Continuing with our CFO series, this week I had the pleasure of catching up with David Lee over a flat white. Let’s hear his thoughts…
What do you make of the current UK startup market?
The rate of change and innovation is rapid, it feels like we are in the middle of a technology revolution! I read somewhere that the last time there was this level of change and value creation was 100 years ago during the industrial revolution. It’s great to be a part of that.
London has a really strong ecosystem, it’s getting better every year. We are miles behind Silicon Valley, but definitely leading the way in Europe.
Why did you move from corporate to startup?
I used to work in a large corporate media business. One day I had a call about a role at Betfair. I wasn’t particularly interested in betting or sports, but I soon discovered that Betfair was a highly innovative tech start-up/scale up that had invented a completely new way of betting that customers loved. I was there for over 4 years and became completely hooked on the power of technology to create innovative products and high growth business models. I haven’t looked back since.
What advice would you give to people looking to make the jump into a startup?
Be prepared for a journey. You need to have a “sleeves rolled up” can-do attitude. You get a lot of responsibility very quickly and get pulled into all sorts of things outside of your comfort zone. As a result you grow professionally and personally, all whilst learning on the job.
How do you view the role of a startup CFO currently? And in the future?
I see the role of a CFO with two layers:
- Build a high performing finance team. Everyone in the business relies on the team to get the numbers right, which in itself can be quite a challenge in early stage companies as many of the systems, processes and controls haven’t been implemented yet.
- Be a strong support partner to the CEO/Founder and management team. Helping guide them to pick the right strategy and get the business fundamentals in order.
The role of finance needs to continue to evolve from bean counter to business partner. That is where the value add lies. The future of core accounting obviously lies in automation and AI, that’s already happening today with systems like Receipt Bank. I don’t believe human beings should be doing data entry. I would like humans to be using their skills to manage the automation of systems and make judgement calls.
What’s the best part about your role?
The thing that I really enjoy is building businesses and products that customers love. When you receive feedback from customers who love what you do, it really validates all the hard work. It’s a fantastic feeling for everyone involved.
Can you tell me about a time in your startup career where you learnt the hard way, even though it was a great learning experience?
There are many ups and downs on the start-up journey. It feels great when everything is going your way, there’s money in the bank, your revenues are going up and to the right, you’re taking on the world! I have had a few of these, but I have also had a few knocks as well. I think it always comes down to focussing on getting your business fundamentals right and not get distracted by hype. As the old saying goes: Revenue is vanity, Profit is sanity, Cash is reality.
How crucial is it for you to have a great team around you, both finance & SLT?
Start-ups can be really challenging, it’s almost like the extreme sport of business. There is no question that you are only as good as the team around you. I have been very fortunate to have worked with some truly great people.
What is it that you look for when hiring a #2 & subsequent team?
I like to build teams with different skills and experiences to my own, it creates a really healthy balance. But I always look for people with sharp minds, a real motivation to succeed and good energy.
If you were to recommend a work related book, what would it be and why?
The Lean Startup by Eric Ries – It provides a very practical framework to help businesses “test and learn” using data and experiments. Learning is the most valuable currency in start-ups, the author refers to this as Innovation Accounting. You will never get that from a traditional accountancy course.
David Lee is CFO at Hometree (www.hometree.co.uk), a smart home services company. He is a Fellow of the Chartered Institute of Management Accountants and has over 15 years experience in high growth entrepreneurial Start-up, Technology and Media businesses such as Betfair, Mendeley and Stratajet.