- Duration: 45 min
- Platform: zoom
- Source: Read.ai 01JPB1N7WDXNKKAFWYT55ZGNVH (https://app.read.ai/analytics/meetings/01JPB1N7WDXNKKAFWYT55ZGNVH)
Transcript
[Michael Houck]: Kurtis, what’s up, man? [Kurtis Hanni]: Hey, Michael, how are you? I’m good. How are you? What’s going on? Doing good. Just trying to wrap up my week. In a reasonable fashion without losing anything, right? Yeah. I feel you, man. [Michael Houck]: I’m in the same boat. It might be a later night, later evening for me today, but we’ll see. Hopefully not. [UNKNOWN_SPEAKER]: Yeah. [Kurtis Hanni]: We have two little kids and my wife is doing a deal tonight. So I got to get wrapped up and then get them to bed by myself. And then that’s my, like, that’s that’s my typical, like, get them to bed and then come back and work for a little bit, you know, because it’s always that late night session is always one of the best things. [Michael Houck]: So yeah, 100% either either you’re up before everybody or you’re up after everybody. That’s the that’s the best time. [UNKNOWN_SPEAKER]: Yeah. [Kurtis Hanni]: But that’s cool. How old are your kids? Three and one. So yes, very young. So. So where are you? I was trying to remember you’re in. I’m not anywhere right now. [Michael Houck]: I was in New York for about four years, but I left in the fall and now I’m just sort of traveling around looking for where that kind of home base is going to be. So I’m in Dallas right now. Oh nice, yeah. But we’ll see. [Kurtis Hanni]: I’m in Oklahoma City, so I’m wondering if you guys it’s as windy there as it is here. Cause it’s freaking ridiculous today. It’s been nuts. [Michael Houck]: I, there’s a dust storm the day I drove in up from Austin and it’s been so windy the whole time. I have cars like shaking on the highway. It’s wild. Yeah, it is. It is. [Kurtis Hanni]: Well, I knew like last time I was like really checked in with you. I knew you were up in New York and then you were, you were doing a bunch of those like events for your newsletter that were, you were in California for a bit. And so I knew you’d kind of popped around. [Michael Houck]: So that’s nice. Yeah. Oklahoma City, by the way, a few people have. It’s basically as I look for where the next place to kind of land is, it’s sort of shown up, I think, higher than I would have thought on a bunch of sort of the things that I’ve been looking at. So yeah. [Kurtis Hanni]: And that I’m sort of missing out on, you know, Oklahoma City is a kind of it’s a it’s a unique place in that, like, so I grew up in Oklahoma City and it was a sleepy town. Like, you know, I I honestly like I wasn’t like actively trying to get to like a big city, but it was like one of those deals where I was looking for opportunities. I was like, I have no reason to stay in Oklahoma city, but in like, really it was like when the Oklahoma city thunder came here and like a little bit before that, there was kind of like a renaissance of like really cool downtown, uh, or not, not necessarily downtown, but this area by downtown, that’s, um, a lot of cool, a lot of cool places to go hang out. Um, and really kind of a renaissance of like downtown and there’s even like a weird startup culture which you wouldn’t expect here like between Oklahoma City and Tulsa like I know a number of like kind of VCs or private equity that’s like kind of based out of this area so it’s like it’s definitely not like at the level of of you know where in Austin is or like whatever else but it’s like it’s it’s got a it’s it’s got its kind of own little own little thing going on. And so we’re I mean, at this point, we’re never moving because our families are here and we’re raising kids here. And we’re, you know, you do have, like, more than you would expect available to you. And one of the things I mean, you kind of get this with Dallas, but is Oklahoma City, you can drive, you can get to a lot of different spots. Like if you look at Oklahoma, there’s all the, like you can go from dune bugging to mountain hiking to like all this other stuff within like an hour and a half period. So it’s like a weird, like, it’s never gonna be a Colorado or it’s never gonna be like one of those really nice, you know, like where you just got all this like out your front door, but it’s got like a weird array of like variety that you can get to. So we like it, but it’s not, you know, know, if you’re used to like a big city, you’re definitely not going to get the big city, but there’s some cool culture here. [Michael Houck]: So no, yeah. I’m looking for something different. I’ve lived in LASF in New York for the past 10 years and yeah. [Kurtis Hanni]: You know, looking to build a family and those aren’t really the places to do that. So yeah, yeah, for sure. Well, anyways, well, let’s not, I mean, I’ll gladly tell you anything you want to know, but I know we, you had a, uh, uh, you’re kind of exploring some stuff in my space now, apparently. So I’m kind of curious what you’re what you got bouncing through that head. [Michael Houck]: So yeah, man, I mean, look, it’s it’s been fun in the past, I’d say year or so. Basically, we’ve had this founder newsletter forever. And it’s like a large number of venture backed founders, a large number of like successful bootstrap founders, and then also a large number of sort of aspirational early stage folks. And we’ve tried to through a membership, through a community, through a media subscription, and like one or two other things. And, you know, they all made money, but none really took off to the degree that I’m like, I want to double down on this. And so what we did last year is we started a ghostwriting agency based on, you know, knowing how to do content. And I partnered with Blake, with Blakey Mall on that. And it’s worked like crazy, like we’re up to, I think by the end of next week, probably we’ll be at 30 clients, one or two more to go. And we have strong growth channels and the newsletters throwing a bunch of people in and it’s just, it’s just been great. So plan is to keep growing that throughout this year and beyond, but the playbook to set up one of these agencies and sell it to these founders seems to be the way to go. It seems to be what they really want from and from us, our brand is services. And so obviously with AI, sort of, it’s getting easier to do just about everything. And so just exploring the idea and, you know, we’ve polled and talked to some of them and sort of general financial services, more specifically a split between, you know, bookkeeping and then like more CFO stuff is interesting to them. And so it’s one of the options we’re considering alongside design performance marketing and one or two others. But yeah, I’m just really looking to sort of understand, like, if we do go the financial services route, what are the sort of, A, the things that I don’t know about, like, how to structure the offer and things like that. If you’re comfortable, Sherry, don’t want to pry. Yeah, no worries. And then also, you know, potentially explore ways to partner up in a way that’s not disruptive to your business, but kind of additive for both of us. [Kurtis Hanni]: Yeah, yeah. So kind of my I’ll just kind of my approach has always been we’re fractional CFO first. And part of the reason I think that is because all of these people that are building off of like bookkeeping or entry level offer type deal is stuff that’s gonna there’s so so much money behind the AI side of that, that I think there’s some really good paths to being able to really automate a lot of that kind of bookkeeping type work in the long run. Now the short run, there’s still going to be pain points and there’s still opportunities there. But my thesis is kind of, and I’m not as much in the startup space, like, you know, so it’s, I think it’s still for the startup space is everyone I talk to, they have a CPA that does their taxes, but when it comes to their like business finances, they just feel completely ignorant. And so what I think, I think the future is in having an expert that you know that you can reach out to and get the help when you need it, but that is not necessarily is not necessarily gonna be AI only. Now, I think there will be AI only stuff out there, but I think the reality is there’s still a lot of trust issues with AI and I think that’s gonna be hard to overcome. So the way I think about and the way we kind of build our offer is you’re gonna have a person But our team is going to be the one that is utilizing that AI. And I can actually connect you with, I have a company that we’ve been talking to. And the way I think that is ultimately going to look is you’re going to have, so the way we built our team is we’ve got me and right now we’ve got three other CFOs So we all act as a CFO within companies in a fractional basis. And then we have a team behind them that is generally overseas team, but really high-level people. Like I hired a girl just in the last two weeks that’s a CPA, has a lot of financial analysis background, has led finance departments in the Philippines, and can basically run for me. So the idea is every request we get, whether that be Slack or email, first goes through an AI tool where the AI tool is taking all of those sort of inputs and spitting those into kind of a digestible summary with all the sources linked that she can then go in in and be able to respond to requests more quickly. It’s taking something that would have taken her hour or multiple hours to do, and it’s not necessarily trying to answer them, but it’s providing that context in a way that she can review that, really jump in it really quickly. You’re taking something before that would have been an involved engagement and being able to deliver that stuff, you know, almost with the like, and I’m thinking, like, we’ve not gotten to this point. But I’m thinking long term, that response time is potentially measured in minutes, but definitely in hours versus now it’s a 48 hour, you know, it’s a 2448 hour, like longer response time. And so I think that’s the long term kind of direction that I think personally, it’s going because I think there’s going to be the people that ultimately trust the AI. But I think most people, and again, I’m in more of a small business space, so it may not be as true in the startup world. But I think most people are going to struggle implicitly trusting that AI output without the expert that has the experience behind it. Now, we know AI is going to be getting insane. And so that may change in the next five years, but if it does, the way we’re delivering, we’re gonna be set up to still deliver in that environment is the hope. So again, I don’t think that’s the future, but that’s kind of the way we’re looking at it. And the way that that helps bring down our cost is obviously we’re touching it less there, but then also the CFO level person or the person that’s like the person you trust is only really involved in calls or kind of like more involved type deals. And that we’re using the combination of the AI and the overseas labor to really bring down the cost of delivery with that initial, you know, kind of those one-off questions that are generally pretty simple to answer. That makes a ton of sense. [Michael Houck]: I totally agree with that kind of thesis. I think it will hold true in the startup space too. Just, you know, I think people will try these like automated AI tools, but at the end of the day, AI still hallucinates. And I don’t think that that’s kind of going away. You need to write some really long prompt. You don’t necessarily know the nuances of how to do that, how to interact with this tool. So I’m with you a hundred percent. Um, I think, um, when you’re saying these sort of these, these other folks, not the CFOs on your team, you said you hired them from, from the Philippines is that something that when you put those people in front of the clients, they have like full confidence in it, because it’s coming from you? And if so, like, what is the payment model for this look like to those people? Is it that they’re getting paid hourly? Are they getting paid per client per month? [Kurtis Hanni]: Like, what’s the what’s the structure there? Yeah, so I’ve, we have some in the Philippines, we have some in South America. So we’ve, we’ve kind of just, I’ve looked that it is the whole world has different talents or has, you know, you can get different things from different areas. And so I’ve just kind of tried to pull, I don’t, I don’t personally pull from South Africa, but I know a bunch of some people that do. And so we’ll probably start testing there too. We put, now we don’t put all of our people on calls, but we put the high level people on the call. And these are people that are like, you know, they’re, they’re presenting in the call to the client a lot of times. So they’re like, they’re, um, we have confidence in them to do that. And we’ve not yet had any pushback with that. Um, now I’m sure there’s some people that would be like, you know, I don’t want this, but I think, I think the number of people that are going to be that way are one, they’re probably not good with an online offer where you’re never being in person. That’s part of it. But then the people that are okay with virtual and not okay with overseas, I think that number is gonna be shrinking really rapidly too. So that’s kind of our approach. We pay currently for our CFOs, like the people here in the US, we pay them a percentage of the engagement. So right now, we’re doing 50% of the engagement. With some engagements we’re doing where they get 60%. And that’s only because in those engagements, it’s the bigger engagements where they’re like 20, 30, $40 million companies. And they're having to do not only like our CFO meetings, but they're also having to meet with staff. And so when you're having to meet with the staff and you're having to coordinate like a weekly multiple times a week meetings, it's like you gotta give them more of the nut because they're gonna have to invest so many more hours. We generally frame our engagements where we're trying to get the CFO probably 200 to $250 an hour. And so when we think in terms of that, like they may not get that in the first three months, but over the course of a year, they’re going to get that. And then hopefully if it’s going on past that, they’re getting substantially north of that. It just kind of depends, obviously, the client and the scope and everything else. For the overseas talent, we’re paying them just a flat rate. But I do want to get to, and I’ve talked actually with some of them and they’re good with it, of doing a reduced flat rate and then paying on a per client basis. It’s a little bit harder since we’re not doing bookkeeping because with bookkeeping, you have a set deliverable and so you can really scope that and you say, we’re going to pay you per, we’re going to pay you per client you have. With fractional CFO, I think it’s a little bit harder, but I think that’s the direction we want to go as well. We just have been, you know, we’re still, I mean, we’re still pretty small in that, you know, we’re not over a million at, I hope that will be over a million this year. And then from there, you know, can grow more quickly. But we’ve really spent the last bit really trying to refine a bunch of our systems and processes to really like, set it up for this. [Michael Houck]: So got it. Okay, I appreciate the the transparency there. That’s that is helpful. When you’re when you’re Because I’ve never hired financial services folks in-house before. At my venture-backed startup, we used an agency. Where are you going to find these people, both the US-based CFOs and also the overseas folks? [Kurtis Hanni]: The US-based CFOs, I’ve had enough outreach. Like I said, we have four people right now they’re doing it including me and I have probably four or five more on the bench that I’ve not gotten clients to yet and it’s just because of you know my voice on Twitter and my newsletter and like whatever that I’ve had people reach out to me so I’ve not had to actively recruit so we’d probably be learning that at the same time because it’s I’m not that is the hardest part honestly is you have to have a level of trust with those people if you’re assigned clients to them. And it’s a little bit different than like anything in design or, you know, like staffing or anything like that. Because when you’re dealing with finances, like there’s a huge level of trust that has to be there. And so that’s, that’s something that I’ve not yet had to figure out. For, for overseas, I’ve used a few different staffing firms in at this point, I’ve not gone direct yet. Just because like, you know, I don’t know if you’ve seen John Matzner on Twitter, Saigon Passport is his company. He is, I mean, I think they’re over 100 employees now and they’re all staffing. And it’s like, I’m not gonna beat his resources that he has, you know, trying to go do this on my own. And I pay him, you know, I pay him a very nice to get those employees. So it’s like, for me, it’s, I’ve, maybe once we get to the point where we’ve got, you know, tens of staff, you know, we’re over like 20, 30, 40 people, and then I may make sense to start hiring myself. But at this point, it’s hard to beat their ability to source those candidates. So. Yeah, no, it makes sense. [Michael Houck]: I think when I hired like VAs, for my company, we just hired a bunch of VAs direct and sort of threw them some tasks and kind of sink or swim. But I think with people’s numbers, probably using some intermediary makes more sense to have some level of trust and vetting on top of that. [Kurtis Hanni]: Yeah. I mean, obviously you can do the vetting and it just kind of depends on, but for me, it was like, you know, I don’t, you know, I already hate spending the time I have to spend in And so having to deal with all those, having to deal with all that stuff coming in, it’s like, it’s probably not best use of my time at this point. So, you know, they, I don’t want to say they, they, they’ve done a good job of getting me really good candidates, but it still takes time. And I think you could definitely move faster on your own, but you know, it’s, that’s some of the trade-offs. [Michael Houck]: And I guess, like, last question on this kind of stuff would be on the client side, I guess. Like, obviously our ICPs are different. You focus more on the kind of small, we focus on the startups. What have you seen, like, really, like, has been like the needle mover in terms of getting clients to stick around versus churn early and maybe expand with you guys? Like, what’s the… Kind of thing there. [Kurtis Hanni]: So because we’re a little bit bigger as far as like the size of business that we’re going with, um, we, I think when you introduce bookkeeping into it, it gets a little bit different. We’ve, we’ve talked about an offer, but honestly we’ve, we’ve strayed away from it for now. Um, the, To me, the biggest needle mover has been like, and this is like a line I like to use in a deal. And I’ve like gotten so many head nods on this. It’s funny. I think it’s kind of cheesy, but it’s like these, they eat it up. It’s like, listen, anyone can build you a financial model. Anyone can do all this work. You’re coming to us because you trust, like, cause you want someone you can trust. And like, you’re, we’re gonna, help you sleep better at night. Like literally just playing directly on the emotion of like, listen, like, and the other thing I like to tell it, like talk to people about is like, you we’re never like, you have to understand it as the business owner in some sense, because you have to be able to make decisions. But we’re going to take all the stress out of it off of your plate. And we’re going to be able to present it to you in a way that the way that makes it understandable for you, that makes you makes it easier for you to make decisions and ultimately you’ll make better decisions. And so we frame it. We frame it. I like to frame it more as a peace of mind service, as well as like we’re your strategic sparring partner service. Then, hey, we’re going to deliver to you this these like three or four deliverables, you know, because it’s like, you know, anyone can do that. And so I feel like if you, especially once you build a little bit of track record with it, it becomes really easy because then you start telling stories of the things you’ve done and then they’re like, okay, this is, [Michael Houck]: this is a no brainer. So yeah, there’s sort of like almost case studies, I guess. Yeah. Yeah. Okay. Well, look, man, I really appreciate sort of the, the transparency and the candor on this stuff. It’s a new area for me, but I think it’s an exciting thing for us to dive into on our end. We’re trying to decide between this, and as I mentioned, a couple other sort of final directions for the next one that we launch. We want to launch two or three this year, and basically by the end of the year, have a little suite of these agencies. I guess if we were to come back and say, yeah, we want to do financial services, I don’t look like yet, but if we wanted to go that direction, what is sort of the way that could make this interesting for you as a potential kind of partner for us on this? [Kurtis Hanni]: And if you’re like, Hey, I’m busy with bison, then, you know, no hard feelings, but just want to throw it out there. Yeah. Um, you know, I think, so one of the things, and we’d have to, we’d have to really explore explore that, explore it a little bit. But one of the things from like Bison CFO’s perspective is I really want where I think a lot of these other like big CFO firms have got it wrong is they bring all these CFO in as W2s and they say, you’re our employee. And then there’s like, like if you’re going in to be an employee in a big firm like that, you’re not generally probably the type of person you want CFO role. So it can often back, you end up with people that are not qualified to be in those positions. So one of the things that I’ve tried to frame it around is we have all of our CFOs as contract. And the way I like to frame it with them is we wanna be so good at helping you fulfill that as a contractor, you can go get your own clients. But if you were to go get your own clients, you would use us to fulfill because to help you fulfill. And so we have not explored this, but I think this is the route that I think we’re eventually gonna start going where if we could be some back office like fulfillment and you have the front end, then I think there’s some opportunities there with the systems like we’re building And the idea is that the CFO is able to say limit their engagement to five to 10 hours per month per client. And then we’re doing the grunt work of building all of the backend models and dashboards and tech stack and like all that sort of stuff. I think to me, that’s where I think it could be interesting to partner is because that makes it easier for you to build, but then that’s also for us headed that direction. So it’s like you would bring the startup experts, we’d build all the systems for you. And then that start, those people would be kind of the, you know, they would be your, in effect, your army working there. So I think that’s potentially where it gets interesting. I’m open to other things as well, but we ultimately want to be a firm that works with all different types of industries. So like we do have a startup right now and we have a CFO that’s a decent, I mean, he’s, he’s, I mean, I say decent, he’s, he’s really good. He’s done a bunch of international tax and he’s within like, I think, I don’t remember the numbers, but he grew a business from like 15, 20 million to hundreds of millions within like a two, three year period is a massive deal. And, uh, so we do have some stuff that’s like kind of in that realm, but it’s not like our sweet spot. But ultimately, I want Bison CFO to be like, we’re going to have the CFO that’s an expert in any industry that you’re in. And so, you know, I’m open to what other ideas you guys might have as well. But I think initially, it’s like, if you’re wanting to build an agency or service for you, then us being the fulfillment might be the best route. And then you guys would be able to piggyback off some stuff that we built. So yeah, I mean, look, that’s, that’s interesting to me. [Michael Houck]: Um, I’ll, I’ll put some thought into it on my side too. Sort of now that I’ve kind of see the lay of the land in terms of like, I don’t know everything else we talked about and I’ll, I’ll come back to you with, with some ideas. Um, but I think that’s, that’s a direction that, that could make sense. Um, yeah, I, I think if we go that route, I just want to know more and we could, you know, do this on another call or something at some point, just more more context and like, okay, if we’re gonna build out that backend with you guys, what does that look like, What’s like, you know, what are SLAs? What are the sort of different things that are included? What are the dashboards look like for the client? All that kind of stuff we’d have to get into the weeds a little bit, but I do think it’s appealing if we find these sort of like startup side folks and then don’t need to build sort of both sides of things on R. I do think that’s appealing. [Kurtis Hanni]: Yeah. Well, and like, if you’re in the startup world, you can build a lot of this stuff in a way that’s very systematic. And so I think it becomes very easy to build dashboards a handful of times, and then you have certain customizations in a way that is pretty on the delivery side. And then if you can find the right CFOs, then it becomes, I mean, it’s still a people business, so it’s still hard to scale because you can only scale as quickly as your people, but it becomes a lot easier to scale because of the similar industry, similar deliverables. So I’m open to chat. I mean, obviously we’re doing our own thing here, but I’m looking for ways to grow. And I think this was kind of a great question. The vision that we had, you know, long term. So I’m definitely open to that. And let me, I’ll actually, so there’s a tool and I, well, I, we can, we can talk about it, but there’s a tool that’s like an AI agent, like financial workflow. This kid is doing a gap year sort of situation from college. And he’s trying to build this specifically for financial analysis. He was originally thinking big companies, but he’s, in the midst of kind of building some stuff for us to see if it would work for our workflows. And I think, I think he’s at that stage where he’s still trying to find what his product is. And so I think you already having experience in that world, you kind of get that. And I think there might be some opportunity to, to, to see how work with him and what that looks like, And so make a connection there, but it may be too in the weeds for where you are right now, but you know, no, I’m, I’m in the place where I’m just talking to people. [Michael Houck]: So I think that that sounds like a great, great, uh, conversation to have if you’re, if you’re up for making the connection, I appreciate it. [Kurtis Hanni]: Yeah. I’ll shoot an email. [Michael Houck]: I’ll put you guys both on it and let you guys take it from there. So cool. Um, okay. One, one quick last question. Sorry. I know where I know we’re over. Um, if we, if we have one of these startup centric CFOs, how many clients, can a single CFO realistically take on at a given time? [Kurtis Hanni]: So the traditional kind of number is anywhere between like 10 to 15. [Michael Houck]: That’s higher than I thought. Yeah. [Kurtis Hanni]: I think especially with the way we’re doing it, I think that’s a good number. One thing in this conversation for another day that we’ve also thought about is, doing kind of an entry level offer that would require significantly more scaling, but where you could get a significantly higher number on a CFO using that overseas staff. So we’re not exploring that model right now because we think it kind of dilutes a little bit of our brand. And maybe that’s a thing for down the road. But for now, we’re trying to stick directly to fractional CFO. But using and I know one or two people that are doing something similar, but using almost an office hours model with access to the CFO, you can get to a more, in your case, more bootstrapped or less well-funded startup and kind of open up both ends of that market potentially. So that’s something that is kind of another offering that’s like sort of fractional CFO, but just below that. But it could work, you’d have to see what would work and what would work well for people in that startup world. [Michael Houck]: Yeah, I think we need to pull our, now that I sort of know the lay of the land there, I sort of need to pull them more about like, do they need the sort of high touch strategic, traditional fractional CFO? Do they just need like, really cheap AI driven bookkeeping? [Kurtis Hanni]: Or is it something in between like an office hour style with a more senior person or something Is it, yeah, is it like, are they wanting help with raises or, you know, more handholding on all that? Or are they wanting literally just to be able to put really good reports, presentations, like that sort of stuff together so that they can do all this stuff themselves. And I think you’re going to have people all over that spectrum, but it, you know, hard to know before you get into it. So. Cool. [Michael Houck]: Well, look, man, I don’t want to take up too much of your time. I really appreciate it. Um, um, if I have any follow-up questions after I started to meditate on this, weekend, I’ll shoot you a note. But yeah, happy to chat, man. [Kurtis Hanni]: No, and I’m going to open book just because I mean, to me, no one’s a competitor. We’re all playing our own games. And it’s I think we’re better if we share. So I just same thing across like, hey, as you explore it, even if we’re not involved, I’d be curious to hear what you guys are doing. Because I think we could learn from each other and help each other either way. [Michael Houck]: So yeah, dude, 100%. Let’s keep the channel open. And yeah, hopefully there is way to partner together. That makes sense. I think the direction you propose sounds like the right place to sort of start exploring that on, on our side internally too. So, um, we’ll just need to meditate on and talk with the team a bit, but, um, I like it. So yeah, we’ll, we’ll, we’ll be in touch. Yeah, for sure. [Kurtis Hanni]: Good to connect.