Better Financial Forecasting with Brandon Metcalf from Place Technology

Brandon Metcalf 0:00
A lot of the competitors we compete with will pull over summary level at the GL level, like here’s the total on the GL. I wanted to be actually able to drill down and see all the transactions that are making up that number because it used to drive me crazy in Excel. When I’d meet with our controller, and there’d be this number though, what makes up that number?

Alexander Ferguson 0:22
Welcome to UpTech Report. This is our applied tech series UpTech Report is sponsored by TeraLeap. Learn how to leverage the power of video at teraleap.io. Today, I’m joined by my guest, Brandon Metcalf, who is based in Austin, Texas. He’s the CEO and founder at Place Technology. Welcome, Brandon. Good. Have you on. Thank you. Thanks for having me. Now, please, technology is a financial platform for technology and service companies. I want to help understand, though, you didn’t actually start in in financial service. Well, you actually started back in a bank, but then went to recruiting. And then this is your second company that you started. The first company that you started was a SaaS company focused on recruiting. Is that correct?

Brandon Metcalf 1:05
Yeah, it was a company called talent river, it was a operating system for staffing or recruiting firms.

Alexander Ferguson 1:11
A talent platform. So you really like the idea of the platforms? It sounds like it’s it’s a kind of like, how can we build something that other people can do great things off of? Is that right?

Brandon Metcalf 1:20
Or it’s more along the lines of I am not a fan of disjointed processes, because I think a business has a flow to it. And I think, you know, either cobbling together a lot of different solutions, or just leaving things not connected, is an archaic way to run a business. And I think technology’s role should be able to make that more efficient. I think, when you have things that are disconnected, your team ends up spending more of their time moving data, copying data from one system to the next. And that leads to not only just a lot of busy work, but it leads to a lot of errors for something that being moved correctly. And then it also leads to even more time spent on verifying that you didn’t move something incorrectly. So let’s just error prone leads to a lot of waste of time. And I think you can unify, unify that, which was the concept that we had a talent over for staffing and recruiting is to connect their entire process from the initial sales conversation all the way through, you know, collecting cash for, for the client from the client, and then vice versa is what we’re doing with place for finance, as trying to connect the entire business operation from a financial perspective.

Alexander Ferguson 2:33
Now, you you actually sold bullhorn in in 20, sorry, talent rover to bullhorn in 2018. Of those want to hear more about the journey that of that whole experience and lessons learned stick around for part two, but it was already at talent rover, if I understood correctly, that you started to experience that some of the challenges the issues talking about process, right? How could technology solve that that led to place technology? What What were you really feeling and experiencing as the leader at talent rover that started this?

Brandon Metcalf 3:06
Yeah, I mean, talent rover was what you want to talk about a crash course MBA of how to build a business how to build a global software company and in a very rapid fashion. That was my talent rover world where, you know, I started building that product in 2009. Never coming from a software background or working or even working at a software company. It’s just, you know, being in staffing for a while I really understood the process that the business had and was frustrated. Like I my my staffing career started with Kelly services, which is a multi billion dollar organization, great company to work for, I learned a tremendous amount of knowledge from it. They had a lot of different systems that were disconnected. And then I got recruited from Kelly to a company called CB partners, which was a executive recruiting firm in San Francisco, focused more on like senior level finance people in the San Francisco Bay Area. So you know, talking to CFOs and VPS of finance at the biggest tech companies in the world, or, or who are now the biggest tech companies in the world, because back then there were a lot smaller. And also it was a similar challenge that everything was just disconnected. We spent so much time trying to find information and move information along that it was just inefficient you you were distracted from what the business should be doing. So I wanted to solve that with with building talent rover. So I started building that software in 2009. came up with, you know, six core functions that it really did, developed what I could develop, and then hired professional developers to actually do the real work. And in 2011, you know, we decided to commercialize that product, we were able to use it at CB partners for a good six to nine months to give it a real good beta test before we went to market with it. Then 2011 I think it was November of 2011. We went to market. I got our first customer in January 2012. And for the first couple of years, we’re just trying to figure out what what we needed to do to run a software company and how we scale the software company and You know, it started to click after a couple years, and then all of a sudden, it really picked up momentum, I gave a speech in Hong Kong and was fortunate enough to meet the regional Chief Marketing Officer at the Adecco group, which is the largest staffing firm in the world. And that set us off on a path of eventually winning the global deal with with a deco. And through all that there’s a lot that happened with business. So like, like you mentioned, we sold that company in March of 2018, to our biggest competitor. So if you think about the timing, we went to market and vember ish of 2011, we agreed on the deal in December of 2017. So you’re talking about what, five, six years to go from this crazy idea that I had that, you know, we could we could do this better internally, for us to now all of a sudden, we have customers in 40 countries offices in eight countries, nine offices, you know, over 100 employees, and the biggest companies that we sell to like a deco is a 24 $26 billion company was using the software. So it was really exciting. It was really terrifying. But it worked. Blood, sweat and tears, I spent most of my time on a plane, flying literally around the world, every single month, once a month, it was a around the world trip basically visiting all the offices. And, you know, at the same time, we had to figure out how to really not only run the company, but fund the company. So we ended up raising about $28 million for for talent rover. But it was a very non traditional funding experience, as I’ve learned since selling the business where you know, 25 of that 28 came from angel investors,

and then deco invested in us as well, when when we won the global deal. Now, raising that kind of money from anyone, especially angel investors, you’ve got to really do two things pretty well, you’ve got to execute. And by all means we had some brutal quarters, especially in the beginning. Luckily, as we grew, we got better. And we had some really good quarters. And numbers were growing. And, you know, 2017 magazine, right ranked us as the ninth fastest growing software company in America, which was exciting. And we’ve grown about 3,000%, year over year. So we started to figure it out, we’re doing well. But the other side of that is, you know, investors want to know that you have your your arms around the financials of the business, and really trying to run a business, if you don’t understand your finances, it puts you in a terrible position. So developed all these models for us to forecast the business and really track how we were doing. And we got really good at forecasting not only you know, things like the profit and loss, but we got really good at forecast forecasting. And I can forecast out cash 612 24 months in the future with a variety of different scenarios, and get really close if not on the number as to what we needed. So, you know, with this funding, we had what was considered an always open round, where we didn’t go out and raise like a huge amount of money at once and then burn through the money and raise the next, it was going to the investors and saying, Hey, this is what the next three to six months looks like, here’s the different scenarios, like let’s fund it, and then get to the next point, which is both great that we had investors that believed in what we were doing. But it was also a big, big challenge. You know, my co founder, especially he had most of the relationships with these angel investors. So it was always stressful. And, you know, we were quite the little duo of, of how we worked off each other. But we needed to have these forecasts in order to in order to really give some confidence and then be able to run the business. So if you think back to what I was saying about flying around the world, half half the month, I would still spend 20 to 30 hours a month locked in my home office, when I was home, or in a hotel room somewhere around the world working on these models. But that didn’t include what our accounting and finance team was doing. And they were spending, you know, at least 100 hours a month. also working on these models. And the challenge with some of these models is it’s great. I have my big new one. That’s great. It has all the numbers, I’m super excited about it. Then I connect with finance and they have theirs and they don’t match. And you’re like, Okay, well what did you do to yours? And what did you do yours? And it’s like, Okay, how do I remember all the changes I’ve made? And what’s the right forecast? And then heavens forbid, we don’t catch all the mistakes from entering the data into the forecast. And now all of a sudden, you know, not now but two, three months from now we see this big error in the forecast. Our forecast was wrong. We’ve been forecasting incorrectly and how badly does that impact the business and now there’s a lot of lessons learned which I know we’re going to talk about from all of that. But when when we were looking to be acquired, you know, we also leverage these forecasts to come With what the real value that we felt the company was worth. And that’s how we were able to negotiate the deal that we got

Alexander Ferguson 10:06
the the models, obviously to be able to show what you’re worth, yeah.

Brandon Metcalf 10:10
Not to show them to show us. Because they had their own models, like we would give them our forecast. And then they would do their thing. And they were brilliant at what they’re doing. And you know, bullhorn definitely knows how to acquire companies. And, you know, I was really happy, we rolled a bunch of stock into bullhorn, and then they did well again, and they’re gonna do well, even more of our level team is, is really doing something special for the staffing industry. But for us, these models were teaching us and telling us, this is what we should actually sell for. And, you know, where should this go? So when we sold the business, I negotiated out that I could leave whenever I wanted. Just because I, you know, we had different styles when we sold to customers. And also, it’s kind of hard once you build your own company to go work for someone else, and he will do their do their dream. So I laughed, and shortly after I laughed, I was like, 39, at the time, I was like, Okay, what am I going to do now. So I started doing consulting, and started consulting for technology and services companies. And it really became apparent, the biggest help that I could give them was to give them these financial models, and then teach them how to operationalize them like I did. And through that, I started implementing these massive Excel spreadsheets. And this was just painful. So I thought that there could be a software out there now, early days at talent river like to your to your three, we looked for software that did this, we actually bought the leader in the category at the time, and after nine months of trying to get the thing implemented, we scrapped it went back to our spreadsheets, because it was a great software for enterprise. But it wasn’t a great software for SMB mid market, we were growing too fast, and it was too complicated for it to really work. So when I was looking at software that we could implement, I looked around, couldn’t find anything that I thought was exciting, or that really solved the need. So I started to conceptualize, okay, what we’re what what would I want the software to do. And it really came up with what places today we placed, we do three things. We do what everyone thinks we do, which is the outputs. So you know, we were always talking about ourself as a financial forecasting solution. And by all means, we do financial forecasting, so variance analysis, p&l, cash, all of that, dashboards, reports, bread and butter, exactly what we do. So that’s one piece. But in order to get that piece, you got to have data. And, you know, that data aggregation piece, if you talk to most finance leaders, is where their team spends all of their time, like a lot of the CFOs I talked with, and luckily for my recruiting days of recruiting, CFOs and VPS of finance, I have a lot of those great connections. You know, they came and said, 6070, sometimes 80% of your month, is just moving data from one system to the next 111 person called it the blasted a copy paste process that they hate, because you’re just moving data everywhere, and then you’re verifying, re verifying, then you’re inserting into a spreadsheet, and you’re making sure the spreadsheet didn’t break and all of that stuff. So we wanted to solve that problem. But we wanted to solve it in an intelligent way where we wanted to actually make it a useful workflow going from, you know, getting the initial sales conversation, having that go into forecast and booked the deal. And once the deal is booked, move that into the billing engine, knowing how to do revenue recognition, so it knows how to play against the p&l and cash and then pushing that into the accounting system. And then also, we wanted to pull the data back from the accounting system so that you get your actual so you can do some variance analysis. So that’s a fundamental piece, that’s, that’s the second thing we do. And then

Alexander Ferguson 13:44
is the integration of the data not being able to get all of that without having to copy pasting.

Brandon Metcalf 13:50
Yeah, and a workflow process around it have an intelligent way to use the software so that people can just do their jobs and not worry about these extra steps and moving the data through. So you know, like, create a new sales opportunity in Salesforce, and that knows how to flow through the rest of the process so that they just do their job, and the system helps them and it makes it more efficient. And then the last thing is, it’s always been a mystery, right? My career, like you, you alluded to earlier, I started off in financial services, I started with Bank of America, back then it was nation’s bank and bank eventually became Bank of America. And, you know, looking at managing p&l and all of that at the bank, and then, you know, moving into staffing and same thing, managing locations and regions and all of that and, you know, always wondering what my finance numbers were, but having to wait for six, sometimes eight weeks post month for finance to be able to get me the information they need. Not because they were slow. They were just super busy crunching all these numbers gathering all this data to try to get me the information I needed as fast as I could. It just takes a long time. So like Why does that have to be like in today’s world where technology, there’s so much data on demand? Like, why can’t that be faster? And then I started thinking through, you know, after running companies after running talent rover, and really understanding the finance process and what we did in accounting, I understood that the data that finance teams getting from the business, they have to be able to really trust and understand, like, how often does head of sales, turn into their sales forecast to finance and say, here’s the number. And the finance manager will go, is this really the number? Because they’re kind of a, they’re, they’re both trying to do the right things, but they have a different perspective. Like, if the head of sales goes to the CEO and says, We’re only gonna hit 20%, of quota today or this quarter, that’s not going to be a good conversation. If the finance person goes and says, we’re going to hit 100%, of quota and puts that in the forecast, and they don’t, that’s not a good conversation. So what number do you go with? And you’ve got to have that trust and understanding of the data between the business and finance. And that’s just one example. So I wanted to solve that, how can you bring those two together, in a build the trust to give them visibility, give them the ability to collaborate in real time with real live data, so that both sides can make the best decisions as fast as possible, on what to do and how to lead. And that was the third prong of what we decided to build with place. So 2018 and August of 2018, we decided to launch the company. End of 2018, we started building products, January 2020, we started selling the products, which is a an amazing time, I must say it’s a company, a brand new software company, and things very differently in a very historic type of function in a business, right before a global pandemic.

Alexander Ferguson 16:52
Now has that as you think, well, it’s hard to hard to know, because it’s like, you don’t have an AV test here. But do you think is made it made it easier or harder to be able to sell this type of financial services? Does it really matter? You know,

Brandon Metcalf 17:05
I mean, we don’t know, we will never know. But we were fortunate enough, though, that the type of product that we offer really helps companies. So we focused a lot, especially, you know, March April of last year of saying, hey, we’ll give you our product for free. We just want to help you plan and understand what options you have. I put out demo videos of like me using it internally of saying, Okay, this is this is how I’m planning because, you know, historically companies don’t finance off of or don’t forecast off of zero sales. And that’s not normal. But now in COVID Okay, let’s you got a forecast off zero sales and how’s the business going to survive? How are you going to manage cash efficiently enough to give you enough runway to get through this now running high growth software companies I’m used to looking at cash burn and have burning more cash than than revenue. That’s part of the the first few years of building the business. So it’s, it’s a little bit normal for me, but traditionally, that’s that’s just not normal. It’s not how you look at business. But it was good. I mean, we had a great year last year, it was exciting. We’re really excited about this year, it gave us an opportunity to to really hone in on go to market and who we sell to why we sell to positioning and messaging and all that so we’re excited about this year,

Alexander Ferguson 18:15
the the key person that you guys are focused on selling to Is it the financial the silent to the CFO? Or is it the CEO and or you because you mentioned several people that are able to use this and and work together. But who’s the one that usually is like, I want it?

Brandon Metcalf 18:34
Yeah, this took us a long time to figure out now we look back at it and go get this is a no brainer. What were we thinking? We didn’t know that last year. And that was part of you know, early stage go to market and figuring out who your buyer is. And also figuring out the types of companies you sell to the sizes and the industries and all of that we spent all last year nailing that down. And we break it down to you have the economic buyer, or the person that’s going to be using it every day. And then you have a beneficiary buyer, the person that uses it every day or actually uses the tool that’s finance and accounting. This is designed for that. The beneficiary buyers though, is the rest of the company. So CEO, like I can literally pop up on my iPhone, and I can see our financials on demand both historic and forecasted. So if I’m ever sitting in front of an investor, which I just raise the funding round, it’s I can go to lunch and say, Okay, what do you want to know it’s here on my iPhone, real time not not old, like as accounting books, transactions and stuff like that it’s there. If I’m the head of sales, I can see where we’re at for quota. I can also see how my team’s doing with like their commissions and all of that example, I love to give as if I’m a marketing manager. Like our product is built on Salesforce. So when you think of Salesforce, you typically think of the CRM functionality, marketing and all that Salesforce though, if you look at really what they’re doing, especially with their acquisition of slack, and the latest announcement from Benioff that you know they’re re engineering their whole product line So that it’s a slack first company. They’re an operating system. They’re not just a CRM, they are a full fledged operating system for the business, which is one of the reasons why we wanted to build our product on platform on that platform. But if you look at the marketing department, they’re used to seeing leads and conversions of leads, they have lead sources. Well, that’s all great. But then we put on there Well, what’s the economic value for those leads? How much cash did you actually get? How much cash did you spend? What’s your marketing budget? What’s your vendor, but like, you get the full picture of what really is going on in the department and then in the company, in real time without having to wait?

Alexander Ferguson 20:40
What would you say when you look ahead and paint a picture of the future when it comes to being able to have finance in real time and be able to use this insight and, and forecasting, whether it’s on your own roadmap, or just kind of in general, where you can make a prediction? What would you say?

Brandon Metcalf 20:58
You know, I mean, we’re first looking at solving more of the workflow, similar to what I did with talent rover, right? Giving you a functional workflow to go all the way through a to z, the whole process, and then giving you the outputs for that the reports, the dashboards, the forecasts, the variance analysis, all those things that you need. We are also looking at, to your point, where does it go next? If you think about what our what our product does, so we not only have all the information that we’re forecasting, we not only have all the information that’s inside of Salesforce from the business using Salesforce. But the way our product is designed is we do a bi directional integration with the accounting systems, the eirp systems and for us, the udrp system is the historic finance record, like that’s, it’s designed to do, what’s the it’s always done. But we decided to do something very different from any of the competitors in the space, we decided we integrate with an accounting system, we’re actually going to pull in your chart of accounts. And we’re going to pull over all the transactions. A lot of the competitors we compete with will pull over summary level, at the GL level, like here’s the total in the GL. I wanted to be actually able to drill down and see all the transactions that are making up that number because it used to drive me crazy in Excel. When when I’d meet with our controller, and there’d be this number and I go, what makes up that number. Yeah, how do we get to that? Yeah, it’d be this whole process of Well, let me go run all these different reports and all this and then all of a sudden, we’re wasting time in the meeting when we could have made a decision much faster. So we pull in all the transactions, which also means we can get much more granular with the accuracy of what we’re reporting off of. And then we do the same thing on the forecasting side, we create that level of granularity.

Alexander Ferguson 22:38
So if you feel like I’ll give some trust, blindly trust the numbers,

Brandon Metcalf 22:44
a lot of trust in the numbers and also a lot of trust with where the data is kept, which is another reason why we built on Salesforce because it’s like, the most trusted platform out there. But if you think about bigger picture where that takes us, though, to your point about machine learning, or AI or recommendations are predictions, like we now have data patterns, and a lot of data patterns, not just the data patterns that are in Salesforce, we have data patterns of what’s in accounting. So it’s on our roadmap that we will get to like the next evolution for us is a recommendation engine of being able to recommend things that we think you’re going to happen so you can make decisions. We’ll see if we ever get to the point where the software makes those decisions for you. That makes me nervous still at this stage, because it’s too young for us to actually understand it. But definitely to the point of hey, here’s a trend that we see that we think you should pay attention to, or Hey, this customer always pays you wait. You may want to adjust your your past dates for when you think this customer is going to pay you so your variances improved on your cash forecasts. It’s

Alexander Ferguson 23:48
an important piece that you realize that is needed. And being able to have accurate data coming in the right place, being able to have that glue among the team that everyone can have access to it. Thank you for giving us a breakdown around place technology for those that want to learn more you can go to Placetechnology.com you’ll be able to request a demo there. And for those who want to hear more though, about Brendan’s journey and the insights and lessons learned over the many years from from a quick years actually to start and end so stick around for part two of our discussion. Thanks, Brendon. And we’ll see you guys on the next episode of UpTech Report. Have you seen a company using AI machine learning or other technology to transform the way we live work and do business? Go to UpTech report.com and let us know