“The only unforgivable sin in business is to run out of cash” [so said Harold Geneen], yet startup CEOs “always act on leading indicators of good news, and lagging indicators of bad news” [according to Andy Grove]; after all, it requires a certain stubborn, headstrong optimism to start a company. So how to reconcile these views? At the very least, pay more attention to leading indicators of running out of cash, “because there’s just no going back”!
But doing all this — while also trying to balance growth, advance planning vs. constantly changing strategy, revenue vs. margin, coordination/communication/culture, and so on — is a lot harder than it seems on a finance spreadsheet. It requires understanding that the “math is not the terrain, the spreadsheet is not the business”… yet also knowing when to trade rose-colored glasses for darker rainy-day ones.
And that’s where a CEO partnering productively with a CFO comes in. In this episode of the a16z Podcast — moderated by (and based on an internal event for CEOs+CFOs hosted by) Caroline Moon, who leads the financial operations for startups practice on a16z’s corp dev team — Ben Horowitz and Scott Kupor share their personal insights as well as advice for founders: How DO you do it all?