The Financial Maturation of the SaaS Industry with Anthony Nitsos of SaaS Gurus

Our Guest: A Financial Health Architect, from Medicine to SaaS CFO Mastery.

Anthony Nitsos stands as the visionary founder of SaaS Gurus, a financial consultancy firm specializing in providing fractional CFO services to SaaS startups. His journey into the world of SaaS and finance commenced with the establishment of SaaS Gurus in January 2020, reflecting his keen understanding of the unique financial needs of Software as a Service company. Anthony’s professional background is as diverse as it is impressive; having originally pursued a path in human medicine, he later transitioned into finance, bringing a holistic and strategic perspective to the CFO role.
With a rare last name, Nitsos, a quick Google search reveals Anthony’s expertise and extensive experience in the finance realm. His approach to financial solutions is deeply rooted in his early training in human medicine, where he developed a commitment to addressing the root causes rather than merely treating symptoms. This distinctive perspective sets him apart as a CFO, advocating for a comprehensive understanding of every facet of a business. Anthony believes that the CFO should be as knowledgeable about the company as the CEO, emphasizing the interconnectedness of various departments and the critical role of understanding the “why” behind financial figures.
Anthony’s background goes beyond conventional financial expertise, as he proudly notes his training by the Japanese in quality management and his role as a Six Sigma black belt. This multifaceted background positions him as a strategic enabler, not just a financial expert, as he emphasizes the importance of knowing the intricacies of marketing, engineering, and HR. With a focus on empowerment and strategic decision-making, Anthony Nitsos stands at the forefront of redefining the CFO role, ensuring SaaS startups receive not just financial guidance but holistic business insights.

Episode Transcript

Anthony Nitsos: CFO stands for, I want to say Cash Flow Oracle. Okay? And in order to do that properly, you need to understand literally everything that’s going on in the business. There isn’t a single area that you can’t understand. And that means I need to be able to speak with the engineering, the CTO, in a language that he or she understands. I need to be able to speak with the customer service department in a language that they understand. And then I’m translating all this for the CEO. If he or she needs it translated or if they don’t, I’m there to help them. I’m a strategic enabler. That’s what the CFO role should and always has been in my mind.

Jacob Hollabaugh: Welcome to PayPod, the payments industry podcast. Each week, we’ll bring you in-depth conversations with leaders who are shaping the payments and fintech world, from payment processing to risk management, and from new technology to entirely new payment types. If you want to know what’s happening in the world of fintech and payments, you’re in the right place. Hello, everyone. Welcome to PayPod. I’m your host, Jacob Hollabaugh. And today on the show, we are talking all things SaaS. In the last decade-plus, we’ve seen software as a service take the commercial world by storm, starting the movement towards where we are today with the as-a-service model reaching far beyond the world of just software into more or less every use case that you can think of. We’ve talked about a lot of them here on this show, but that doesn’t mean that we’ve run out of new SaaS companies, or that every SaaS company is doing everything exactly right. There’s still room for growth and improvement within this world. So we’re going to look at today some of the ways SaaS companies could be improving, where the market generally stands, and a lot more related to SaaS companies. Joining me to do this is an expert on all things SaaS, a guru, you could say. I’m pleased to be joined by Anthony Nitsos, founder and CEO at SaaS Gurus, the company helping SaaS CEOs and founders succeed by giving them state-of-the-art finance and stakeholder ecosystems. Anthony, welcome to the show. Thank you so much for joining me today.

Anthony Nitsos: Thank you, Jacob. My pleasure. I really appreciate the opportunity.

Jacob Hollabaugh: The pleasure is mine. Now. I want to go back in time a couple of years here. I know a lot of people don’t necessarily love talking about this time, but for you, if you could go back to January 2020 for me and tell me the kind of origin story, what led you at that time to start SaaS Gurus, what were you doing leading up to that and where the idea come from? What did you see in the market that led you to say, “I want to make this company?”

Anthony Nitsos: I could say I had a crystal ball, and I knew Covid was going to kick the butt out of everybody, so it was time to go remote. But no, not at the time, because that’s when it happened. I had been working with SaaS companies actually since 2007 before the firm really was widely known or dispersed around. I worked on two SaaS unicorns, both here in Ann Arbor, which is where I’m based in Ann Arbor, Michigan, BlueGo blue.

Jacob Hollabaugh: I’m actually a big Michigan fan myself.

Anthony Nitsos: I know we just turned off all the Ohio State fans, so we just got lost probably about a bunch of them right there anyway. Sorry guys. We really like your new coach. Anyway, I had worked mostly as a fractional controller whatnot in a lot of brick and mortar, but also a few SaaS companies here. I’d been doing that since 2006. Before that, there’s a long and sordid history about what I was doing and how I got there. But in short, I have an operations background that became an accountant, became a finance expert. So a lot of my approach is operationally focused, I should say. Anyway, I had worked for those two unicorns and got another salary position. I said, you know what, “I really want to go back to being on my own.” Those unicorns, they’re very hard to work on when you’re scaling. There’s a lot of long hours and you got all sorts of constituencies you have to answer to. So after those two exits, I said, “You know what? I’m going to go back to doing my own thing.” And I realized that, as you said, the world is moving to SaaS just about anything, right? There’s HaaS, there’s there’s food as a service. Right? Everything is moving into a service and subscription model. So why not ride the wave? My attitude has always been, if there’s a tidal wave coming, I want to be on top of it, not on the ground. It proved to be the case. We landed. We had clients immediately out the door and then continued to grow since then. So it’s all been just a timing thing in terms of, had those two unicorns knew the market was heading in that direction and said, “Okay, here’s the time to put a stake in the sand and make a business around SaaS.”

Jacob Hollabaugh: Yeah, and what is it about SaaS companies, also, are you working with exclusively software as a service or are you just referencing that we now have the just basically everything as a service? Are you working strictly with kind of software companies and what makes with fractional CFO services, what makes the SaaS startups kind of an appropriate niche to focus or to use those services within?

Anthony Nitsos: So to the question of do we work with just SaaS? Almost exclusively. However, membership companies are also recurring revenue. So I like to think of it as we’re working with recurring revenue subscription model and whether it’s paid in advance annually or monthly, mostly B2B, but we also have some B2C clients. Those are a different animal. About half of our client base is venture-backed, and the other half is bootstrap. And the difference there is the bootstrappers. They have not taken any outside investment money. They’ve grown their companies on their own, and they need a professional to come in and help them organize themselves around what is appropriate for SaaS. And that’s really what it comes down to. Why is there a need for this? The way that you present yourself, especially if you’re going out for investment, is really critical. And having the right numbers, having the right financial statements, having the right forecasts is a big piece of that. But more important to me and to our team is the cash. And when it comes down to it, in the SaaS world, there are really two metrics that I believe matter more than anything else. It’s your cash runway and it’s your sales growth rate because most of the time you’re VC-backed, you’re running a loss. And the only way that the company can get valued is based on its sales number, its recurring revenue number. Typically, the next 12 months are what we call the LTM. Revenue is what your valuation is going to be based on. It can be a multiple anywhere from 6 to 12 and on up, depending on your software. That’s going to determine what your valuation is. So making sure that we’re properly recording that recurring revenue, that annualized recurring revenue, the ARR, that is a very key metric in the SaaS world. And your net retained revenue, your NRR, which is of the customers that come in, how many do you keep and how well do you grow them and expand them? Those are really critical metrics. So there’s a real alphabet soup out there of SaaS metrics. And there’s a lot of misinformation about how you put your financial statements together. And the truth is there are certain metrics you need. There are certain ways that they should be calculated that the industry is going to expect. And there are certain ways that you should be forecasting your cash to make sure that you have a line of sight on when that runway ends so that when you need to go out and raise more money, or if you’re a bootstrapper and you’re not out there raising money, a lot of it becomes tax strategy. In terms of if you’re profitable, what are the strategies that we can use to protect that profit from excess taxation or however we’re going to do it? There are a number of strategies. So we really have those two models, if you will, the bootstrappers where we’re forecasting cash to help them with tax preparation and retirement planning. And then on the VC side of things, how do we plan for the next raise, at what valuation and how are you presenting yourself to the market? So that’s really where our niche developed, which is there are right ways to do these things. And we’ve learned those over the various 15 years that we’ve been working with SaaS companies and the various benchmarking agencies that we use in order to benchmark our clients.

Jacob Hollabaugh: Yeah, absolutely. And I want to ask a little bit more about SaaS Gurus in a minute, but I want to start a little more with the industry as a whole. You touched on it a little at the very beginning of this conversation, but where do you think we are at right now in the maturity process of the SaaS industry? Would you say the market has reached maturity of any kind, or would you say even with the explosion and new entrants, the fact that it has been around for 15 years or so now, that we’re still, even though that’s been around that long in the early years of SaaS companies becoming mainstays, or do you think there’s areas of need within the commercial world that still need to be filled, or is it now just we’re at a point of like “The market’s full now. It’s about helping them actually all do it better and taking some of the strategies that you just said that you’ve learned over the years and filling them in on where they need to do things a little bit better?”

Anthony Nitsos: One, the market is not mature, in my opinion, and it comes down to two words, Artificial Intelligence. We have seen a rapid intensification and growth in companies that are AI-driven, and they are doing things in AI that previously had not been subject to software. And so what’s happening is and there’s a broader context I want to bring into this, which is in the investment side of things. So if you take a look at VC investment and where it’s been, we are past the heyday at this point. We are in a down cycle when it comes to VC investment. They have really pulled back the interest rate rises that the Fed have been putting through the easy money policy. Those are all done, and those low-interest rates and easy money policies were fueling a lot of VC funding. But those are changed right in the last year. Now we have high interest rates. The VCs now are pulling back. But the area where they’re investing is in AI. So to answer your question, there is a certain section that is matured. And now the screws are really being applied to say, okay, we’re not just going to continue to throw money into you. You have to show us a path to profitability before we’re going to invest more in. Before it was just like, “Oh, your sales are growing okay. We really don’t care about the burn so much. Here’s some more money. Here’s a great valuation.” Now on those companies, they’re really pulling back and saying, “You know what? If you’re not in AI we’re really questioning what your growth strategy is? we’re really questioning whether you have go-to-market potential, whether you have product market fit. So there’s a lot of pushback on those. And we’re seeing flat or down rounds in those companies that do not have really strong growth and are not in AI, but on the AI side of the world, it’s like an entirely new.com bubble. People are falling over themselves to throw money into really good AI companies. Now again, the market forces are out there on the VC side to say, “We’re not just going to throw money at you.” Especially if they can take it and go park it and make a guaranteed 5% interest rate, they’ll just sit on the sidelines and not invest in it and just rake in money on passive income. But if they find a really good opportunity, they’re going to go in. I’ve had clients that are receiving eight-figure investment rounds on no revenue just because they’re AI, which is astonishing. That’s like you’re putting in that much money, but they see the potential. So to your question, is it maturing? Certain sectors are but this AI sector is really become a game changer. Within the last year, half of our portfolio has become AI within a year. I’ve been in this business for a while and I’ve seen trends come and go, of course, but I have never seen anything as jaw-dropping as to say. We sat down the other day as a team and said, “Okay, let’s look at our client base.” And it’s like, “Wow, half of them are AI.” It just snuck up on us, right? We were onboarding a lot of companies this year. We’re not paying necessarily that close of attention to our internal statistics. We’re just like, “Okay, we got another client on board. Let’s get them onboarded.” But then we do these retrospectives at the end of the year and it’s like, “Wow, here it is.” So to answer your question, yes and no. And the “yes” is for anything that’s not AI. And the “no” is it ain’t anywhere near mature for me.

Jacob Hollabaugh: Yeah, certainly we’re going to look back at some point in the future, we already almost can in the moment because of the speed of it and say the way there’s a pre-internet and post-internet world and pre-social media, post-social media world, I think there will very much be a pretty defined line somewhere around 2023 that is the pre-AI and post-AI. We’re all moving over into a whole new world that is brand new and still has an immense amount of room to grow and even higher potential than anything that came before it. You referenced when discussing who you worked with that you mostly are in the B2B world, some in the B2C world, and one of the common themes on this show throughout this entire year outside of AI, which is certainly I’m glad you were the first to bring it up, because I typically I have to bring up artificial intelligence every single episode now, and it feels like a parody of myself or something of like, “Oh, we have to ask about it because it’s just everything right now.” But the other thing, one of the big themes has been talking about the B2B world catching up with the B2C world as far as financial technology and just technology in general, software in general, and that a lot of the tools that were initially pioneered for B2C solutions have been slowly but surely brought into the B2B world. In your career in the SaaS community, have you seen a similar situation of the B2B lagging behind in the earlier days? And maybe now in the last year to three years or so, catching up in a big way and folks seeing more of, there is a really big opportunity out there. It’s a little different. It’s a little maybe harder to go and address, but the opportunity is massive to take some of the things that were working well in the B2C world over to the B2B world.

Anthony Nitsos: If you’re talking fintech in particular, absolutely. There was a lot of motion in the fintech world, a lot of momentum in the fintech world to B2C, right? Everybody’s B2C. Why? Because we want to get rid of banks. I look at that statement and I’m like, okay, first of all, you realize how many financial institutions exist in the United States is measured in the thousands, tens of thousands. There are all sorts of credit unions. Savings and loans still exist, Banks, whatever. We just call them FIs, Financial Institutions. And they are entrenched. They’re not going anywhere. I don’t care about Bitcoin. We saw what happened with FTX. We see what’s happening with all these cryptocurrencies and all the problems that are associated with them. And everybody’s getting a lot of press on that. But what’s happening is there’s an entire sector, the banking sector, the financial institutions, the ones that are already in place, the places like Huntington Bank, Chase. It doesn’t matter who it is, they’re banks and there are people who bank with them. People like you and me, small businesses or just personal. And there’s been a lot of momentum to try and like, “Okay, we’re going to disrupt the banks and we’re going to drive them out of business and we’re going to take away all their customers.” But in the end, that has been limited. So the B2B play here is what can you provide a bank that they can white label and turn around and provide to their already established customer base. So rather than trying to boil the ocean as it were, and go after the entire consumer base, why don’t you try and boil a pot of water, which is get a contract with an AI solution or whatever fintech solution that makes it easier for the bank because the banks, let’s face it, they are so heavily regulated and so conservative in terms of their approach. They don’t really have software development teams, or very few of them do have software development teams that are sitting there saying, “Hey, we need a solution for micro-savings, or we need a solution for matching loan recipients to loan profiles etc etc? What can we do to make that better?” Well, if you’re a fintech company and let’s say you have a micro-savings app if you can white label that to a financial institution, your opportunity now is to get a quarter million, half a million, million dollar a year contract with one large bank. Because now you’re selling to that bank. They already have their customers. They’re providing your app to their customers, even if it’s white labeled and it doesn’t have your name on it, you still have that back-end relationship. And with financial institutions. I’ve noticed it’s like Hotel California. You can check out any time you like, but you can never leave. Once you’re in, you’re stuck, right? They want to keep you there because you’re part of their infrastructure and you’re considered a critical part of their operation. So yes, it’s maybe a long lead time. You’re talking months of lead time to close a deal. But if you have an app that they want that their customers want, they’re not going to develop on their own. You now have an opportunity. So absolutely in the fintech space, the play should be B2B at this point. And you should be thinking about what is it that the banks don’t do well now for their customers that I can come up with a solution that does it better and then I can sell it to them. Now you have a lot of regulatory issues to deal with. You have a lot of especially security issues and cybersecurity issues to deal with, especially if you’re dealing with deposits or if you’re handling their client’s money in any manner. You’re touching their money in any manner. You need to be ready for that. But like I said, once you’re there, they’re not going anywhere, in my opinion. I don’t think that it’s realistic to say that the established FIs are going anywhere. You’re not going to cut them out. So it’s like the £5,000 gorilla. You’re going to have to deal with it. And the best way to deal with it is find something that it wants and sell it to them.

Jacob Hollabaugh: Absolutely. And pretty solid agreement with you on that. And it definitely a lot of the companies we’ve talked to on this show this year are doing exactly that, and I think it’s working out incredibly well for them and definitely agree that they’re too big, they’re too entrenched that there’s no catching them off guard. There is no wave that could wipe them out, that they couldn’t withstand, and figure out how to navigate and get through and still be standing there on the other side. So working with them and using the fact that they have that customer base built in, they’ve done one of the big hard parts for you to be able to take it to them. And immediately here’s the customer base. You only have to work with one to get to all these other ones. So definitely the way to go. Let’s pivot for a second to I want to ask about. I was reading a bunch of the blog posts that SaaS Gurus puts out, and I had a few that really stood out to me that I wanted to ask you about. The first one was about just three mistakes that new SaaS companies in particular make, that kind of block them from growing. And I found it to be a very interesting read and wanted to know if you could share maybe 1 or 2 of the most common mistakes that you see these brand new SaaS companies making that are stopping them from that, the large growth pattern that could be out there for them.

Anthony Nitsos: Cash forecasting period. The number one is not really planning your cash out month by month, and it is not something that you can just whip up off of the internet. It requires your financial systems, your accounting system to be aligned properly for SaaS. So it looks and smells and act like a SaaS company. And believe me, the last person you ever want setting up your accounting system is your tax CPA. That is a big mistake. That’s another common mistake. “Oh, we need an accounting system. Okay. Here, Joe Smith, you’ve been doing my taxes. I’m going to go to you.” No, don’t do that. The reason why you don’t do that is because the tax CPA is going to set up your accounting system the way they need to file your taxes, not the way you need to run your business. You need to have it done properly. And there is a proper way. We follow generally the SEC guidelines when it comes to setting up financial statements for our clients. And the reason is because that gives you a couple of really good pieces of a couple of bases. And the base number one is comparability. Your financial statements are going to look like a SaaS company. So when an investor comes in or anybody from the outside looks at you, they’re going to know exactly what you are. They’re not going to have to restate and spend a lot of time trying to translate it. The other thing is that you do not have a good cash forecast, because you don’t have a good sales forecast. That is probably where we spend most of our time with our clients in the beginning, which is, “Do you understand how your sales behave? Do you know what your go-to-market strategy is? Do you know what your pipeline looks like? Do you know what your close rates look like? Do you know what your lead gen looks like?” Do you have this information available to you so that when we sit down together, we can say, look, we expect this amount of invoicing in month one, we collected in month two, it gets right down into that nuts and bolts? And more important, “Have you planned your organizational growth to meet your sales plan and is your product roadmap supporting both?” So I think when we look at it in terms of mistakes that are made early, especially when it’s a VC-backed startup, one, it’s that if ever important cash forecast, but two, it’s having the infrastructure, what we call the financial core, having that financial core set up so that a all of your numbers are coming out without guesswork. Number two, that cash forecast is coming out without a lot of lifting in order to make it happen. It should be something that’s refreshed once a month. You sit down with your CFO or whoever it happens to be. And you look at it and say, okay, here’s where we’re going to run out of cash, because the last thing you want to do as a startup CEO is run your company out of cash, right? You’re dead. You can’t spend net income. I don’t care what your GAAP financial statements look like. I do because I’m recovering.

Jacob Hollabaugh: You care about all of them.

Anthony Nitsos: But my name is Anthony and I’m a recovering CPA. Right? Okay, I get it. I know how to put the debits and credits together, but for me, that’s like the foundation of the building, if you will, the building itself. Is that ever important cash forecast? And like I said, whether you’re a bootstrapper or you’re a VC-backed startup, you need to know where your cash is going for very important reasons. If you’re a bootstrapper, where are you going to put your effort? Can you afford to buy that new salesperson to come in and help you grow the top line? Do you have the excess cash that you can invest if you have tech debt? Tech debt is a firm that we come across a lot, which is the original tech that was used to develop. Your software is out of date and it needs to be redone. Okay. It’s no longer efficient. It’s got a lot of problems with it. There’s new technology. Do you have enough liquidity to go in and fix your tech debt? Because if not, it’s going to end up biting you in the backside at some point. So there are a lot of common mistakes, but I’d say that’s number one is just not planning your cash properly. And in order to do that, you need to have a financial core set up that gets you that information easily. That’s mistake number two is you had somebody who’s not a SaaS expert set up your financial systems.

Jacob Hollabaugh: And once that infrastructure is in place, it’s probably a lot harder for someone like you to come in and tear it down and remove and build the new one versus right at the start.

Anthony Nitsos: We’re pretty good at it, I would say it spends a lot of our time, but I want to say never. I have rarely come into a first-time client. And within 10s, I’m going to know exactly how much work we have. And the great thing is, it is a tremendous tool. But there’s still this thing called what I call wetware, which is what exists between my ears and the ability to look at something like that and quickly assess it. And then things like QuickBooks and Xero, whichever system that you happen to be using when you’re starting out. And by the way, I have a recommendation there. Stay away from Xero. I don’t care if all the Europeans love it. Its reporting system is just absolutely backasswards, really hard to work with. QuickBooks online, if you have the accountant’s tools, allows us to go in and mass-move transactions all over the place. So you’d be surprised. It really doesn’t take us that long. We’ve been doing it. That’s our expertise, right? This is our bread and butter. But to come into a company, the first thing we need to do is set up that financial core. That’s the financial reporting system, the cash forecasting piece, and the KPIs that you need. As a SaaS company. It usually takes a couple of three weeks. It’s not really actually that long.

Jacob Hollabaugh: Basically, you’re creating the proper map for them like you’re not seeing the field correctly because you’re pulling the wrong information or putting in the wrong spots. Or maybe you’re stuck on, well, these numbers over here look good. And so I want to keep looking at those and ignore the ones that actually matter. You’re coming in and giving them no. Get rid of that map. Get rid of that view. Here’s what you actually need to be looking at and have it accessible at all times, at any moment, so that you’re actually making the right decisions moving forward.

Anthony Nitsos: And if I may add, the other common mistake we see is the tech pile. We’re all familiar with the firm tech stack, and it’s usually used in the context of the engineering and the development team. You’re like, what tech stack are we using in order to build this? The tech stack that I’m referring to is everything in the back office that you’re using and in the front office that you’re using, which is your CRM. Whether it’s Salesforce, HubSpot nutshell doesn’t really matter who it is, what you’re using for CSM, whether it’s vitally or whatever software you happen to be using for your success team, your accounting system. And the problem that we’re finding is that instead of this being a coherent, cohesive, integrated set of systems, it’s, “Oh, we need an accounting software. Great. Let’s go grab that. Let’s go grab QuickBooks.” Everybody’s using “Oh, we need payroll. Let’s go grab Gusto.” “Okay, let’s go. Go get paychecks or whatever happens to be.” When we need a CSM, “Let’s just go grab that.” We need a CRM, “Let’s just go grab that.” And nobody’s sitting there saying, how are all these going to fit together?

Jacob Hollabaugh: It’s not stacked. It’s I get the pile now. It’s just all thrown in there. It’s not actually connected and stacked together.

Anthony Nitsos: Right. It’s all thrown together. And the problem is what happens is a simple question like “Who’s got the customer list?” Well, CSM has one, sales has one, accounting has one, and they’re not the same. Now they should be identical. So one of the things that we laugh about is how bad is the tech pile. Here’s how smelly is. Do you need the little poop emoji in order to describe it? Because that’s usually another thing that is a common mistake is that you’re just basically willy-nilly going out there. And there’s of course, you need a software solution for whatever it is that you need. Okay. I’m not faulting that. What I’m saying is that unless you’re doing it in a planned manner, where these things are talking to each other and they’re integrated and they’re using common records. Then you end up building yourself a lot of inefficiency and a lot of problems later on. When it comes to data analysis and trying to figure out simple answers to simple questions like who’s the customer? When did they start? When are they renewing? Those are really critical.

Jacob Hollabaugh: Absolutely. And that comes back to where the folks within the company need to make sure they are talking to each other or has one person who is the point person to make sure those conversations are happening. So it’s not just the salesperson like, I need this piece of thing, I’m just going to go get it on my own. And now it’s here in the pile no one else even knows. And it’s not connected to everything else. So definitely that interconnectivity extremely important. The final kind of pivot I want to make is I want to ask a couple of kind of business personal development type of questions here to close out the show, one of which is the favorite question I have to ask a lot of folks in positions like yours. And the other one, though, is another one of those topics that’s come up, not even really throughout the year. In the last couple of months, we’ve had a lot of different folks in the CFO or fractional CFO role on the show, and it has come up routinely that the kind of changing role of the CFO, and it’s actually come up with different C-suite, basically the changing roles of all the C-suite positions, whether it’s been CTO, CIO, CFOs that have come on the show and how there’s just more of a decision making that is going into each of those roles where it’s not way long ago it might have been just the CEO makes all the decisions. All the other people come with their little bits of info that they give to the CEO to make those decisions or to drive growth and make change where it’s now being a little more delegated, where a CFO isn’t someone who just here’s the report, here’s the numbers. You can do what you want with them but is now in a much more prominent position, this is what we should be doing based on these numbers, or we should be able to drive growth drive change based off of my expertise. And so I wanted to ask you, over the course of your career, and especially in these last few years, going through a lot, acting as the fractional CFO for a ton of companies. Have you seen the kind of role of the CFO or the financial department change over the course of your career, and if so, what have you seen take place?

Anthony Nitsos: I would say, No, I haven’t seen the evolution because I’ve always approached the CFO role as being a strategic position. I say that the CFO should know just as much about the business as the CEO, if not more. And the reason is because there isn’t a single decision that happens in the company that doesn’t have a financial impact. Everything ultimately shows up in the finances. If you’re going to be an effective CFO, you need to pretty much know what’s going on in marketing, what’s going on in engineering, what’s going on in HR, what’s going on in every department, not just what’s going on with the numbers. But why are those numbers showing up the way that they do? My original training was in human medicine. I was actually in medical school. I like to brag that Michael Crichton and I have same history. We’re both med school dropouts, but that training was critical to me in my entire career, which is that I’ve always approached solutions from. I’m not here to treat the symptom. I’m here to find the cause. And it didn’t matter whether I was a process re-engineer, whether I was a Six Sigma black belt. I’ve done all of that stuff. Like I said, my background is mostly in operations. I’ve always been and I was trained by the Japanese. Right? In quality management, it all comes down to what is your root cause and what is the corrective action. But more important, why did this thing happen? So when it comes to finances, I’ve always looked at it and said, “Why is this number the way it is? Not just presenting it, but why? And in order to answer that question, I’ve had to become the expert in each company that we’ve come into to say when we first onboard a client, my first questions are not “Show me your financial statement.” Believe it or not, it’s “Who is your customer? What’s your value proposition? What’s your go-to-market strategy? How is your technology been supporting you and or hindering you in this path?” Those are the kinds of questions that I’m most interested in first because that gives me the insight. So when you talk about the evolving role of the CFO, what I look at and say, if you’re coming into it now saying, hey, the CFO needs to be more strategic, I would say you’re probably 20 years behind the curve because there are a bunch of us out there who have been doing that for a good long time, because that’s the best way for us to function. CFO stands for, I want to say Cash Flow Oracle, okay? And in order to do that properly, you need to understand literally everything that’s going on in the business. There isn’t a single area that you can’t understand. And that means I need to be able to speak with the engineering, the CTO, in a language that he or she understands. I need to be able to speak with the customer service department in language that they understand. And then I’m translating all this for the CEO. If he or she needs it translated, or if they don’t, I’m there to help them. I’m a strategic. Enabler. That’s what the CFO role should and always has been in my mind. But I think that comes from the fact that my background, I didn’t come from accounting or finance first. I came from a very different background. I came to accounting and finance because, in my mind, a corporation is no different than a human body. It’s all a bunch of interconnected systems, all of which need to be working harmoniously in order for the company to be healthy. And there are ways that you can maintain that and prevent things from going wrong by being aware of what’s going on and how to nurture it and address it. That’s my approach. That’s, I think, why SaaS Gurus, is a little bit different, and why our clients stay with us for so long is the fact that they can ask me a question and I’m going to know the answer, and if I don’t, I’m going to find it. And the question is, why did this happen?

Jacob Hollabaugh: I love that, and that’s definitely speaks to why ahead of the curve and what’s brought all the success in your career and with the companies you’ve been a part of certainly. The final question then I want to get you out on is because you’ve worked with so many companies and have so many clients here with SaaS Gurus, I always like to ask folks in your position this question, if you could look at all the roster of companies you’ve ever been a part of, worked with the SaaS Gurus before or after anything like that? Are there any characteristics about either the culture, how they operate, something specific about that CEO or leader of the company? Any characteristics that stand out to you that when you go into a new client, you’re onboarding a new client. If you saw this characteristic or two, you’re immediately like, that’s a company that’s going to be successful. If they’ve already got this, they’re going to be successful. Is there anything that stands out to you that you can really pinpoint successful companies based off 1 or 2 characteristics really stand?

Anthony Nitsos: Assuming that you have the right product-market fit, right? That’s probably the number one. If your product doesn’t fit the market, then you’re not. I don’t care how great of a CEO you are, you’re not going to be successful. So let’s say we have the product market fit. It’s the CEO that knows what they don’t know. Hires the people that know it and gets out of their way, period. That’s what it is. I can’t boil it down to anything. And that is a very clear differentiator for us. And usually we can tell within the first month or two what kind of CEO we’re working with and whether they’re that kind of CEO. And those are the ones that pretty much history has shown, they’re the ones that are going to get the better valuations. Why? Because their companies are run better. They empower their people and more important, they hire the right people.

Jacob Hollabaugh: That’s really good. Yeah. Anthony, this has been a real pleasure for those listening who either may want to follow you or learn more about SaaS Gurus. Keep up with everything you and the company have going on. Where would be the best place for them to go to do so?

Anthony Nitsos: I wish I could say I have an e-book for you, but I’m a little bit cobbler’s kids not having shoes when it comes to this whole digital marketing thing. All of our clients come to us by word of mouth. Board members or VCs or whatnot usually refer them to us. So I’m a little bit of a newbie when it comes to this digital marketing thing. Okay, I have an extremely rare last name as I was mentioning to you before we started, N I T S O S. Is one of the rarest names on the planet, so if you Google my last name, you’re probably going to find my LinkedIn profile, Anthony Nisos.

Jacob Hollabaugh: If you end up in Australia, that’s the wrong one. That’s the only Anthony Nitsos out there.

Anthony Nitsos: He’s still in college from what I can tell anyway. So yeah, you want the Anthony Nisos that SaaS Gurus based in Ann Arbor, Michigan. And from there you can get onto our website. There’s an easy link to contact me if you want to sit down and chat. I love talking with people I don’t charge money to talk. If you want to get to talk to me about something about your business and find out if we’re a good fit for you or not, and then hopefully soon, my Chief Marketing Officer, I have been working with her for the year now, we should have our book ready to go, where now I can say, “Hey, go grab our book and read it and if you find it interesting, then maybe you want to reach out to me.” Because everybody says, “Hey, go to my website or contact me.” You know what? We’re a niche company. We’re not for everybody. We’re primarily for the early-stage companies. But if you have an accounting person or a controller or somebody who you really love and want to keep in your company, but they just don’t know SaaS, we work with those companies too. I can’t tell you how many times I’ve educated VP of finance or a controller on here’s how you do it for SaaS. And then they’re empowered and they’re off and running. So I like to share the knowledge I think of myself as a guru from the perspective was I love to teach. I don’t like to necessarily deny people knowledge. Of course, it’s like that’s what it should be all about. So if you Google Anthony Nitsos, you’re going to find me, like I said, because it’s such a rare last name. I’m on LinkedIn, I have a website, saasgurus.io, easy to find. Those are the fastest ways to get a hold of me. I pride myself on getting back to people within 24 hours, if not sooner.

Jacob Hollabaugh: Love it! Well, we will link to those and more in the show notes so you don’t have to type into Google yourself. Just click the links in the show notes wherever you’re listening or watching. Anthony, thank you so much for your time and knowledge today. I’ve greatly enjoyed it and hope to speak again sometime soon.

Anthony Nitsos: Great! Thank you. I really appreciate the opportunity.

Jacob Hollabaugh: If you enjoyed this episode and want to hear more, head on over to soarpay.com/podcast to subscribe on your podcast listening platform of choice. That’s soarpay.com/podcast.