Mandy Hornaday: Hey, Darko, it's so great to have you today on our Growth Activated podcast.
Darko Socanski: I'm pumped to be here. Thanks for having me.
Mandy Hornaday: Yeah, I'm really excited to have you. You are our first CFO as a part of the C-suite series. We've been doing this now for the last couple of weeks. We've talked to CEOs, CROs, CTOs, and I think the marketing and finance relationship is very undervalued, or maybe under prioritized, in a lot of organizations. And having worked with you personally at a startup in the past, I know I've gotten personally so much value out of the relationship and partnership that we've had. So I'm really excited about today's conversation, bringing some of those insights to our audience.
Darko Socanski: That's awesome. That's very high praise. Thank you. And yeah, excited to be the first. I hope my colleagues agree with me. I'll share my opinion and hopefully we'll get a different point of view.
Mandy Hornaday: If they don't, that's okay. Yeah, absolutely. So Darko, let's start with your background. Share with us a little bit about how you've come to be in the role you're in.
Darko Socanski: Yeah, yeah, that sounds great. So I've been in finance basically for the last 15-ish years. I feel a little old saying that. But I've been in finance for the last 15 years, fell right into it after college, and have always kind of been within the finance pillar, if you will. And I've just really had the pleasure of working at both public companies and private early stage companies as well. I really fell in love with the early stage VC environment, and I've been really spending a lot of my time there recently. And just a couple bullet points to punch out as far as things I'm personally proud of is having taken three companies out to an exit, raised hundreds of millions of dollars in VC capital, and combined across my tenure, my colleagues and companies I've worked with have created over 1.5 billion in equity value. And that's one I'm pretty fond of. So yeah, now I'm just continuing to work with companies. Early stage, I started as a fractional CFO and then worked that relationship over time as these companies mature and that role becomes bigger. We grow into that together.
Mandy Hornaday: Yeah. Awesome. Awesome. Well, great experience. And obviously I worked with you at one of those very small, very small early stage startups that had funding. So, great to hear your perspective, and I think your background will inform how you'll be approaching the conversation today. And with that, I'd love to dive into the CFO persona and perspective a little bit more. So share with us, what are some of your biggest priorities as the CFO? What are you consistently thinking about, and what is top of mind for you in these organizations that you're a part of?
Darko Socanski: Yeah, I think the number one role of any CFO should really be runway and understanding how much time you have as a team to prove and deliver the amount of value needed in order to secure the next round of funding and keeping the ship growing. And so I think priority number one is just understanding how much time you have as a CFO. I think the second most important responsibility of the CFO is really to understand how value gets created at those companies. And I've had a sort of very colored background in terms of working with B2B, B2C, social mobile, consumer apps to enterprise B2B sales, and really everything in between, software, marketplace businesses. And so it's been an interesting experience, because you really get to sort of take a step back and just look at, how does this machine work? Where does value get created? How does the customer benefit? And so I think those are the two main priorities. You really need to understand your business, and you need to make sure you have enough time to reach your milestone.
Mandy Hornaday: Yeah. And perhaps this is a silly question, but how are you defining value? When you say value creation, is that revenue? Is it other things? What does that mean to you?
Darko Socanski: That's a great question. I think it obviously depends. It's company specific, but ultimately what we're trying to do as executives at a company is increase the enterprise value of the company. How much is the company worth? And so when I think value, I actually think about it through the lens of how much is the company worth and how do we increase the enterprise value for shareholders. As a function of that, and closely related to that, is the value that you're bringing to your users, whether you're selling software and providing and unlocking time savings, generating revenue, or you're providing unique connections, or whatever the unique offering of the business is. That is very closely related to then what drives enterprise value. But I think enterprise value is first and foremost the priority.
Mandy Hornaday: Okay, interesting. Well, I'm so glad you brought that up, because already I can see that I maybe haven't thought about the enterprise value in terms of that sense, especially at the B2B professional services company I was the VP of marketing for. We knew we had a board and we knew we were always trying to sell, but it was very rare that we talked about what our sort of value creation goals were and what we wanted to hit before the next round. Interesting. Very interesting. So how do you think that those priorities, so runway is obviously specific in the startup world and in the venture capital world, but how would you say that the priorities change, or would change, at mid-size to large enterprise companies from a CFO perspective? Or does it change? Are those still both very important?
Darko Socanski: I think they become even more important to understand and have a grasp around how it gets created. And, you know, if you zoom out at a very larger scale, the role of a CFO when you start getting into the public space is, you know, one of the objectives is really to create liquidity for your stock. And so you're working with the analysts to both sort of inform and keep them up to speed on what's happening inside of the company, where you're really trying to create the market within the public space to create liquidity and keep the transactions moving. And so through that lens, how much the company's worth is now a real time measure. How you get graded is publicly exposed. And so it's even more important the later and bigger you get. I think starting earlier just helps bring that into focus sooner. And I think it really helps drive alignment across the team. So it becomes more and more important over time. The sooner the team focuses on it, I think the better.
Mandy Hornaday: Okay, awesome. So what would be some of the business metrics that are very top of mind for you, that you are measuring the business health by or measuring the enterprise value by, that you always have maybe at the top of your dashboard that you're monitoring closely?
Darko Socanski: Sure. And if it's helpful, we can also just pick an industry or an example, like a SaaS company, and we can dig in if that's helpful. But sure. Yeah. I think at the highest level, the public markets set the comps for the private markets in many ways. And so you have a lot of those revenue multiples available to you, and there are tons of resources available that'll benchmark private companies.
Mandy Hornaday: Yeah. Sounds great.
Darko Socanski: What is your net dollar retention? If you're talking about SaaS, what is your ACV? What's your CAC payback period? Those are all really important inputs and metrics that investors that will be purchasing shares of the company later, and setting the value of that company, will be looking at. And so you have baseline metrics that are generally just available and are revenue times X, or whatever multiple, for the period of time that we're looking at. So I think that's kind of where it starts, but really important is to dig into the leading indicators. And more often than not, in these early stages, revenue will be the leading indicator, the most correlated metric to enterprise value. And so how we grow and retain revenue then becomes really, really important, and so are all the supporting metrics that come along.
Mandy Hornaday: Yeah. And just knowing that you're so tied into the VC community, how have you seen, obviously the investment scene has changed quite a bit over the last few years, especially for industries like B2B SaaS. How have you seen that model change? Or are there certain metrics that are even more important today that maybe we weren't necessarily looking at a few years ago? Just when we think about, I feel like we talk about it being growth at all costs a couple of years ago, and then that not being the case today. But what's your perspective on that?
Darko Socanski: Yeah, I think generally, as there's probably even like public knowledge by this point, you know, we've deviated back towards the mean, where business fundamentals are really important, and looking at metrics like revenue per FTE, per employee, becomes interesting. And, you know, how efficient of a machine can you build with the resources you have? I think in general, of course, things have been a little bit more focused on profitability and the efficiency of these businesses. But at the end of the day, the fundamentals are fundamentals. And as a CFO and as the leadership team, your goal is focused on driving value up. Whether you're getting a 20x multiple or 10x multiple or 5x multiple, that's more the nature of the external market and how it's valuing your business. As a team, you're moving the key metrics up and to the right in order to increase value. And so, yeah, I think there's been generally a reversion back towards the fundamentals, but I don't think that has at least changed my operating behavior within companies.
Mandy Hornaday: Yeah. Okay. And in your opinion, what would you, at sort of the most basic level, what would you say makes a great CFO beyond the focus on these types of fundamental business numbers?
Darko Socanski: Yeah, that's a great question. The best CFOs that I've worked with, because I look back and look at the mentors in my past, the best CFOs, besides sort of checking the two boxes of, what is our opportunity from a time and resource standpoint, and then, you know, how does the business create value? I think the best CFOs are able to bring the team along the journey, to convey what are, you know, a little bit abstract concepts at first, but being able to really bring the team along for the journey and convey these goals and objectives in a way that is actionable and easily understood by the rest of the organization. And so I think great CFOs are great at aligning folks to the objectives that help create the most enterprise value. That's one. And then two, they're just great at developing people to really aspire and grow into these positions, and are able to embrace that as, our job is to create value for our shareholders and enable them to do their best work. And so I think those two things probably are factors that I would consider things that make a CFO great.
Mandy Hornaday: Yeah, no, totally. I've worked with some great CFOs, yourself included, and I've worked with some not great CFOs, and the ones that I would say have, and it's only from my perspective, it's not even from like the X's and O's and are they actually doing their job? It's more of the, is there a partnership that exists amongst the key exec, you know, who are their business partners? Do they stay within finance and at the CEO level, or are they working hand in hand with other departments? Business alignment, or lack of business alignment, is one of the things I see all the time when I come into these companies as a fractional. I'm sure you see it as well, where it's just sometimes the CEO has a very clear vision or very clear goals, and then I think as department leaders, we all go off into our silos so often to figure out how are we going to impact that goal. What's wild to me is like, we all rely on each other. We're all interconnected and should be integrated. And yet a lot of those conversations don't actually happen.
Darko Socanski: You bring up a really good point. When I say a CFO is great at bringing the company along the journey, that is like implicitly dependent on relationships, and strong relationships between the executive team members and, you know, the CFO, and their ability to help really provide the information that should just intuitively align folks. I think the best case scenarios are when the numbers and situations are presented and everybody's like, well done. We just have to go do A, B, and C. Great. It may not be easy, but it's clear. And that's a huge win. Driving towards that clarity. So yeah, I mean, relationships are very, very important to that.
Mandy Hornaday: Yeah. So let's pivot into the marketing relationship. So I'd love to sort of hear, before we dive into maybe how you do or don't partner with marketing, or how you have or haven't, how do you view marketing investments as a part of the overall finance and growth strategy?
Darko Socanski: Yeah, that's a really big question. I think we'll have to wrap it up.
Mandy Hornaday: Loaded question. Take as long as you want.
Darko Socanski: Well, okay. So the first thing I think of when I hear that question, I kind of split that into two worlds. There are sort of marketing investments that have a very predictable return on those dollars. And I'm using the classical CFO language here, but it is important, because a CFO's job is really to be able to help predict the relevant range of where the company is likely to go if X, Y, and Z happen. And X, Y, and Z being goals, objectives, or metrics that get hit. And so to that extent, you know, marketing investments in one category fall into, they're easy to predict. I know what my return is on this, and I can rely on the performance of these dollars, or I can rely on the output I'm going to get after investing these dollars in this area. And we can use just CPL as an easy, obvious metric, but there's other investments in marketing like that. And then the other side is the little bit more nebulous, where we want to invest a million dollars, or 10, or a hundred million dollars in brand. And every CFO is like, ugh, and cringes a little bit. And the reason is not that they don't believe in the brand of the company. And maybe not every CFO is like that. But the reason why I think the traditional or most CFOs will cringe a little is because this is potentially a large, or even if it's not large, let's say it's a medium sized investment, and it's highly unpredictable. And so CFOs don't really like unpredictability. We're ultimately responsible for, you know, saying where the company will end up if we do, again, X, Y, and Z investments. And so when those investments are made, the company needs to be at that point, otherwise the CFO messed something up. And so that's why, you know, there's uncertain marketing investments and there's certain marketing investments. So I'd split that into those two worlds at the least.
Mandy Hornaday: I love that. And I hear you. And I guess I even just wonder, what about the things that are, where would you slot investments that are sort of table stakes, what we would consider table stakes? So like your core marketing technology, software, maybe like your marketing ops people who have to make sure everything is running in the background, things that maybe aren't necessarily tied to, in both of those buckets you gave me, I still view those as tied to revenue and growth, just one is predictable and one is a little more nebulous, to use your word. But then there's the operating side of, this is what we need for table stakes operations. Do you consider that as a part of one of those two buckets, or is that a separate line item for you?
Darko Socanski: Yeah, I can speak for myself, but I consider those more as sort of infrastructure investments, where you need the team, you need the tools to make the team more efficient. I think what most CFOs will ask when these are net new or incremental is, how much time will we save, or how much more productive will the team be? And I think those are reasonable questions, because it's not that the company shouldn't invest into those, but generally speaking, you know, marketing doesn't operate in a vacuum, and the CFO is looking at that infrastructure investment along with five others. And now we have the difficult conversation of which one, or which few of these, do we need to invest in? Or do we want to shorten our runway, and how much time we have as a team to deliver on the objectives, if we invest in all of them? And so it is important to understand what the benefits are going to be, one. But secondly, and you didn't exactly ask this, but I'll go there a little bit, the second important part of such investments is just accountability and just having clear ownership. It's not that, did we deliver or did we not, but how close are we to delivering on the goals that we wanted?
Mandy Hornaday: Yeah, no, totally. Well, and I loved your point about, holistically, you're looking at if we make all of these investments, and marketing is one of those, and then product and technology and sales, and like, are we willing as a team to reduce our runway? And I think so often in marketing, we maybe aren't thinking about the bigger picture. We're sort of just thinking within our function. And that's a really important reminder to be a part of your executive team first, and then, you know, think about your function second, in a way.
Darko Socanski: Absolutely. Yeah.
Mandy Hornaday: One of the things I, and Darko, when you talk about the incrementality of like efficiency in that instance, for some of those table stake investments, I also think that there's an opportunity from the nebulous brand, you know, things to leverage the idea of incrementality for that as well. Have you seen that done well in terms of, hey, we're going to run a test or a pilot and see if we get a brand lift from this, or what the downstream impact is? We may not be able to say for 100% that it was tied to that, but if we reduce the variables to where that's the only thing we tried that was different, we can make the if-then statement. Have you seen, I guess, have you worked with marketing leaders where they've done a great job of making brand a little less nebulous for the CFO?
Darko Socanski: Yeah. And I think in partnership with the finance function, and yeah, I generally throw brand into that category, because it generally gets categorized there. But I think there are very clean ways to measure its impact. I'll go back to first highlighting, if you understand how the business is creating value, and you understand what those key metrics, key sort of leading indicators are, then by investing in brand, those key levers should move in a favorable direction over a reasonable amount of time. And so the way I've seen this done really, really well in the past is you structure it as a test. And like, you may want to spend $10 million in brand over the course of the year, but you could also simulate what a million dollars spent in one week would be, or two weeks, or three weeks, and spend. And let's see how the metrics move. I think the trap that most CMOs and CFOs will fall in is that this is an absolute amount I have to spend. It's a million or nothing. And I don't think that that's the case. The more you can test your way into understanding how brand has the impact that it has on your key metrics, the more confidence the CFO and the CMO will have in the sense that it'll drive the metrics that they want. And so, yeah, I think testing is really, really important, knowing what those metrics are. And yeah, you can simulate higher spend without actually spending the million, or however much.
Mandy Hornaday: Yeah. Gosh, I wish I had this report handy so I could actually quote you the numbers, because I just was reading this report about a week ago, and it was talking about, it's not brand or demand. It's actually brand times demand, and brand allows for this multiplier effect. They've done a lot of research on it, where your demand programs actually work like 80% better when you're investing in brand and demand. And then when you take away brand, demand underperforms by like 40%. And I may be misquoting. I think those are the general numbers. But I think that's fascinating to think about from a marketing perspective, because marketing right now is in this crisis, where I see it every day, where marketing is getting marginalized to being a lead gen function. And we're losing, because I think it's out of CEOs and CFOs not having clarity around the value that marketing is driving, and lead generation is easy to see the input and the output. You know, it's very direct, it's very correlated. And so they just want more of that. We want more of that predictability and certainty. But in doing so, I think we're losing a lot of what the essence of marketing is. And because we as marketing leaders and CMOs aren't doing a great job of communicating the value. But it'd be interesting, I'd be curious to hear, if seeing a report like that, or a study that had been done in your specific industry with brand times demand, would that resonate with a CFO? Or are you like, nah, still show me the testing, still show me the piloting iteration, I'll see it when I see it?
Darko Socanski: Yeah. Well, yeah, you'll always win points if you bring facts to a CFO, and they tend to like numbers, because they can easily get entered into a model. And so we like numbers. I 100% believe it. I am a supporter in that brand does drive a lot of ancillary benefits, whether it's on acquisition or, you know, we haven't talked about talent acquisition. When we talk about brand investment, it's not just for generating revenue. It's also to make sure we have the best talent around us. It's to make sure investors hear the company name. It's really creating a buzz around the company, and that has so much, so much value. And, you know, I'll even go all the way to sort of going through an IPO. One of the biggest benefits of that is you get this public market recognition that you have graduated to a public scale. And it's in many ways tremendously beneficial for go-to-market and sales. Sure, it provides liquidity, and maybe the company has raised additional funding for their next objectives, but it becomes in many ways a branding exercise, really, that helps drive revenue and sales. And so I 100% support it and agree with it. You did also say, when you take brand away, demand drops. And great, let's do that type of testing, so that we know what the actual correlation is, and how elastic or inelastic that is. Because can you deploy a hundred million in brand, or can you only deploy 10? So yeah, I believe it, of course, and I'm a big supporter of it. It's just, CFOs really need to understand what those relationships are. And I would say in general, they are supportive, because they're ultimately trying to continue to drive value for their shareholders, and anything that will help us along that journey should get prioritized. So yeah.
Mandy Hornaday: Yeah. No, I think that's a great, I think it's a great takeaway that we could be doing a better job of understanding the relationships. Because I think intuitively as marketing leaders, we know the value from my gut instinct, but to actually put it on paper and put some numbers behind it, I think a lot of marketing leaders don't do well at the moment. But speaking of the marketing and CFO, I'd love to hear what a good CFO-CMO relationship looks like to you. What's really, how have you seen this relationship really flourish? What does it look like?
Darko Socanski: Yeah. Yeah. I've had a pleasure working with a handful of great, great CMOs, and others I wish, you know, we would have had a different relationship. But focusing on the great relationships I've had in the past, I think the sort of common traits they have are, one, they're strong relationships. They're strong personal relationships, because you need to be able to have hard conversations, where like, let's close the door, or let's hop on a Zoom, let's go grab a beer, any of the sort of personalized meeting settings that you want. But maybe you need to have a really hard conversation, like, let's talk about brand. I'm not sure this is really helpful. You need to have strong personal relationships. And that starts with trust, and it starts with alignment around, what are we both trying to do for the company? And in this case, the CMO is equal to the CFO, in that they're both executives at the company. Their job is to create shareholder value. And so we're both moving in the same direction. And so alignment and trust are the most important characteristics of that relationship. And so, yeah, I think that's really key. And then going just down to a tactical level, you know, being able to question each other, and is this the best allocation of resources? And really, the best CMOs will take themselves and the budget out of the equation. It's like, it doesn't matter. I can spend 10,000, a hundred thousand, a hundred million. It's not about the dollars that I get allocated to my budget. It's about how we allocate and what will be the best return for the company. Where I think more junior CMOs, or CMOs that are not the best partners, I guess, in that sense, are territorial around their budget. Like, why do I have less budget? I need more budget. And there's this whole budget acquisition exercise. And if you're in that territory, you've completely missed the mark, and that is not the essence of our roles. And so yeah, with the best CMOs, the best relationships, you can see that there's no personal attachment to the resources. They know that if we work together, I can get more money and deploy more money. And the reason why the CMO is excited is like, I get to do more cool stuff with my marketing dollars. And the CFO is like, awesome, we get to grow so, so fast. And you get really pumped as a team. So I think those are some of the characteristics, I think, of a great relationship.
Mandy Hornaday: Yeah, totally. Even just with the sort of insular thinking of, why is my budget changing, you know, that defensiveness. One of the other things I know we were talking about last week that I thought was incredibly interesting too, is you could even apply that to marketing goals, if you will, and lead generation. And I think we were talking about where you were like, hey, it's great that you want to drive a thousand leads, but do we even need a thousand leads right now? Right? Is that right for the business? Talk to me a little bit about that. Share more about that conversation, because I thought that was a great point of view that a lot of marketing leaders are missing right now.
Darko Socanski: Yeah. Listeners and you might get a little tired of me bringing it back to the point of value, but again, the point is to create value. And so if you start from the point of, how do we create the most value for the company, then it's not about leads. It's about the combined machine. How do we generate the most, in this case, let's say revenue? And so maybe you need a really low CPL. Maybe you need a high number of leads. But really, is it really about leads? It's about converting leads. And then is it about converting leads? Well, it's about converting leads that retain. Well, is it about that, or is it, they convert, they retain, and they expand, and then they send a referral. And so really, really starting with the point of, our job is not to drive demand for the sales partner and the CRO. Our job is to just increase the value of the company. And generally, that's through revenue, improving market demand. And so, yeah, I think it's really important to start with, how do we create value, and then together figure out where within the marketing function can you get the best return on your time. Because you, as a CMO, you want to add value. You want to move the needle and help the company achieve its objectives. But maybe that's not number of leads, and maybe it's not the lowest CPL. It might not even be the lowest CAC, because it really then depends on, do these customers retain or not. And so really having a holistic perspective to, where do we get the most value, identifying that in a strong partnership, and then deploying the resources that go and achieve that.
Mandy Hornaday: Well, if this doesn't encourage people to have a stronger relationship with their CFO, I don't know what will. Because I do think we are being subordinated under sales, and the CRO is dictating a lot of what marketing is doing right now. And so I think that's a great, we should be, I think partnering with the CFO can really help us lift up. And yeah, go for it.
Darko Socanski: Let's go. Well, I'll say one more thing on that. It's as much the responsibility of the CFO as it is the CMO. And I think the way the stereotypical relationship has come to be what it is, a CFO will come top down: here are the lead goals that we need to hit. Why? Because I know on average these number of leads produce those number of sales, those number of sales generate that revenue. And so, Mandy, go and get me a thousand leads. And I think that's a wrong move from the part of the CFO, because it's important to bring the team along for the journey to understand why the numbers are what they are. Because I think the worst place to be in is, these are finance goals. They're not marketing goals. I didn't come up with these goals. And so how am I supposed to deliver a thousand leads, if that's the number? Yeah, I think it's a great call out for CMOs, like, go and hang out with your CFO and talk to them about numbers. But also a call out to CFOs to do the same, because they're equally as responsible for that relationship and getting to a productive output.
Mandy Hornaday: Yeah, no, totally. And I think that was one of the things that, when I think about us having such a great relationship, was one of the pieces I so appreciated. Of course, finance, you know, is going to do a tops down plan. And then it was really helpful from a marketing perspective and a growth perspective for us to do a bottoms up plan and figure out, how do we meet in the middle on this? And so many marketing leaders are not doing the bottoms up plan. I see that they've got this really large target, and they have no idea how they're going to hit it, or if it's even realistic to hit within their budget. Or even, one of the things that I learned really well from you was thinking about sales capacity. So like, okay, great, we can drive all of these leads from a marketing perspective, but do we even have the sales team in place, from a capacity perspective, to handle all of those leads? Or are we just going to be spending a bunch of money that doesn't go anywhere, because we don't have the sales team in place to take advantage of all of that work that's being done? And really thinking of sort of the through line from a go-to-market perspective. That's something I don't think we are doing. We just sort of have these MQL goals, and we don't know how we're going to hit them. We know we've got to do a bunch of shit to get there, and we hope that sales will use them when they have them, but yeah.
Darko Socanski: Yeah, I'll maybe pull the curtain back a little bit on the top down numbers. The reason why those even get produced is, before you can have sort of a productive conversation with your CMO on the bottoms up, you kind of need to know what the top down number is. The CFO is always responsible for knowing the trajectory of the company. And so they are continuously working and deepening their understanding of what the trajectory is, what the top line numbers have to be, and if we hit or miss or beat those numbers, what the impact is for the rest of the year, or my time that I have. And so those are really important, because it's like a dotted line. This is dot, dot, dot, where we're roughly going. But that bottoms up is really where the value I think does get created in the relationship, in that you get to work through the bottoms up plan and really pressure test what those assumptions are saying and what the top down model is implying. Because you're right, and in our scenario, we don't have enough sales reps. Oh, well, we need to hire them. Well, how long does it take to hire them? Oh, well, it takes like two or three months. Okay, well, how long does it take to ramp? Oh, well, it takes another two or three months. Okay, so you're telling me we need about five to six months to have a fully ramped sales rep. Yeah. Okay. Great. Good thing to know today, so that we can adjust our marketing dollars today until we have the capacity to grow into. And again, I put similar, equal responsibility on the CMO and CFO to come up with the bottoms up plan and talk through it together. That's really, really key. And one more thing on that point is, all plans are wrong. Even the most detailed sort of bottoms up plans are wrong. They're not meant to be as much of a prediction as they are meant to be a tool and guide for how you operate the business. It's really...
Mandy Hornaday: Yeah, no, that's great. Please.
Darko Socanski: Its value comes in operating the business, because month in, month out, either we're hitting the CPLs, either we're hitting the leads that we want or we're not, or the assumptions were right or wrong. And remember when we were working, like, we had a handful of assumptions, like, huh, these assumptions are not what we thought they were. Good to know sooner. Is it something that we can act on now, or are we better served acting on something else? And so, you know, the top down gives you the dotted line. The bottoms up gives you the underlying assumptions you have to have in order to deliver the plan. But month in, month out is where the magic happens, because then you can course correct on a daily, weekly, monthly basis.
Mandy Hornaday: Yeah, I had this, I don't think I had a chance to tell you, but I was interviewing for a CMO role a couple of months ago, and I interviewed with the CFO, and it was the most nightmare interview I've ever had. It was probably the least strategic CFO I've ever met. But one of the things he said to me in the interview was, don't come crying to me if you don't hit your lead goal at the end of the quarter. Like, that's your fault, that's on you. And I just remember thinking, my God, what if our assumptions are off? What if there's external market conditions that are impacting the performance and some of the predictability we thought we had? And we're not going to have an open conversation about that? It's just wild.
Darko Socanski: Yeah, you've just highlighted a really important piece here, is that, you know, it's a two way street. And hopefully you're in a place where the CFO is seeking a partner, and both a thought partner and somebody that can foreshadow and identify risks that can get baked into the model and then projected out. But sometimes you don't have that. And so it's important to, you either have faith that that relationship can get there, and you can start having productive conversations, or in this case, maybe you know to run away from that company as fast as possible. And so hopefully that's what you did.
Mandy Hornaday: Yes, it is what I did. That was one of probably seven red flags during that interview. So yeah, I'll have to share them with you at some point so you can get a kick out of it.
Darko Socanski: Entertaining.
Mandy Hornaday: Well, hey, Darko, as we wrap up here, I'd love to hear, for marketing leaders who maybe aren't financially savvy, but should be, as we move into a much more data-driven, ROI-driven world, especially with the marketing pressure that's coming down, what would be some financial skills or recommendations you have that a CMO should develop? What should just be a part of all of our skill sets?
Darko Socanski: Ooh, that's also loaded. Well, I think CMOs would benefit from really leaning in to understand, you know, not just from marketing, but across the entire sort of customer journey, where does value get created for the customer? And really understanding the business. What are the levers of the business that make it tick and grow? And so I don't know that it's any one metric, and I wouldn't feel comfortable mentioning any one metric or financial, you know, return on ad spend or whatever. I don't think any one of those are as important as really understanding the fundamentals of how the business works, because then you will be in a much better place to both partner with the rest of your executive team and work with your CFO to unlock that value. So I would say that's one. And then two, in the rise of AI, I strongly recommend, like, spend some quality time with your AI and, you know, ask it questions you may not feel comfortable asking your CFO. And, you know, another ask is, have it ask you questions, if you really want to broaden your skills. But it all really starts with being curious about how the company works, how you create value, and then being equipped with just the basic knowledge to be able to communicate with your CFO better, because most CFOs are really numbers driven, output driven. And if you speak their language, it can just help that relationship. I think the best CFOs do that in equal measure to partner with their CMOs in order to make the relationship work. And so, yeah, you try and meet as far as you can.
Mandy Hornaday: I love the AI example. I hadn't thought about, I mean, I use AI all the time, but I hadn't thought about it in that sense. Because as you were talking, like, really understand the business metrics, I was thinking, for people who are in this level of role who don't feel like they understand, they're probably going to be too embarrassed to go talk to their partners about it. But what a great point. AI will have the answers for you if you tell it what kind of business you run and how you make money. I'm sure they'll have a starting place. Just while we're on the topic of AI, and then we'll wrap up here, I would love to understand, how are you getting involved with AI and the value it could be bringing inside an organization? Should we as CMOs, or as the C-suite, be thinking, or be expecting our CFO to come to us and say, hey, where could we be leveraging AI for cost savings and efficiency? Do you foresee that being a conversation that's going to happen between the CMO and the CFO? I just am so curious, because AI obviously can do so much, and if leaders aren't being forward thinking about it, I just wonder at what point the pressure is going to come to be forced to think about it.
Darko Socanski: Yeah, I mean, I think it can come from either direction, the marketing or the finance side. There's some active conversations I'm having across the portfolio companies I'm working with, where, how do we leverage AI to speed up our time to dial, and how do we reach more of the opportunities in a shorter period of time? How do we QA our folks at scale? A lot of times, we have really legacy, dated pipeline stages of the funnel. It's in contracting, and now it's negotiating. And so you have all these funnels, but what happened on the last call? How many times did we bring up the upsell, if we're talking about a renewal? Yeah, and so I think really leaning into what AI can unlock is important. I think that any org will really just benefit from that. And I would really just leave everybody with the, I think, fact that most organizations are sitting on a lot of incredibly valuable information for them, whether they're call transcripts or customer chats or customer emails. There's a lot of really valuable content, I think, that most organizations are sitting on that, you know, with some mild manipulation and access, can really unlock a lot of value and insights for teams. So yeah, 100% push finance and marketing partners to explore AI. I'm a big supporter.
Mandy Hornaday: Yeah. Yeah. There's so much, so many fun things happening with even just better understanding your ICP based on all of this data that we, you know, so often don't have time to do, or better understanding your buying personas and what they care about. The call transcripts are gold, for sure. And then all the customer data too. Well, Darko, thank you so much for the conversation today. I have so enjoyed this, as always, and continue to just learn so much from you.
Darko Socanski: That's so good. So good. Yeah, for sure. Awesome. Thank you for having me. I've had a blast. This is really, really nice. Have a good one.
Mandy Hornaday: Absolutely. Where can people find you if they're interested in maybe your services? I know you do some executive coaching and advisory. If people want to learn more, where should they reach out?
Darko Socanski: Sure. Yeah, thank you. I appreciate that. Stratton Growth Advisors, it's a boutique firm. We really focus on three things. We do M&A advisory work. A lot of the work I have done really ultimately leads to an exit, in a period of time where founders have little experience in, but it's high stakes. We'll do CFO services, and then some executive coaching, if you're just learning how to work with your finance professional to begin with. So those are sort of the three areas I work in. And as far as contact, reach me on LinkedIn. It's just Darko Socanski, and I'll pop up. It's a unique enough name. I don't need to worry about competition.
Mandy Hornaday: Awesome. Yeah. Well, you might have to do some CMO coaching on how to work better with CFOs.
Darko Socanski: I would actually really enjoy that. When you bring your next CMO to your show, maybe we can both sit in and just have an open conversation. That'll be great. Let's have a debate.
Mandy Hornaday: Totally. Love it. All right. Thanks, Darko.
Darko Socanski: Yeah, thank you. See you.
