve are going to love that analogy. Meredith, when you change from being on the investment side to the operator side, I know you've had multiple roles or stops along the way. Did you have to unlearn anything or did you have any hypotheses about how business was done that you had to change?

8:40I think you know it as an investor, but what really comes to bear as an operator is that execution is everything. You've got a great perspective in an investment role of looking across the market pretty broadly and seeing maybe where white spaces are, where there's opportunities for companies to run after green space. Obviously, that's a thesis, right? It's a thesis on the market. You can have the market thesis, but really how you execute, how you build the product that really fits those market needs, how you market that product and tell that value story really clearly to customers, how you build the right sales organization.

9:19it's really all of those elements that need to come together. And I think a lot of times investors are very focused on the diligence they're doing and looking for signals of that execution sitting in the operator seat. You know, just like I walked into front with a thesis on where I thought we would go. Certainly many of those bets have played out. And we've done a great job re-accelerating growth in our business and really running after a new market in a meaningful way with AI. But certain things didn't play out as I expected. It's not a very clear cut path and it's so execution dependent. And I think to go back to the three things that I focus on always and assessing investments, that's where the people component is most important.

10:11because the more experienced folks you have around the table who I think have those different perspectives and come from different businesses, the better the execution tends to be. Hey, thanks for listening. We'll be right back after a word from our sponsors. Listen, I'm no mathematician, although that is what my mother-in-law tells people I do for work. My son-in-law is CJ. He's a mathematician. If your finance team expands linearly with your headcount, your leverage is broken. Too many CFOs waste incredible talent on low-value maintenance. manual reconciliation, chasing missing receipts, and policing$30 software subscriptions.

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13:23Truer words have really never been spoken. And I think, you know, there's a lot that you can take from reading those books. And I feel like I've read so many of them throughout the year. But then the application of any of those insights and values is difficult. It's also that anytime you're leading a business, it's not only just the actions I'm taking. It's how I'm actually able to communicate the strategy, communicate what we are looking to do to the team. A lot of times it's like trying to turn a really big ship. You can't do it by yourself, right? You need the entire crew on board to be working.

14:02And I think that execution piece of really coordinating across the entire team and across the entire company is an important component of execution. That, again, there's a lot of books written on leading high-powered teams. There's only so much, I think, that in dealing with people you can take from theory, how you interact with your teammates, how you can convince them, how you give them the right level of direction to help them execute. And then the freedom, I think, to do it quickly as well. I love that you brought up execution here because you truly doubled down on the execution that goes into your role.

14:38So you have both the CFO and COO dual mandate, which we're seeing more and more often. Congrats, by the way. I was so pumped. I'm curious, what does that dual mandate look like? Well, if I'm honest, chaos. It's actually quite like if you're building a house, being both the architect and the general contractor. The CFO is the architect, right, really drawing those blueprints, estimating what the cost is going to be. But it's very conceptual. It's very much on paper or in our world in finance, very much in spreadsheets. Right. Whereas the COO really needs to, like, take the blueprint, take the budget, actually go buy the goods and then figure out, you know, how they're framing up the walls, how they're putting up the sheetrock.

15:23And so I think the dual mandate, what it does is really bring those two perspectives together as you think about building the company so that in one role, you've got the same person who's thinking about drafting plans, right? Drafting those blueprints, putting the budget together, thinking about the headcount that will be needed to execute on something. That person ends up being the same person in many cases who is then implementing those things as well. And so what it allows me to do, I think, is draw upon my experience on the operating side and actually trying to implement things and say, is this a realistic assumption from a headcount perspective?

16:01Where do we need to have sort of more flexibility to operate than necessarily the plan may indicate? And so I think it helps in that like handoff between plan and actual execution, having the two roles combined into one. What changes inside a company, it could be your company or you can feel free to speak more generally, where it does make sense for the CFO to also become the COO? It's a good question. I don't think it's a change that's necessarily exclusive to front, but I certainly think what has happened within a number of growth stage businesses is that connecting capital allocation and execution has never been more strategic.

16:46I think you have a number of growth stage businesses that have raised a large amount of capital, experience, ebbing and flowing of growth rates, need to figure out how to operate more efficiently, in particular at the growth stage. You're beyond that point of where you're just trying to prove product market fit. You're really trying to get that core business to a point where you're showing more profitable execution or more efficient execution. And I think having the two roles combined to create greater connectivity between how the capital is executed, how the capital is allocated, and then ultimately what the execution looks like, who you're hiring, what plans you're putting forth.

17:34I'm very involved in revenue operations. That's one of the functions that reports up to me. So it could be everything from what outbound campaigns we're focusing on running, how we're thinking about investing in our partner strategy to continue to build pipeline up market. it's really getting into the nitty gritty and translating how we forecast to how the business operates. And I think more businesses that are looking for re-accelerated growth while remaining capital efficient need those two roles to be closely tied together. So whether that's one person wearing both hats or two individuals that can really work in coordination, I think having a COO that has an appreciation for capital efficiency is really important in this moment.

18:26I'm hoping you could go a little bit deeper on some of the conversations that you've had maybe this week wearing your COO hat that you maybe wouldn't have had if you were just the CFO in that role. I think you brought up working with partners in the marketing campaigns there. I think there's a number of things I do on the revenue operation side that no CFO would probably ever touch with the depth I am touching it. So I've got a number of functions under me from a COO perspective. And as I mentioned, I oversee revenue operations. I also oversee our go-to-market systems and IT. One area that we're really starting to see come together from an operational perspective that I don't think I would normally be handling under just a CFO mandate is applications of AI across the business and how we are more centrally starting to build agents internally, applications internally, to really streamline some of those go-to-market workflows in particular.

19:28We are undertaking initiatives right now to build a customer 360 portal to think about how we are optimizing the deals that we work with our partners on, how they register those deals with Front. This is like a level of execution on the operation side. It's 10-dimensional chess. This is like a really unique opportunity to build something custom. I think that is something increasingly I see I'm taking on wearing the COO hat that I don't think any CFO would be doing is how we're starting to really think about more centrally building agents. So we might be modeling in the productivity gains on the finance side.

20:11Now it's how do we actually go execute on it? Well, I'm glad you brought that up because in many ways, the two roles are in harmony, but you brought up the architect and the builder. They don't always get along. Are there areas where you're almost arguing with yourself, for lack of a better term, because you're in both seats? I definitely think the conflict between the two roles hasn't gone away. You really need to have these two perspectives pressure testing each other. There is conflict. You know, I think not to only talk about AI, right, but AI is obviously such an important topic. CFOs out there are all cringing at how fast token consumption continues to grow across orgs.

21:00I think everybody has gone through a rebudgeting process over the last two months to reset expectations on what they'll be spending on tokens. And so from a finance standpoint, you look at that and go, I don't know what the ROI is. Our AI spend grow about 25 % week on week right now still. But we are just in the early phases. If I think about like the COO role, we are trying to transform how the business runs, how we build product, how we operate internally from a go-to-market perspective. So there's a lot of testing we need to do. Having to hold both of those things at the same time is definitely where the tension shows up because the CFO is definitely like, what are we getting for this?

21:47What's the hard ROI? The spend is growing very quickly. When do you sort of stop? And the COO hat is like, we really need to transform the operations of the business. I need some room to experiment and make sure we're not cutting things off too soon so that we can see what will optimally work for us as we try to reinvent both product development and many of our internal operating functions. And so from a CFO lens, I'm tolerating a lot more experimental spend because I also am seeing some of the positive implications on the operating side through that COO lens. Hey, thanks for listening. We'll be right back after a word from our sponsors.

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24:32The problem? It's a dozen disconnected tools. You got one for revenue, one for AP, one for the close, and each one needs training and documentation. And the expertise to run them lives in your head, not the systems. MaxiMor takes the opposite approach. One autonomous finance platform for the whole operation. Order to cash, procure to pay, the close, cash management, and reporting. It all runs on a unified finance context that pulls from your erp billing banks even email and slack no rip and replace maximor runs on self-learning agents that learn how your team already works no prompts to wire no workflows to build nothing to document every output is audit ready and when a call needs human judgment it escalates for review because the agents optimize not just execute and your kpis keep on improving.

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26:11What are we getting for it. And I think there's areas where there's certainly clearer ROI, right? Our ability to build and launch product faster. I think we are really seeing that meaningfully change. We see some people definitely spending a ton on tokens. And there's always a question of, what's that person building over there? And this is where we are trying to centralize some of those development efforts under the systems and IT teams that I run so that we can really pick up. If somebody within the sales team is working on trying to build something really interesting, we want to know what that is.

26:47We want to make sure that we're building it in a way that can scale to serve the entire organization. Not that people are off sort of building science projects, I would say, but really that anything we're investing in building can really maximize productivity across the entire team. And I think that's the gap for folks right now. I think there's not a lot of transparency into what's being built. There's not a lot of measurable ways to then sort of determine what ROI is on those things that folks are building internally. And that's where I think centralization of a lot of the more meaningful investments that are made is something I expect a lot of companies to do.

27:30And you can see many companies already starting to restrict tokens to employees. Do you have any tips for people listening who are trying to crack the code on how the heck to budget for this stuff? If I knew that, I don't think I'd need to work anymore. When we went through our budgeting process, I think what we understood was we couldn't just take a point in time. And really, we did this at the end of our Q1, which was end of April. We still knew in April that we were in a maturing moment within our R &D organization in particular in terms of their adoption of a lot of these tools. And we could see that because there was a real array of usage, right?

28:12We broke it down to the individual level. We looked at it on the team level. We could see there was a smaller population of token users. So we saw there's definitely a group of people that we knew were sort of building more at the frontier. That was not represented across the entire team today. But certainly our goal is to increase the rate at which all of our engineers, product team, designers are using AI. And so we really were trying to forecast, keeping in mind that we're probably getting everybody up to that frontier team member level rather than just trying to look at, oh, how do we think this is going to grow week over week?

28:55How do we think if we're really pushing on this over the next quarter, we're scaling costs in alignment with really how we know our R &D team is encouraging adoption of these tools across the organization? We left some room for margin of error on top of it. Just to play it back, I think that's so smart to use your own internal benchmarks on early adopters. So if there are three people out of like 30 on the engineering team just making up numbers who are far out ahead, you can use that as like the local maximum of what you think it could get to rather than trying to just make, I don't know, like a broad based assumption across the team.

29:33And we saw that it was sort of stabilizing for those folks. I mean, we only had a couple months of data on it, but we sort of saw that their weekly usage was starting to stabilize. You know, there was a cohort of about 10 folks, I think, who were making up a third of our spend. We know there's a lot of growth still to come as we really try to transform the way in which the entire organization works. Our method was to try to use internal data to best estimate how getting everybody up to similar levels of usage, what that would imply. And you looked at it by team, too, the individuals, like a person in finance or accounting versus someone in product.

30:14We looked at every individual within product, engineering, design, and we're able to sort of like map those each of those personas to what do we think the spend looks like for a person in that in that department. Do you think in the future we're going to budget for tokens similar to how we do almost like a benefits uplift? Like, oh, you work in the U.S. It's 20 to 25 percent on top of like whatever we think you get paid. I've been trying to figure out like what the shape of this is going to be to put into my model. My personal belief, which I know there's a lot of theories out there of like give everybody these tools.

30:48And I do think there's a lot of power in that. But I've talked about centralizing building and I've talked about it for a reason, because I think what we have seen just anecdotally is that we've given everybody these tools and we're like, OK, we very limited direction on what you should go do with them. It's basically like try to make your life easier. Try to make doing your job easier. Try to try to make, you know, working or whatever little pocket of the world you're in, like execute better, execute faster. So there's not like very explicit instructions. And I think what you find is when there's shared pain points across the team.

31:27And so eight people built discount calculators across the business. They built them all in slightly different ways. There was no real quality control for us to assess. Was it correct even? Did it adhere to sort of some of our discounting policies? And so this is where I say, I think there's a lot of ideas that can come from the organization and come like sort of from the ground up around ways in which you can better use AI or things you can build with AI to improve internal operations. But I think if you have eight people spending time building, you know, individual copies of essentially the same thing, it's a signal that one, it's probably something that you should be building, but you should build it centrally so that everybody can use it and take advantage of it.

32:16My assumption is we're going to get to a place where, and again, I think this is really for teams outside of R &D because I think the value proposition of AI within product engineering and design is a bit different. We want ideas coming from the individuals who are dealing with gaps in our systems or know that they need to constantly be producing a report for internal use or customer use. We want those ideas coming to us, but we want to make sure that things are built in a way where it's not just one rep that can take advantage of it. Everybody can take advantage of it. And I think a lot of businesses that are starting today, they just think about building that tool to automate the work that a person would do.

33:07And they think about it, I think, pretty automatically that, hey, we want to build something that can be used across the entire org. What's happened at a lot of growth stage businesses or later stage larger companies where they've just given everybody AI is you're lacking that coordination of being a smaller team and building with intent. And it's why we really believe like bringing together a group that can build centrally, take ideas from the organization. And, you know, we're not limiting budgets to anybody yet. So anybody on my team who's watching this, don't panic. But I do see a world in which you'll want to limit budgets there to ensure that people are doing the right amount of testing.

33:48Anything you're building for use across the company is built centrally so that it's set to scale. I like that because then you don't have the sunk cost of building something in a pocket where only certain people can use it. That person leaves the org. How the hell do we update what Tammy built a year ago? Exactly. I think you really have to start thinking about building some of this stuff like building product. Yeah. You need to make sure you're going out there and understanding the end customer needs. It just is that the end customer in this case is your internal employees. You need to not just take the ideas from one, right?

34:23You need to go talk to many of them. So it almost becomes a little bit like an internal product development function that's really able to understand the needs of the organization. We've really put this within systems and IT because we think connectivity and integration with our existing systems is going to be really important to making this effective. I would say the third leg of that stool is also our data team and our data engineering team in particular, because making sure that we've got the right semantic layer on top of our data so that agents can understand our data and the data can very seamlessly integrate with what we're building is incredibly important.

35:05I love that. And I really enjoyed hearing you talk about building products, but you're the customer for it. I do want to touch on funding new bets. It reminds me of that in a lot of ways, because a lot of SaaS companies right now, they're trying to behave like startups again, while also being expected to operate efficiently. And you've talked about funding a seed or a Series A style business inside, say, a Series D company. How have you done that without creating organizational whiplash? To me, it probably comes from my investor perspective, but that is really, really how I think about it. You know, an investor evaluates a Series A company very differently than a Series D company.

35:43When you're looking at a Series D company, what are you trying to measure? You're more focused on efficiency. You're more focused on repeatability of sales. So if I put a dollar into the sales and marketing machine, how much comes out the other side? retention rates, expansion rates, just more data that you're focused on. And it becomes much more of a data exercise. At the seed or series A stage, you know, series A, you start to get into a little bit of modernization. But seed stage, I think particularly seed stage right now, it's much more focused on product adoption, customer engagement, particularly with AI.

36:23What are the results that a customer is able to achieve in terms of, you know, in our world, resolution rates from a customer ticket perspective. You know, you really need to be able to look at these two bets very distinctly. I think you need to fund these two bets very separately as well. And you need to really make sure that when you're making a seed bet or a Series A bet, just like a seed or a Series A company, you're not raising that next round of capital until you hit milestones. Constricting the amount of capital or the amount of time, right, that you let a bet run where you are measuring against whether you're reaching those milestones or not as real proof points of whether you should fund that next round is incredibly important.

37:10Because the Series D company, you've got something that's working. You're largely feeding the machine to get another dollar of revenue out. But what you've got to make sure you're doing at the seed and A stage is that the product is showing enough signs of product market fit and the ability for early monetization to continue to fund that bet as opposed to taking any additional capital and either making a different bet, right, or funding a V2 of that initiative. I think you've really got to start to assess, are you seeing those signs of product market fit for the seed A company? On the funding side of things, we were recently talking to Aurelian Nolfe, who's the CFO at Navon, and he was previously VP of FP &A at Lyft.

37:59And he had this capital allocation framework where he tries to think about it like you got 100 % to go around, 70 % will go to the core product of what's working, 20 % will go to adjacent bets that you're pretty confident will work, like a reasonable person would say, yeah, that makes a lot of sense, you're doing that. And then 10 % are moonshot ideas. And all three of those buckets, they get different amounts because they have different risk adjusted return profiles. Do you think about it similarly when you're sizing the bets or how do you wrap your head around that? You're still trying to make sure that you are appropriately funding growth in your core business, right?

38:34I think we believe in Front's core platform. We see that there is still strong interest from the market to adopt Front. We're displacing a lot of competitors in many of those cases as well. So we want to fund that growth. We want to continue to fund that customer acquisition because we know the new products that we are building will be things that ultimately those customers will be able to buy as well. Funding the core, I think about a lot of times as not only just funding, you know, the product build around that, but continuing to fund that customer acquisition, which will enable you to monetize those bets, those bets that you're making that are either moonshot bets, which I definitely think, you know, you're allocating a smaller amount of capital to.

39:25And I think AI is one of those bets for front, where we know that continuing to be a leading platform in this space requires having mature AI products that are able to resolve really complex customer inquiries and support tickets. And so less of a moonshot, more really core to how we think about the evolution of the product. And we want to make sure we're not underfunding that as well. I think a lot of people are out there saying, how do I reaccelerate my business? And I want to give you credit because Front figured it out. It sounds fantastic. Is there a secret sauce to doing it? It's hard. I won't lie.

40:09One, really focusing on and understanding where customers see value in your platform. So, you know, as I said, we were a much broader productivity and collaboration solution. That's much more of a commoditized offering. If you just think about being an email meets Slack product, right? Where there's real value to having that collaboration between teammates is around external communication. The real value is with obviously customers that you're trying to sell to or retain. And so that shows up in a lot of support use cases. We went from being a company that sort of sold to anybody to being much more focused on our ICP use cases around customer support and customer operations, making sure that we were focused on tailoring our platform, our product, our AI bets to serve those use cases as well.

41:11So in many cases, it was a doubling down on where we knew the product was already valued the most. And we were lucky in that we had a lot of customer facing teams that were already on the platform. And the data that we saw was those teams retained the best and they expanded the best. So it's clear signal that they were our customer base that saw the most value from the platform. And I think building towards customers that see the value, are willing to pay you that value, is really the best way to build a big company. I want to flag something that's beautifully counterintuitive in many ways, because a lot of companies say, oh, we need to reaccelerate revenue.

41:50Let's create a product that expands who we speak to, who we sell to. But it's actually the opposite. It's how do you go deeper with the customers who pay you more for more value? That's something that sometimes folks miss. And I do a lot of work within my team on pricing and packaging. The key thing in pricing and packaging work is really understanding the value that your product brings to customers and what their willingness to pay for it is. And I think that's the gap in knowledge that certainly from the investor side, I've seen most companies have and really understanding where your product is most valued.

42:29And I do think we saw this interesting opportunity to be the surface area for agent and human interaction and understanding and knowing that customer support and customer operations is one of those areas across the enterprise right now where people are leaning into investing in AI. It was a really natural place for us to also say, hey, we want to grow an AI business. This is a segment of the market that we know is looking to adopt AI right now. We've got good product market fit there already. And we think our product creates a unique opportunity for interaction with AI agents. It sort of all comes together to, I think, maximize the value that our platform's able to generate for the segment of customers.

43:17Meredith, what did you learn going through that pricing and packaging change that you did in front? For context for everybody, we, about a year ago, did an entire overhaul of all of our pricing and packaging. We simultaneously were building a number of AI add-ons and features. And what we really realized was this value gap story, right? So the biggest data point I saw when I first joined Front that led me to understand we needed to reassess pricing and packaging was our tier two offering and our tier three offering. So sort of our top two offerings, net of discounts. We were seeing the exact same per seat price, right?

44:04So what it meant is people weren't actually willing to pay us more for our top tier package. They were buying it largely because we allowed more seats in that package or, you know, we had some other offerings that they weren't willing to pay a lot more for, but needed. And so what we really realized we needed to do was create more value in that top tier package. And so there was a lot of work done sort of understanding our customer base better and really thinking about how we could take some of those AI add-ons that the team was building and pre-package them into that top tier plan to create more value distinction between the two plans.

44:44And I think it's just as much about packaging as it is about the number you're willing to charge. That is the piece that most folks actually miss. You have to make sure there's a real value distinction between your packages and make sure that what is in one offering tier versus the next is actually something people are willing to pay more for. Sorry, sometimes I'm like a dog with a bone, but I got to dig into that because on the podcast all the time, we talk about usage-based pricing, hybrid pricing, SaaS pricing. And a lot of times it does go to the number behind it. Can you say more about this stuff in the package and the importance there?

45:21So look, I think you need to be able to justify to a customer. If you've got two packages or three packages, four, right, is typically I think the most people put up there. you've got to really have distinct pockets of value that distinguish those packages. So a lot of people try to gate between package tiers by limiting number of users or limiting number of workspaces. This is an element that we gate on as well. But to really think about, hey, how am I going to get somebody to pay maybe$40 more for our solution? If I'm a salesperson that needs to sell against this. And I like to put myself in the salesperson's seat quite a bit.

46:05How do I communicate that extra value to the end customer that really helps incentivize them to purchase that higher tier package? And I think you really need to assess that. And you need to understand, does the customer think that those things are worth$40 more? So it's not only your perception of whether you think they're worth$40 more, it's does the customer actually think they're worth $40 more. And I think that is something that I don't think enough companies understand as they're thinking about putting together pricing and packaging. You also really need to think about your customer's willingness and ability to pay.

46:43And I think this is coming up in a lot of usage based AI solutions right now, in particular, where folks are saying the cost of doing this with AI actually is not necessarily cheaper than it is doing it with a human. For us who is serving customer support teams, understanding what the cost to resolve a ticket is for a customer. And that can vary widely depending upon where those customer support people sit in the world and how much they're paid. So even on the usage-based side, understanding willingness to pay and whether you're creating a savings opportunity and really creating value for the customer is important.

47:24And that goes to understanding the fundamental economics on the customer side as well. Can you say more about the importance of understanding your customers, P &L? Yeah, I've seen this show up in a couple of roles up front and certainly my last company, Mantle, as well, where we were selling to banks and credit unions. I think they're really understanding the economics for the bank of what is it worth to acquire a consumer checking customer, consumer savings customer was really important to understanding how much they should be willing to pay from the software cost perspective to acquire those accounts.

48:02I think similarly at Front, we serve a variety of different verticals, manufacturing and logistics, businesses that have very different margin profiles, working capital needs than customers that might be in the tech or professional services space. And so I think understanding the needs of those customers is very important in how you're thinking about pricing and packaging, how you think about charging for your product as well, you know, just even beyond vertical size of customer, you know, ability to pay for an upfront annually for an SMB business, the manufacturing space, right, will probably be harder than an SMB customer in the tech space that may have a bunch of venture funding.

48:53And so I think really understanding the financial picture for your customers, it extends to your willingness to pay how much you're able to charge, but it's also something you really need to think about in billing as well. Are customers from a certain vertical more prone to purchasing a monthly build solution and they would even pay more for that in many cases. The gold standard within SaaS is annual contracts paid up front. But I think really understanding ability and willingness to pay of customers in different verticals is really important as you think about pricing and packaging. I remember my friend Ethan, sales leader, brought me a deal once and I looked at it like, dude, we can't sell this for that.

49:35And he's like, I know CJ, this is what you think. it is worth, but I'm telling you, this is what they can pay. So do you want to do a deal with them or not? And I was like, he's got a good point there. Yeah, look, ability to pay is really just as important as willingness to pay. You need to make sure that the solution makes economic sense for them as well. And I think that will creep into a lot of AI pricing increasingly as people start to get a better handle on what it costs to complete a task with AI versus doing it with people. Meredith, I'm going to take you into what we call our long ass lightning round.

50:13So the first question I ask every successful CFO and COO on the show is what's something you've messed up on the job before? It could be this role or any other. The biggest mistakes I always think about making involved people. It's a mishire, losing somebody who's incredibly talented. I don't know that it's something intentionally that I've screwed up. But as I think about where, you know, I'm most critical on myself, I think one of the things I'm definitely most proud of is the team I built and, you know, the opportunity I try to give to everybody that is on my team. But yeah, where I am most critical or where I think I screw up is I've mishired somebody and I don't always think about that as being on the candidate side or I've had somebody leave the team that I know is incredibly valuable.

51:06We get that a lot. It's either not letting somebody go fast enough and it impacts the team or losing somebody amazing because you could have given them another opportunity to step up, but you had a million things going on and you weren't really thinking of it. So you're not the only person who's drawn it back to people. It's tough, but they're the most important resource, I think, in the business still, even in the age of AI. I wouldn't trade cloud for many members of my team. If you could give your younger self advice, knowing what you know today, what would you tell her? You know, I think when I was younger, I really thought what I was doing was going to be the most important thing.

51:42When you're young, everybody's like, what do you want to be when you grow up? And you think about that a lot as like, functionally, what are you doing? And I think what I've learned is it's really a lot less about what you're doing and more who you're doing it with. Finding really great people to work with would be the advice I would give my younger self. And I think I've been really lucky throughout my career. So, you know, as you said, I have worn a bunch of different hats. I have collected a bunch of different experiences. But the real benefit I've had through having all of those experiences is I've really had the opportunity to work with incredibly smart people.

52:20The people you work with really have the greatest opportunity to change the trajectory of your career and teach you so much. Next one, a bit more technical. What tools does your finance team use to get the job done today? We've got quite the stack. We are on NetSuite. We use Stripe for billing, AnRock for sales tax, Ramp for bill pay, T &E, and procurement. We use Flowcast to sort of manage closed process, ADP for payroll. payroll. And then on the sort of core finance side, you know, we are just going through the process right now of doing an RFP for a different FP &A planning tool. We did have Pigment before.

53:08Never really got it to quite work. Claude to help with BVAs, to help with understand and provide visibility into the plan. And then we've got Omni for a lot of our BI. Awesome. Quite the stack. What's the craziest thing you've ever had someone try to expense? Definitely had somebody expense an outfit. You know, they were going to a conference and speaking at the conference. Was it a cute outfit? It was actually a guy, so it was a suit. Okay. That was probably like the strangest thing I ever saw. I could see the rough connection, but I was like, you get to keep the suit after, so I don't think we're paying for it.

53:44Yeah, unless it was like a prom rental tuxedo. Hit men's warehouse. Meredith, thank you so much for carving out time for this. This was an absolute blast. Yeah, thanks so much, CJ. Always good talking to you and really enjoyed it. Run the Numbers is a mostly media production. Yelling an intro by Fat Joe. Artwork by Meg D 'Alessandro. Show is executive produced by Ben Hillman. Nothing said on this podcast is intended to be business or investment advice. It's the sole opinion of me, a guy who feeds his dog way too much ice cream and has a history of net operating losses, LOL. If you like this podcast, hit subscribe and give us five stars.

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