Younes Rhabaoui of The Family on CFO Yeah

CFO Yeah! Podcast

Finance Hacking & the Augmented CFO, with Younes Rharbaoui of The Family

Patrick Whatman Spendesk

“I think the 2020s will see a spotlight shed on CFOs and their role. They’re actually here to help companies grow to profitability and become large organizations.”

In some ways, Younes Rharbaoui’s journey to becoming CFO at The Family might look familiar. He began as a private equity analyst at Ardian in Paris, spent time in London working on investments and “dealflows” with The Family, and eventually moved up to CFO.

But a few things make his story more interesting. First, he took the job when he was only 27. And second, this was his first full-time finance team position. When The Family realized it was time to recruit a CFO, they gave Younes the first shot. He clearly had the intelligence, curiosity, and analytical skills to excel, and the “hard skills” he could learn in his own way.

Younes grew into the role leaning heavily on his background in product management and entrepreneurship. He uses terms like “finance hacking” and “augmented CFO” to describe his approach to modern finance leadership. And he’s a fascinating CFO as a result.

His newsletter Chasing Paper is a must-read for a fresh and sometimes very frank exploration of his first year on the job. In this episode of the podcast, we went into some of the concepts he writes about in depth. And because this was a CFO Connect AMA, he also answered lots of audience questions.

You can listen to the full episode on Spotify, Apple, or RSS. Here are the highlights.

Building the finance function at a startup incubator

Younes was the first CFO hired at The Family. There had always been a high level of financial literacy - the business model revolves around identifying viable companies, after all. But internally, it was time for more structure.

“I had a really cluttered roadmap originally. For all the past work that had been done - cash management, accounting, structures - there was no coherent or cohesive process. Everything was a bit scrappy.”

“My main perspective was: how do I structure this so that it becomes the financial powerhouse we want it to be? The front end of The Family is us helping and working with the entrepreneurs. On the back end, we’re an investment company. To grow, we need good people, good processes, and good tools.”

“I knew that accounting was a pain, but I still had to take care of it. Payroll as well. But then there were things I had no clue would come up. Number one on that list was Coronavirus. That basically dictated everything that came after it.”

“I didn’t expect to become an expert on labor law for each of the countries in which we’re based. I’m actually glad, because this opened my horizons and made me a more efficient CFO.”

Behind the term “finance hacking”

“I was puzzled when I started this new position. There weren’t that many tools available to CFOs to quickly review the information they needed. CFOs today have to be very strategic, but they also have to master data, and handle many other things within the organization. The tools at your disposal to do all that are very limited.”

“There are lots of good options available off the shelf to handle specific parts of the job - Spendesk or Carta for example. But the way these tools integrate with each other is way too heavy for fledgling businesses.”

“You won’t use an ERP if you’re only a team of five. At the same time, if you only use spreadsheets for everything, at some point you’ll face a serious backlog and technical debt.”

“So I was inspired by marketers using ‘growth hacking.’ Growth hacking isn’t a magic box - it’s really just the idea of building a growth machine that suits your specific business. These can be very efficient systems, and I think you can do the same thing for finance.”

“I started using the same tools I’d used before as an entrepreneur, but for finance. So when I want something automated, I can do it myself with Zapier. And that might save me an hour per day. I kept going until I reached a point where there wasn’t much space for automation left.”

Internal hiring versus outsourcing finance roles

“Internalizing versus outsourcing is a matter of identifying where the value add is for you. For us, the core business is to know the precise value of our assets. That’s not something we’re willing to outsource."

“Sometimes when one of our portfolio companies raises a round, we’ll set up a special purpose vehicle to invest. As a result, we have about 80 investment vehicles that we manage, so doing the accounting for these vehicles in-house makes absolutely no sense. We would be in over our heads just doing that.”

“So we outsource that to a reliable provider who can add more value to our organization than we could add ourselves. That’s where I draw the line: for every task, is it worth investing our team’s time? Or is it better to outsource?”

His concept of “the augmented CFO”

“What I call an ‘augmented CFO’ is a CFO who leverages the power of automation and software tools to help their organization, their team, and themselves to rein in finance operations.” “This has a positive outcome on the speed with which operations are taken care of. It has a positive outcome on the overall impact of the CFO. That CFO will be able to take care of those one-off events that need their full attention. That’s when they can become strategic, rather than being caught up in processes.”

“It also has a great impact on mental health, which I think is worth noting in times of crisis. Very often CFOs can feel lonely within their team. The role isn’t always seen in the best light internally.”

“So taking advantage of tools and becoming the augmented CFO lets CFOs rest but also feel more empowered in the job. Plus, if you’re in a tech organization, it’s great to feel tech-empowered.”

Why CFOs can feel lonely or isolated

“This is maybe overly simplistic, but the 2010s weren’t so great for CFOs. The startup world took off really quickly, and there were mottos going around like ‘just grow fast - revenue doesn’t matter.’”

“Profitability became less important, and lots of financial metrics were overlooked. So the role of CFO was also overlooked. This in part led to lots of really bad company stories - WeWork, and others you’ve seen in the press.”

“I think the 2020s will see a spotlight shed on CFOs and their role. They’re actually here to help companies grow to profitability and become large organizations.”

“In that sense, the current crisis has been helpful - forgive me for saying that. But it showed that the CFO is right there next to the CEO, to take decisions that will help the company move forward and reach a position where it can become sustainable. And I think that’s a great thing.”