The CFA Advantage: Insights From A CFO
00:03 Welcome to the AXIS Effect podcast where you’ll hear the most compelling, provocative and real conversations with industry leaders and innovators in tech, sports and entertainment with our host and CEO of well-known PR firm, AXIS Entertainment, Sarah Miller. Hi, this is Sarah Miller, CEO of Access Entertainment and your host for The Access Effect.
00:28 And I’m so excited to have Kristian Marquez, the CEO and founder of FinStrat Management on our show. And I’m only going to fan over here for a second, Kristian kitchen, in my ecosystem of VC startups. And you live in Montana. I do. Sarah, good afternoon. Thanks for having me on. And I know you love this. I didn’t want to chat too much prior, because the fact that you work with startups and VCs and all these companies, we deal with startups every day.
00:56 We deal with great products, amazing companies, platforms, but bad leadership. We deal with VCs who come in one day. Hey, everything’s great. And then Monday morning meetings are crickets on our calls because the VCs fired everybody at midnight on Sunday night because they didn’t feel like they had good leadership. So I love that you’re that guy for me to talk to you right now. And so I know I asked you, you don’t fund companies. You’re not a VC, but like you deal with VCs, you deal with startups.
01:27 Give me a little bit of what you do with these guys because you groom leaders, I’m assuming, to better manage the money, the funding so they can be sustainable. And I know you know the stats, 98% of most startups fail for so many reasons. But we have seen so much with Silicon Valley bank crashing and so much going on with the startups being effective. Talk to me about what are you doing for these guys and where are we now compared to we’ve been the past three to five years?
02:00 Oh my god, so much to talk about, Kristian. Sure. Sure. Yeah, so I’ll start with a little bit of background on the firm. I think it’ll be a healthy foundation to launch a bigger conversation on what we see taking place in the market right now. As you mentioned, founder, CEO of FinStrat Management, we’re coming up on, oh my gosh, six and a half years in operations. Today, we have three lines of business where effectively we’re doing accounting, finance, and reporting for three different sets of stakeholders.
02:32 So founders, entrepreneurs who have a vision and want to bring a product or service to life. Though we focus predominantly on software, there’s definitely an element of hardware and professional services baked in there. We also work with high net worth individuals as functions of angels. And so you think about investors out there who have a significant portion of their portfolio invested in startups.
02:59 And so unlike their public security counterparts, it’s a bit challenging to get information and understand how that investment is doing. And we offer a service that not only gets the sand out of the gears, but yields additional benefits like continuity. And so one of the things we often see is, oh my gosh, you know heaven forbid I become incapacitated. My spouse has no clue what we’ve invested in. And heaven forbid, she has to go comb through Gmail to figure it out. Yeah We solve all that.
03:28 And then last but not least, venture capital, or just institutional investors, but predominantly VCs. They’re a business, like the founders, they have unique accounting and administration needs. We fulfill them. But perhaps more relevant, and this is actually somewhat exciting because it’s a newer development. So if you think of the world of venture capital, I’m going to oversimplify it, but their end goal is to produce a return for their limited partners, their investors.
03:58 And the means by which they do that, again, I’ll oversimplify it, but so identify founders who meet their investment thesis and in some cases actively seek to nurture those relationships such that they can eventually monetize their business. I want to stop you there for a second just to make sure. Yeah. You work with the VC. So there’s so many proposals we see every day for startups needing funding.
04:27 Do you guys kind of vet them out before the VCs really jump in? I mean, do you work that closely with VCs to where, unless I misunderstood that, you are beating up the teams, the technology, the platforms. I know you have a lot of tech background with SaaS organizations and stuff. Are you betting out with the VCs as a partnership to help them?
04:48 Hey, look, this is a really good company to invest in, from the leadership to the product, the front end, back end, or do you just come in after the VC say, hey, you know what, Kristian, we got one or two companies we want to fund, do the due diligence. I know there’s always that due diligence phase. Which part of the investment phase are you coming into? It actually runs the gamut. And so we’ll have a cold outreach from a founder who realizes they want to raise outside equity, and they want to be prepared.
05:19 And so we’re a great partner to assist, bring that to life. We’ll see instances where a VC says, hey, Kristian, we kind of like the management, we like the product, but their financials need some TLC before we cut a check. We’re going to introduce you. And then last but not least, they cut the check. And then as part of that, they would like the founder team to have access to a fractional CFO. In addition to gap compliant financials, dashboards, modeling, everything that you would expect.
05:49 Like a lot of them get the tranche funding and the VCs, just give it to them. And nine out of 10 times, I hate to say as a PR firm, we’ve seen them all completely screw it up and stuff. I think having somebody as that CFO to make sure funds are going in the right direction. So we had a client. I’m not going to mention the name. They’re not around anymore, so I don’t care. They decide, oh my God, we just got funded. We’re going to get half a million dollars at CES. And we’re like, you don’t need half a million dollars.
06:19 You know, go big, go home. We’re going to blow it up. We’re like, yeah, no, no, no, no, no. That’s not the smartest way to do it. Cat advisors on board. We were the agency. When we went through a Bible, Forbes, Fortune, Inc., we got them from every major player. They screwed every single one up. And we kept telling them, you don’t need all the 100 grand in swag. It’s so big. Within two months, we were done. No money. The vigils were done on the operations side. Their founding team got done.
06:49 And I’m like, you don’t understand VCs aren’t giving you that money to go blow and make dumb decisions. And like I told you earlier, we had a client we love. We killed it for them. We were the only ones on the phone. They kept nobody from putting their CFO within five hours late on a Sunday night. They’re all fired. And I love that you have that interim because I feel like a lot of young people, young kids, 23, want to be a CEO. We always call them seasoned CEOs when they’re in their 30s or 40s.
07:18 Most of our startups, startup clients are pretty seasoned. But at the end of the day, you know there’s no education on how to run a company and how to be a leader. And I look at kind of, you know, with Mark Cuban, it’s not just, hey, this is a really great company, give them money, but then watch the CEOs and the team squander the money. They don’t spend it right. They just spend it on bullshit stuff, egos, dinners, oh, but I’m doing this, this, and this, look at me. He’s looking at a different kind of funding where they look directly at the investors.
07:49 If you’re a good CEO and your product’s great, but it needs work, I could always put R&D money and the finances like with you into that, but I can’t build a good leader. So Aqua funded into the leadership where we could back up and find the money to redo the operations and that is great. But if I have a great company, but I’m a poor leader, and they’re not educated, and I don’t have somebody like you to really make sure it’s going, that company’s done within a year or two.
08:18 And I think 98% of startups in the past 12 years have seen follow down that rabbit hole. Shitty, ego-driven guys who don’t know how to run the finances, make the decisions, and don’t know how to lead. Is that what you see? And that’s why you’re there trying to help educate them, or are you really there just to make sure the money’s going in the right places? Well, I think you hit the nail on the head. And there’s so much to do with the maturity of the founders and the C-suite.
08:49 And the way I think about it, so my background is originally investment analysis. And if you think about it just purely objectively, it’s a risk reward. And so you can characterize or classify businesses as pre-revenue, free seed, series A, series B. And it’s basically another way of saying how much risk has been delivered because of how mature the company’s financials or performance are. And so revenue, you can argue, becomes a proxy for how capable or competent the founders are.
09:21 If there’s no revenue and you’ve been in business for a year, there better be a really good reason. On the other end of the spectrum, if you have a million dollars and you have 5% month-over-month growth or 5% plus, and your pipeline keeps growing, well, I mean, that’s a fantastic indication that you’re doing something right. Whether that’s because you’re in the right place at the right time or because your product is hitting the right demand or because and/or your management team understands their space really well and what’s important to their buyers.
09:54 And so we get pulled in pre-revenue. It’s generally the exception, but it happens. I’d say more often than not, we’ll get hired when a business is doing about a million and trailing 12 months. Gotcha. So it’s interesting. I mean, how long have you had FinStrat for? How long have you been? It’ll be seven years in January. Okay. And before that, I just want to try to back up a second before I have more questions. You were in the finance industry, asset management, analytics before that, right?
10:25 Correct, albeit my career took a very unique trajectory. So I started my professional career in accounting and finance, investment analysis. In this space, there’s a professional designation known as the CFA, Charter Financial Analyst Charterholder. Got that. It’ll be 20 years. I can’t believe it. Next year is crazy. But I ended up getting hired as a financial analyst for a small consulting shop. And the founder was a go-getter. And so ended up turning into consulting and healthcare IT, was there nine years.
10:54 And a year after I left, they IPO’d at 4.4 billion. And so really unique experience, effectively going early stage to I think when I left, they were just shy of half a billion in revenue. I was general manager, had responsibility for about, I call it a quarter of the company’s top line, and ended up leaving and co-founding a telemedicine startup with two physicians.
11:23 To your point, I’m biased, but I believe I’m a competent, organized, hardworking discipline. But after we raised $2.5 million pre-revenue, and then within two and a half years, closed the door. I’m hardwired to win, yeah but I learned a lot of valuable lessons. It doesn’t matter how smart or I think I am or what I believe the market wants. Really, at the end of the day, the best advice I can give any founder is someone going to give you money for what you have. Because if they aren’t, it doesn’t matter. Very impressive.
11:52 Honestly, it’s so impressive. The reason why I wanted your background, you know I hate to kind of dig into the past five years because we’re so I think hopefully pandemics in a rearview mirror, where I see a lot of people making excuses to not lead. And I feel like we were getting calls from the press during the pandemic. Hey, what’s going on? I don’t really know. They go, we’re not seeing any good leadership. So besides the podcast, obviously, we’re a PR firm, well-known in the startup space.
12:19 We also produce and we own and run the largest global tech award show, the Media Excellence Awards, which honors innovation and leadership, and all things mobile, tech and entertainment, the mobile, the digital, the content, all the startups that are driving in. So they were calling us to see if we were still doing the MEAs. And of course we are. We didn’t do the physical dinner, but we couldn’t. But it was all we still ran MEAs, got through it. We just launched our 16th year submissions. Congratulations. Yeah, thank you.
12:48 And I’ve seen so many tech companies that kill me that there were such brilliant finalists or some winners. Some of them went on M&A. They went on IPOs and we’re so proud to watch that growth trajectory because we know PR exposure, you know leadership is critical. But then we see a lot that is just here today gone tomorrow. And you know I felt during the pandemic, technology got smarter. But some people got smarter and really hunkered down the R&D.
13:18 But it’s weird that we were getting the calls on the MEAs from the reporters, like, hey, we’re all reporting on the pandemic, staying at home. It was a really bad time for everybody. But a few of them really were like, but who’s really leading? Who is staying on as leaders? Here’s bringing their country to the next level. Here’s who’s doing it the right way. Because we always feel you’ve got to be more intuitive. You’ve got to be more creative. Think out of the box. You’ve got to really lean into technology and really figure out where it’s going and why the world shut down.
13:47 You have a chance to breathe and get ahead of that to make it better. But I struggled seeing leaders in technology. I’m only going to focus on tech because like you know this is our world is tech on the startups. You know There’s med tech and there’s all this other stuff. I mean, you know anywhere from the payments, financials, tech, everything in the mobile and tech space, I struggled to find and see people step up and lead. And I’ve seen a lot of them fail and they didn’t deserve to fail because of the market or they didn’t understand PR.
14:21 And I know PR and public relations is not the same thing as publicity and it’s shifted. Building a press release and going out there isn’t going to work. You’ve got to be seen and heard as a leader. Everybody’s fighting for this global race of recognition. You’ve got to be at the right time. You’ve got to really be more creative and your PR has to be more strategic. It’s not just publicity. I’ve seen that great shift from an agency standpoint.
14:47 Have you seen a dynamic shift of how people are coming into the market, how they’re leading their company, why they’re not stepping up and leading like they used to. I mean, is it because the whole financial market has shifted? Or are you just seeing that lack of education in early stage companies? I mean, what is it why we are not seeing the leadership that we used to five, six years ago? Yeah, so I think there’s a couple of things going on.
15:16 And let me preface by saying we’re very fortunate. So today we have over 30 clients. And just given my role as president and CEO, unfortunately, I don’t get to know the work with them as closely as I would otherwise like, but I’ve interacted with all of them. That said, the feedback I get from our fractional CFOs is positive. There’s generally people who care, they have a vision, and they genuinely want to bring innovation to the masses or their segment. Really just, if anything, deal with many of the struggles I think even the most successful companies have today.
15:48 And that is that sure, there may be flavors of a formula, but there’s still a lot of iteration that has to take place. And so you have to figure things out on your own. That said, answer your question. Definitely with the pandemic, getting everyone remote. I think early stage businesses were somewhat at an advantage because it seems a lease or a physical office space was the exception. And the good news is somewhat of a wind in their sale was that we’ve seen a lot of tools come to market.
16:14 Zoom is a great example where people started leveraging technology a bit more to deal with the fact that you’re now spread out across a very vast geographical area. And if you really think about it at the end of the day, I’ll oversimplify. But technology, it’s a productivity multiplier. And so businesses now are perhaps able to do a little bit more than they were before the pandemic. But that said, I think if there’s now a challenge, it’s like, how do you foster culture if you’re not physically face-to-face?
16:44 In our experience, it’s a combination of A, we set aside a budget to fly everybody into one location, at least once a year, if not twice. And the idea is simply, hey, we genuinely care about each other. We want to spend time. Unfortunately, we can’t do it day in, day out. But hey, maybe we can at least do it once every 12 months, if not twice a year. So that’s one. The other one is there are a whole host of other tools that are really doing a great job. We recently onboarded a web-based tool called Roam.
17:15 And effectively, it’s a virtual office space, complete with floor plans, where now every member of the team has their own office. And you can see everyone and go knock on somebody’s door or go to the team auditorium. And so again, the spirit of it is opportunities to really engage each other in a traditional way by mimicking behaviors that were in the office. You know Hey, Sarah, I’m just going to knock on your door. How are you doing? Oh, here’s your bookshelf. Oh, who’s this picture of?
17:41 And so they’ve created a virtual environment where we can do the things that we had grown up doing professionally. So that’s definitely one. The other big one, though, and this is affecting both founders and investors alike, is the current interest rate environment. And so no secret, the Fed’s been raising rates since March of last year. A longer string of interest rate increases dating back to the early ’80s. Everybody has been impacted in some way, shape, or form. So both founders and investors.
18:12 And I think this is really important. I had someone offer an analogy, and I thought it was a great one. If you think about a venture capital firm investing in an early stage business, it somewhat mimics a bond, like a normal bond, but one that doesn’t pay a coupon. And one that has a maturity of anywhere from five, maybe seven, 10 years. That’s a long time to have money invested in a company in the absence of dividends, especially when interest rates are now higher and you can perhaps invest in something that has less risk.
18:48 And so from my perspective, it just means now that it becomes a little bit more challenging to raise capital, whether you’re a founder or a VC. It’s definitely happening. I read about it every day. But I think if I was in one of those two groups, and I’m listening to this, but I’m sure they’re already thinking about it, what matters most? And I think maybe a year or two ago, people would say, oh, we need to see founders be profitable. I think there is some truth to that.
19:18 But I think we’re kind of getting back to, if you’re growing fast enough, we won’t insist that you’re profitable, because wanting to grow is still very much part of our exit strategy. And so I think the big thing that founders should be asking in VCs who actively engage founders should be, hey, if you’re not on a path to profitability, at least share with me what your plan is to see material growth. Is profitability or scalability? You have to have one or both to really be able to move forward.
19:48 Agreed, 100%. And so that’s what I see today. Those are the two big factors that, at least, especially when our fractional CFOs work with our clients, we’re getting the C-suite to think about. So ask a question. If you’re coming into and you’re looking at startups, companies come to you, VCs come to you. What is it that you look for specifically?
20:13 What are the top three to five things you need to see from an early stage company, our startup, in order to greenlight the investment or to step in on this? Yeah. So really, it’s a shared philosophy on what it takes to be an effective CFO. So case in point, we have competitors who only do or only serve as a fractional CFO. They don’t do the books. They don’t manage the back office.
20:44 And my intent is not to minimize them. However, this part I can’t overemphasize. One of the things that’s really unique in our role is when we onboard a client, almost like clockwork, the financials we inherit are a mess. And they need a significant amount of TLC. Everyone says, hey, these dashboards are amazing. I need a forecast. And we said, that’s great. We agree. But unless your financials are set up on an accrual basis, your chart of accounts is set up for a SaaS company.
21:17 Whether you or whoever was doing the books before has the wherewithal to allocate expense by department. These things need to take place. And so during my sales conversations, I share it. We only take on a client if we get responsibility for the books. We get responsibility for collections and AP and overseeing payroll because our experience has taught us that in order to be an effective CFO, everything else underneath needs to be in order and clean and in a great spot.
21:49 Otherwise, it’s very challenging to do your job. Have you seen any in the past few years, at least, have you seen any startups fail to where they were open leadership to really making some big changes and saw them pivot to be successful to the M & A IPO stage? Are you seeing more of those kinds of turnaround companies now that we’re out of the pandemic? Yes. Definitely nimbleness is a key attribute to success.
22:15 I can think of some of our existing clients after a handful of pivots and trying to figure out what a scalable revenue model looks like, finally figured it out. I think to their credit, it’s a realization that if something isn’t working, you need to change. Fortunately, at least for our client base, they’ve generally been. I don’t know that we’ve had to necessarily push the concept. We definitely support the concept. And so I would say that’s actually the rule for our clients.
22:41 And if I look back over the six and a half years, there’s only been one client, honest to goodness, that has gone out of business. And I would tell you that it just happened that their model was very hard. It was transactional-based. They were basically, you remember when you go to the grocery store and you can contribute to a charity by rounding up your transaction? There’s something similar to that. The concept was phenomenal, facilitating charity, but it’s a volume business.
23:08 And in the absence of enough capitalization to get the volume that you need to bring that to life, it’s hard. That said, of our 30-plus clients, they’re the exception. So very fortunate in that regard. Obviously difficult for me to objectively say to the degree that we’ve had a hand in the rest of our client’s success. But I can share that our other CFOs will also reiterate what I’m saying to our founders. I think you have in a roundabout way, whether it’s a direct touchpoint or at some level, you have a direct impact on the success of your clients.
23:41 I mean, you see the analytics, the market more than you do because sometimes you just can’t see through the fray anymore because you’re so focused on the competition or your product or your leadership is so critical. Let me ask you a question. What advice would you give these startups? I mean, you know if I came to you because we deal with startups all the time. Two-part question one, you deal with different phases of startups. So when clients need a second round or the round, they don’t have the bootstrap.
24:11 Let’s just get past the bootstrap because the bootstrap is a great idea. You got to get somebody to get it off the ground. So you have to go after your A round, your first big round to survive, to be sustainable. What is your advice for these startups? Like, you know, if I’m a startup and I have a great company, but they’re that roadblock of, okay, I’m funded, bootstrapped, but I gotta get that next level. I love the challenge of seeing companies get through that, get across the river and get off, I call it Loft Life Support, where they really are a viable company.
24:45 But a lot of them can’t get across the bridge. What is the best advice for these guys? It’s actually, the great news is it’s actually a very objective answer. And so one of the things our fractional CFOs will ask is, well, what’s the goal? If we were to fast forward ahead, what are you trying to accomplish? And everyone answers almost always the same. I want to sell this company for a fill-in-the-blank X amount of money.
25:11 And so the next question we ask is, great, well, what’s your time horizon look like? And so for example, let’s just say someone says to me, “Kristian, I want to sell this business for $100 million in five years.” I said, “Great. I can create a financial model that shows where your revenue is today, what it takes to get to a $100 million sale based on conservative multiples.” Just for sake of example, let’s just say that everyone agreed that 10, which is kind of high in today’s environment.
25:41 But let’s just, for the sake of simple math, say that they could sell their company for a multiple of 10 on recurring revenue. And let’s just say they were doing $10 million in ARR. If they were doing a million ARR today, then we can easily show what a growth rate looks like to get from a million to $10 million over five years. And then we just start asking very simple questions. How realistic is this growth rate? Because we have access to benchmarks. In our case, we have access to other clients. I know what’s reasonable.
26:11 And if you’re within the sphere of reasonableness, then great. Now we start asking questions, well, how much should you be spending on cost of sales, product development, sales and marketing, and GNA? We’re in possession of those benchmarks as well. And so now we can start to put together, OK, well, this is how much it’s going to cost. You should anticipate spending over the course of this time to get to this exit. And then we just ask the next question, do you have enough cash? Do you have the pipeline to support this growth? And if you don’t, well, hey, we got your answer.
26:42 You’re either on track or you’re not. And if you’re not, we have to make changes. If you’re realistically going to see this type of exit, presuming, again, that everyone agrees on the molten. So for the founders who are listening to this, ironically, I’m oversimplifying it, but that’s the starting point, is having a plan. And we can model this all day long. And in the past, I’ve served as a fractional CFO. I’m more in a traditional CEO role, given our growth and success, knock on wood.
27:12 But when I started the company, I was serving as a fractional CFO. I personally have helped clients with exits. And these are the exact conversations we’ve had with them. I always tell my clients, I always, when I went to these guys and all the panels I’m on and stuff, you know the first day you decide you want to open a company, be a startup and create it is the first day you need your exit. Always plan your exit the first day you start. You have to have that goal. And it’s really weird because I’m the worst person with my own company. Because my whole thing with the clients, you’ve got to have an exit.
27:43 You got to know where you’re going the day you start, know where your exit is and how to get there for us in the strategy. But then when people ask me the same question, yeah, I didn’t have a plan. Didn’t even think about it. You know And like 15 years later, you know we’re at top agencies, but I was an anomaly to that whole entire thing. So I always tell them, don’t lead by ego. And it’s so hard that you have to drink the Kool-Aid. You have to work hard. You have to believe in yourself more than anybody. But it just always has an exit today.
28:14 You start don’t lead by ego alone. Because I’ve seen so many people, their own self-enemies when they do that. And there are such good companies that just fell to their knees because it was ego-driven. So I think we’ve seen a lot of that change for the better. I think startups are taking it more seriously. I think they’re really asking for help. They’re understanding, hey, I’m not perfect. I don’t know everything. I need people around me that know more than me. So I can get through to where I need to go.
28:45 And like, you know, if you look at, you know, like Bill Gates, Steve Jobs, Larry Ellison, all these huge guys. I know Larry Ellison used to work with Oracle way back when he wrote a book, and he would always admit that people think he’s kind of an asshole. I think he’s kind of cool. Good sailor, but he always admitted, regardless of how tough he is, he knew he wasn’t the smartest guy. And the reason why Oracle became a billion dollar conglomerate, is because he surrounded himself with good people who knew what he did.
29:14 And I’ve seen that with so many of these guys and the books they’ve put out and these big, they know the very old-school dinosaur tech companies that we know that we all still work with, they all have that I got smart enough to know what I don’t know and brought people in to help me build. And that to me is the ultimate leadership. I agree. I’ll add one thing to that, though. And I think the part that nobody sees is the time. I don’t believe there’s any way to avoid doing 80-plus hours in the beginning.
29:46 And I do think that’s a big separator is just being the chief hustle officer. Because really, at the end of the day, the founders, the ones with the most equity, are going to be the ones most incentivized to bring everything alive, even if you’re doing stock options. And given how much there is to do to put an infrastructure in place and how just the time decay of burn and the impact it has on your balance sheet, my personal experience and what I’ve seen from some of the more successful CEOs is you’re hustling and hustle.
30:18 And I don’t mean working harder per se. I mean working smarter, but they’re still putting it out. Like I know the time of our startups, and I swear they’re clocking two hours of sleep. They do what they need to do. I have literally and we do that as a PR firm, you know people think experientially, you know well, we have this great media tour. We’re in the Wall Street Journal. We’re leading. We’ve done such tremendous stuff that we learn how to land jumbled jets and driveways.
30:45 We had AEG as a client, all three assets, digital mobile and integration of all the concerts. And we learned to land jumbled jets and drivers most agencies can’t. But people always say, oh my God, that was so amazing. How easy is it? Or when clients say, oh, PR budgets. Easy. You could do this within five, 10 minutes. We know what you guys are capable of. The sweat, the tears, the hours and the pain to go into making things look so flawless. And I do always take the credit as a leader. My staff has talked about grace under pressure.
31:15 When something goes wrong, we’d always have a plan B. You wouldn’t know that everything blew up because it’s so seamless and it’s so flawless. People think, oh, well, that was easy for you. So much time. Again, it doesn’t matter what we do. We work side by side with our startups. We grind through, we make sure they’re seen and heard. We are an agency. But because we’re so connected and have a lot of influence, we’re making BD connections and deals for them. So it’s what goes around comes around. We’re a team. We don’t stand on the sidelines.
31:45 We get to roll up blessings with them. And the time and the grind that I see some of these CEOs go through. It is so awe inspiring to see that success because I know no matter what they are putting in so much time. And like I’m so appreciative and respectful for startups, because I know, like you said, I know what goes into that. What the public sees, what the perception is, is one thing, but what goes in to get them there is so impressive.
32:14 Chief Hustler, that’s exactly what it is. I mean, it’s a one, but I have a first degree connection to Bill Gates, and he was employee number 80 at Microsoft. And he shared with me basically what we just talked about. I mean, Gates was working incessantly in the beginning and was just driven. And just kind of like the stories we hear about Elon today, they just work.
32:41 And the way I think about it is, you’re just getting to a critical mass where there is enough infrastructure behind you, presuming you’re going to keep going. And so, yeah, I mean, there’s definitely physics playing itself out. There’s inertia. You’re working towards momentum. Question is, where does it come from? And I think a lot of that just has to do. I mean, there’s so many variables. What are you selling? What’s the macro environment look like? What does your team look like? Well, it’s this environment.
33:11 It’s technology. You know We do a lot of go-to-market strategy. My case, because of your one degree of separation from Gage, he’s written in a few books, as you know, to his books, he is given so much credit to Patti Extremit and Wagner Extreme, his PR firm. The man he is a walking, talking CEO, the leadership, the power to drive the teams is all due. And he gives credit to Patty because she ran the agency and she took him on and created him. And that was like one story I always love.
33:41 That’s my first favorite story, because we’ve taken CEOs, turned them into media training, corporate training. We took one from $7 to $36, $189 million M&A within seven years. I mean, and this is a walking, talking power CEO because we’ve stuck out the good, the bad, and we believed in them more than ourselves. So I love that Bill Gates sees that and gives that credit to the PR firm and the CEO that he did, because I get that.
34:07 My second favorite story is with Steve Jobs, way back when he got to a point where he didn’t need publicity anymore. Everybody knew what Mac was. They knew what was going on. You know Apple and HP, Dell, they knew the whole thing. You know I’m a huge mac girl, so I’m a little bit biased versus PC. But he had a public relations problem. He needed to tell the story of why he was better. He needed to be seen and heard at the right time, the right place to move the needle, to create leadership and leave a footprint.
34:38 That’s public relations in a very strategic form. That’s not publicity. And he publicly went out. He goes, I don’t need publicity. I need to be smart enough to do public relations and get my story seen before he became Apple and created the ego. But there’s such pivotal stories that people always joke about. But you’ve got to look at where the root of those were, why these people became leaders, movers, why they left legacies because of how they started as a startup.
35:07 And I love that they all gave the credit to people around them who they knew they couldn’t get without. Those are my two favorite success tech stories. And then you know we just keep trying to make sure our clients understand. It’s not just a one-off recipe. Build it and they’ll come. And I do think my big thing because with Elon, with all of this, this is why I hate the media. And I’m a PR firm. And I know as I see a PR firm, I have to be universal and acknowledge everything.
35:37 But I hate the bullshit and spin of the media because perception is reality. And what you read and see around you perceives your perception, it molds your perception. So people do have that, oh, they have all this money, they have all this infrastructure, they’re doing so well. Because they’re ego because of this. What people don’t understand, if you look through the fray, take off all the bullshit in the media and social media, these CEOs, no matter what you think of them, like you said, they’re working hard. They’re hustling. They’re around the clock.
36:07 They are driving something forward at all times. I don’t think we give them enough credit. Regardless of what I think of Elon Musk or anybody, I know what goes on behind to get them where they are, to say who they are today. And I do love whether it’s a big guy like that or these startups. You still have to stand back and respect what these guys are going through on the day in, day out to keep their team together, to keep their sanity, keep the VCs happy. I mean, it is not an easy job being a leader and leading.
36:38 And I want to stay in the tech space, but I know it’s in every space. I just kind of focus on tech. So I know it goes beyond just tech. Yeah, I mean, you know my experience has been like many things. You have to have a few people who are born doing anything really, really well. I mean, they’re good enough, but like anything, you have to put time and energy into something if you want to get something out. And so I think a lot of that is experience. A lot of that’s perseverance.
37:08 Other elements, I think of maybe table stakes, character integrity, energy. But if there are any founders listening, or whether it’s tech or you’re starting your first fund, I think the big thing is, it just go. Unless there’s a really good reason to stop, keep pushing because will is real. Will is valuable. If you genuinely believe you have something great to share with the world, but is that to say that sometimes you may be on the wrong path?
37:37 Sure. Just stop, assess, and then figure out what the right path is. Yes, I’m OK if you’re going down the wrong path and you learn from your lessons to re-pivot to a better path. Because we know we’re all about, you know, like owning your leadership, get better and different. You’ve got to own your leadership. You’ve got to understand and keep going in the direction that you need to go and regardless. And I think if people say, oh, I never failed, I won’t make mistakes. I mean, I mean, that’s just we all have to make mistakes. I think we are who we are as leaders because we’ve learned from our mistakes.
38:06 We always talk about finding success and failures. It’s not a failure. There was some success that came out of that. Something happened. You went right, you went left, you got through it, you were better off. So I always see it as looking through the successes through failures versus saying, oh my God, we failed. We didn’t get funding. What do we do? Find the successes in those failures. And then follow those to get yourself to where you need to be. I don’t know if you really said it, but I’ve seen the memes with Nelson Mandela. I said some of the effects of winning or learning, I never lose.
38:37 Good. Which I like. It’s good. Wow. I feel like I could spend the next two hours talking about startups and finances and the whole funding thing. Let me ask a quick question. Are you seeing a trend specific to upcoming startups? Is it tech? Is it MedTech? Is it the payment? Where are the top two that we have to look forward to in the next few years? The top three are all the same. It’s all AI. Yeah, I knew you were going to say that. OK.
39:07 What is your feedback? What’s your feeling on AI? So AI is a tool. Question is, how do you monetize it? And so case in point, ChatGPT, amazing. But in the absence of charging a subscription, how are you going to monetize it? And so it’s just an example. My sense right now is that you have a lot of phenomenal technology that’s here in the near term and is going to have to look for a business model. And not everyone’s going to be successful.
39:36 I don’t recall the name that I was reading this morning about a company who was a unicorn last year. They’re doing layoffs, right? The AI company was a unicorn last year doing layoffs right now because you can have investors throw money at you all day long. But unless you’re on a path to material growth or profitability, it’s inconsequential. And so I’m extremely bullish on AI. I think what we’re seeing right now is similar to the Industrial Revolution.
40:05 Yeah I’m net bullish. I don’t think it’s the end of the world, like some people are saying, but I’m not a data scientist or engineer. So take what I say with a grain of salt. But I see the productivity it has in wealth. Wealth is a derivative of productivity. And if I’m representative of what everyone else is starting to do, we just are starting to scratch the surface. Yeah I was talking to my family member whose name I won’t say. He’s like, oh, I haven’t even you know it’s today.
40:35 He’s like, yeah, I haven’t really messed around with it yet. I’m like, oh my gosh, you don’t know what you’re missing. We had a podcast and we were using ChatGPT on and doing it just to try to break it. You know Because I know there’s certain industries that’s never going to apply to, like law. I mean, the law has to be very clear. And I know a few attorneys, good friends with some, and they’re still a little bit, we won’t use AI for this, you know? Probably a good idea. Did you hear about that lawyer who submitted a case based on GPT and all of the references were fake.
41:07 And the judge took them to task. But, you know, and this is the whole thing with the writer’s strike and in Hollywood right now. I mean, Hollywood’s a whole different mess because since the pandemic, the streamers came in, you know, they cap down in their subscriptions or upside down financially. You know, I did that whole thing. So now the whole big thing is AI. We don’t want to be replaced. But if I’m looking from a studio standpoint, if I have a burn rate of 5 million for writers, and you know we’re struggling because we can’t up our subscription, we’ve already capped that.
41:39 We’ve just got to figure out a different model. Well, can I cut my burn rate from five to four, whatever, oversimplifying it, and use AI to bring out some of this stuff? Well, I mean, so I am seeing because I’m all about leaning into tech. But I do see leaning into tech now as starting to create this fluctuation of our jobs. I mean, I’m not going to say, No, my God, we’re all going to be robots and we don’t have jobs. But I do feel if you’re smart, you’re going to keep your overhead down so you can be more sustainable and grow financially long term.
42:12 Yeah, you may want to lean more into tech, but I know that’s a whole different conversation because people are fighting and striking because they don’t want AI and technology interfering with their work. And I do think we’re going to see a lot of shifts into where AI is going to work and where it’s not going to work. I don’t know that I would want to fight the tide. I don’t think it’s a winning battle. I think it’s a question of time. But I’m also an optimist.
42:41 If every individual on the planet was their own business owner, I still think the world would work just fine. Yeah Probably another podcast, but there’s definitely a lot of interest in the world. And it really depends on your perspective, too. I mean, albeit I wouldn’t want to have been a typewriter repairman, but it changes. You just turn your attention to computers and look at Michael Dell. I mean, my opinion is that there’s always opportunity. Yeah, there’s always opportunity.
43:08 There’s always a lot to learn from the past as we move forward, which is great. I have a second having you on, Chris, and I feel like this is going to be a super long podcast. We need a podcast 2.0 with you on this subject. There’s so much to cover. My pleasure. Thank you for having me. That was so good for everybody. Where can everybody find you? Where’s the best place to come find you? Website is So Finn FIN, short for financial strat, STRAT, short for strategy, and then an abbreviation for management,
43:41 Best place to find you, Krishna Marquez, CEO of FinStrat Management. It was so good having you on the show. This is Sarah Miller, CEO of Access Entertainment, and we’ll see everybody next week. Thank you for joining us for this episode of the Access Effect Podcast. If you don’t want to miss an episode or download past episodes, be sure to subscribe to the Axis Effect podcast on your favorite podcast provider. To learn more about the podcast or our guests, please visit the access
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