42. Is it possible to pivot to profitability?
In this episode, we discuss efficiency, profitability and cash control with Libby Penn, the COO of Improbable.
We chat about the following:
How to find the right balance between profitability and growth.
The importance of well-documented data.
Being realistic about profitability
References
Biography
Libby Penn has experience in various business development and operations roles across a number of high-growth technology businesses on SaaS and enterprise models, B2B and B2C, in both the UK and the US. This has given her an in-depth insight into the complexities that come with the role as COO.
Summary
Gender roles and microaggressions in the workplace. 0:05
Bethany discusses the challenges of being a woman in leadership positions, including societal expectations and performative ally ship.
Bethany launches a series of free webinars to support first-time female executives and aspiring executives, focusing on topics such as taking a seat at the table and choosing the right life partner.
Brandon and Bethany discuss the challenges of navigating gender roles and microaggressions in their personal and professional lives.
Bethany shares an example of a leadership team meeting where a male colleague's swearing and apologies towards her created an uncomfortable work environment.
Pivoting to profitability for a B2B SaaS company. 4:55
Bethany: Analyzes company's strategy, identifies unprofitable areas for cuts.
Bethany: Looks at lease and office expirations, considers cost-cutting measures.
Bethany and Brandon discuss strategies for improving profitability, including renegotiating cloud contracts, focusing on profitable channels, and optimizing GTM motions.
They also discuss the importance of tracking data properly to make informed decisions about spend and identify areas for improvement.
Brandon and Bethany discuss partner strategy, testing, and doubling down on successful partnerships.
They emphasize the importance of hiring quality people who are well-respected within the partner company.
Pivoting to profitability, focusing on market strategy, operations efficiency, and automation. 12:42
Brandon and Bethany discuss the importance of qualitative analysis to validate data-driven insights for profitability.
Brandon and Bethany discuss the importance of operational efficiency and automation in a company's shift to profitability.
Balancing growth and profitability for startups. 15:55
Libby highlights the importance of balancing risk and innovation in investments.
Libby emphasizes product development as key to profitability, while Bethany focuses on balancing growth and profitability.
Data analysis, product development, and customer focus in tech companies. 20:03
Analyze cost of delivering product, profitability of product sets, and customer profiles to make informed decisions.
Prioritize bets on most profitable products and customer segments, layering up over timeframe (18 months).
Libby and Bethany discuss the importance of data-driven decision making in marketing, with Bethany expressing frustration at the lack of data sophistication in internal systems and the need for more rev ops professionals.
Brandon and Libby discuss the importance of understanding customer CV values and go-to-market motion.
Libby emphasizes the need for a solid customer base with a sticky product that provides value.
Customer success teams and their impact on product development and profitability. 26:19
Bethany: Customer success teams can eat into gross margin, especially when product is not user-friendly.
Libby: Good customer success teams can help with customer adoption, but implementation is also important.
Libby: UX teams struggle to deliver due to engineering and sales leaders' lack of time and willingness to listen to user research.
Using AI to improve product adoption and financial management in startups. 30:36
Companies prioritize user experience to drive commercial success.
Libby emphasizes the importance of financial acumen in business leaders, including understanding cash flow and opportunity cost.
Brandon highlights the challenge of accountability and controls in a company with a tight runway, and the need for transparency and financial literacy across the team.
Financial transparency and empowering employees to make better decisions. 34:48
Libby emphasizes the importance of financial education for teams, citing her experience at Blippo where transparency and knowledge-sharing helped employees stay motivated during difficult times.
Bethany expresses interest in learning more about financial education resources, and Libby suggests exploring pre-made materials or seeking help from professionals.
Libby suggests building financial literacy into onboarding processes to ensure employees understand how the business makes and spends money.
Brandon emphasizes the importance of VPs of Finance being leaders and communicators, not just number crunchers.
Libby emphasizes empowering employees to help build the business.
Employee X presents a new pricing strategy, improving gross margin.
Investing in people, understanding company finances, and empowerment in the workplace. 42:32
Bethany shares her experience of feeling empowered in some organizations but not in others, and highlights the importance of giving people access to power and information to contribute.
Libby encourages leaders to create opportunities for people to connect with them, such as monthly drop-in lunches or cross-functional working groups, to foster a culture of inclusion and empowerment.
Libby emphasizes the importance of understanding a company's finances to make informed decisions.
Unlocking the state of a business through data analysis can lead to clearer conversations with investors and improved profitability.