Siqi Chen, founder and CEO of Runway Financial, has a very different pedigree than most accounting and finance software executives
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Welcome to the latest edition of the Finance and Accounting Technology Briefing, a biweekly newsletter jointly produced by StrategicCFO360 and The CFO Leadership Council. Our goal is to help finance pros make confident technology choices and give software providers a better understanding of their customers' needs.
A reminder: Our inaugural Finance and Accounting Tech Expo at the Javits Convention Center in New York City on October 29-30 is fast approaching. See the unique code at the bottom of this newsletter for a limited-time, free registration.
If you have feedback, ideas or product, people and company news for the Briefing, please email the editor at vince@CFOLC.com. We look forward to seeing you in October!
Building Software For 'Flow And Joy'
Siqi Chen, co-founder and CEO of Runway Financial, has a very different pedigree than most accounting and finance software executives: VP of product and growth at Postmates, head of product at Zynga, CEO of Sandbox VR and founder of one of the first social gaming companies.
So, when Chen says, "Extremely expensive software that no one loves using, no one wants to use and therefore won't deliver a lot of value is not going to fly anymore," it carries weight. After all, this is the person Andreessen Horowitz teamed up with to build a disruptive product in the business finance space: Runway.
Chen and his team’s collaborated planning software went into general availability this summer. In an interview, we asked Chen about the enterprise software market, the philosophy behind Runway's product and what GenAI can and can't do for finance.
Many CFOs love Excel. Are you trying to replace it?
Excel is one of the best pieces of software humanity has ever made. We're not trying to say this is terrible software and you shouldn't use it. When we talk to people who've adopted incumbent business software platforms and spent millions of dollars on the implementations—I've probably spoken to close to 100 people—everyone who's adopted one says they don't like it. They still do all of their forecast modeling in Excel or another spreadsheet. They copy and paste outputs into the incumbent platform, which is just wild to me.
As companies grow, their spreadsheet models become larger and more complex. You also said that with more employees, more people outside of finance need context. What do you mean by that?
For finance to have the kind of strategic impact it is expected to have, people need to understand how the business works, they need context. The tools that finance provides for understanding and context to the rest of the company are cumbersome and not digestible.
But what has been even more undervalued is that the CFO's job, the finance team's job, is increasingly about strategy; it's about forecasting and planning, and that's a thinking workflow. You have to think. We're trying to help finance make better decisions through better understanding, to build a better tool for thought, one that's enjoyable. If you do not feel that sense of flow and joy and smoothness [when using software], it's hard to think well.
Many vendors in finance and accounting say their products have artificial intelligence capabilities. Does Runway incorporate AI?
The two most significant opportunities in AI are the two things that ChatGPT cannot do. ChatGPT doesn't do anything unless you talk to it, so it's not proactive. And it doesn't know much about your business, who you are or your intent, so it can only tell you in general terms the right things to do.
When we think about using AI, we think about giving it as much context as possible. The second thing is we try not to make it seem like this is a magic creature you talk to. When you look at a business driver in your model, we explain how the driver is calculated in plain English. We use AI in a pretty understated way.
The Runway Financial website shows the product, almost like running a live demo. You don't always see the product on B2B software websites.
That was incredibly intentional. First, to build this product we had to treat the users as people. You're a CFO, but you're also a person. You use an iPhone, maybe you buy Nike shoes. The other reason we do it is because it's weird and strange that no one else does it. But mostly because we want the product to speak for itself. I'm not a very complicated person. I'm not good at selling a million-dollar contract over a glass of wine. The product has to work.
—Vince Ryan, editor, The CFO Leadership Council. vince@CFOLC.com
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Bill Finley is the CFO of Mat-Su Health Foundation, an organization that offers financial and strategic support to 501(c)(3) organizations that seek to improve the health and wellness of Alaskans living in the Mat-Su Valley. Bill described the software he and his team use.
We have three primary systems. We use Sage Intacct as our ERP. We migrated to Intacct in 2021 and use a regional solution provider to help us with Intacct management. For our AP and corporate card solution system, we recently (April 2024) migrated to Stampli. Finally, for payroll, we use Proliant. Stampli and Proliant integrate seamlessly with Intacct. As a foundation, we do a number of grants and scholarships. Currently, these systems do not integrate with finance, and payment requests are submitted through Stampli.
What's your joy, and what's your headache?
My joy is when we make changes that ensure we have the right amount of friction from our payment processes, making it easier to do the right thing and impossible to do the wrong thing.
My headache is probably that companies either say their systems can do everything or their systems don’t do enough. For example, we needed a solution that integrated accounts payable with physical and virtual cards. And we needed a robust approval matrix —sometimes as deep as four to five people depending on the department and amount. Stampli was the best tool we could find. It has worked great. But other companies still tried to show “workarounds.”
If you could wave a magic wand, what would you make software companies do for you?
Understand the importance of a robust approval matrix. Stampli’s matrix allows us to set approvals based on department, item (for contract management), GL code and amount. That is a perfect example of what I would love to see in all systems. Approvals should be built into all systems native to the software.
What’s your best piece of tech advice for others in your job?
Understand your needs up front. Know what is not working and what you need. Then, do your research talking with other companies and other partners. Finally, make sure to include end users in the process. Our Stampli migration took six months from when I first started talking about it and five months after I took my first meetings to review systems.
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Have news to share? Drop me a line at vince@CFOLC.com — Vince Ryan, editor
Tax software provider Vertex announced the acquisition of Germany’s Ecosio, an e-invoicing and electric data interchange company. Terms of the deal include upfront cash of $69 million and targeted earnouts of $76 million in cash and $35 million in Vertex shares.
Blackstone signed an agreement to make a majority investment in M3, a company that provides a popular hospitality-focused back-office accounting software platform. The cloud-based software serves more than 8,000 properties across North America.
Xero, a small business accounting platform, launched Xero Inventory Plus, software for small goods-based businesses to track and manage inventory across multiple locations and sales channels. The software integrates with Amazon’s fulfillment program and Shopify.
Paychex introduced Flex Perks, a digital marketplace of employee benefits that includes 17 self-selected additional benefits, including early access to earned wages, a financial wellness program and an alternative online bank account.
Cash management solutions provider Centime introduced an accounts payable automation platform that allows customers to earn interest on funds in an AP bank account. The high-yield AP account currently pays 4.25% but adjusts based on market rates.
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Have news to share? Drop me a line at vince@CFOLC.com — Vince Ryan, editor
Hospitality software company Agilysys hired Joe Youssef as chief commercial officer and SVP of sales for the Americas and EMEA. He joins after 18 years at Amadeus, a global IT solutions provider to the travel and tourism industry.
Acumatica named tech veteran Miten Mehta to the position of senior vice president of engineering. Mehta was hired to streamline the ERP company’s development processes and was previously engineering SVP of Salesforce and a co-founder of LifeON24.
Purchase-to-pay automation provider Yooz appointed John Gronen to the CFO seat. Gronen was formerly CFO of Sightline Payments and VPay. Joining Yooz as chief revenue officer is Jay Deubler, a veteran in tech sales whose previous companies include Avalara, Infor, Sage and Epicor.
Intuit announced the appointment of Forrest Norrod to its board of directors. Norrod is the executive vice president and general manager of the data center solutions business at AMD.
Billtrust named Corrie DeCamp as its chief product officer, reporting to CTO Joe Eng. DeCamp spent 15 years at Sabre, most recently as SVP of product. She has also been a Captain in the U.S. Army.
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Stock performance is as of the market close on August 20, 2024
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Plan to join us at the Finance and Accounting Technology Expo, the country’s largest annual trade show for buyers and vendors of corporate finance and accounting software. This year’s event will occur at New York’s Javits Convention Center on October 29-30, 2024. This is an excellent opportunity to network with industry peers, learn from experts and discover new products and services. Register online at StrategicCFO360.com/FATE/register/ and get a limited-time, free registration using the code czh510.
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