Aversion of this article was originally published on the Abacum blog.
On March 16th, Abacum and Capchase co-hosted their very first event together in New York City. The objective? To bring together some of the brightest minds in the industry and discuss a few of the top challenges tech scale-ups face in today’s unpredictable landscape.
At the NYC event, Abacum co-founder Julio Martinez, and Capchase Co-founder & CEO, Miguel Fernandez, sat down together to share their experiences starting a company in the middle of a global pandemic. While these companies may differ in their offering, they both follow a similar mission: To solve some of the biggest pains around funding, forecasting, and financing for growing scale-ups.
To give a brief overview, Abacum is a financial planning and analysis software designed to help streamline the entire forecasting and budgeting process through fast automation and seamless collaboration. Capchase, on the other hand, is a financial solution that helps SaaS companies access recurring revenue to grow their business. At its core, Capchase revolves around financing, expense management, revenue management, treasury management, and FinOps.
While these two Spanish-founded companies may be the newest kids on the block within their respective industries, their proven track records and early successes have made them a force to be reckoned with within the fintech industry.
Below we’ve wrapped up some of the most impactful insights, advice, and learnings outlined by Julio and Miguel.
What brought you to start a company? Why did you decide to take the plunge in the middle of a global pandemic?
Miguel: As a fintech company, we knew we wanted to address the founder's funding dilemma because it's the most expensive pain they face. At Capchase, our mission is to help founders finance their business through upfront cash flow. By automating the entire funding process, our platform makes it easy for founders of Saas companies to access flexible payment terms to support their growth objectives.
Julio: Finance teams did not have the right tools to scale in startup businesses. In fact, the finance function had the poorest tech stack compared to all other teams. Once we uncovered this realization, we began asking, “How can we make finance teams more strategic? How can we empower finance teams with an FP&A solution so they become more of a business partner?” That’s when we decided to build Abacum. Our platform connects all data sources into a centralized hub so finance teams can have all the data they need right at their fingertips, allowing them to model, forecast, and conduct other value-added activities.
Why did you choose New York for expanding your businesses?
Miguel: We knew that we wanted to hire top talent in the US that was still close enough to our engineering team in Madrid. When building out our team, we were looking for candidates with extensive experience within the tech industry who could help our company scale. In order to hire the right people in a city with hedge funds, asset managers, and so on, we knew we were going to have to build our business in New York.
Julio: We always knew we would expand to New York because it's close to the amazing companies we would be working with. The city is a hub for scaling start-ups and innovation, which is exactly why we wanted to be a part of all the action. While we have customers worldwide, New York offers a tech ecosystem unlike anywhere else. Because of the high caliber of talent in this city and its booming industries related to fintech, it was clear that New York would be the perfect place for Abacum.
What have you learned from your own personal journey that has made you a successful CEO thus far?
Miguel: The ability to work and get things done quickly. Knowing how to present an idea that's easy to understand for anyone. When you first start a company, you base your performance on your daily workload. But when the company is more established and your team begins to grow, the daily tasks of a founder can be passed on to the employees. The founder's role transforms into an enabler for the rest of the team that oversees the overall operations. This transition from doing to watching is difficult. But as a leader, you need to be the one that removes blockers and supports employees wherever you can. You will never be able to learn how to be a good CEO until you do it yourself. Everyone has a different experience. Keep learning as much as you can.
Julio: Through my experience working in various companies, I learned many lessons. All my learnings from successes and failures I eventually brought into Abacum. For example, previously as a CEO, I wasn’t close enough to certain teams and I didn't understand the deep issues that affected each function. At Abacum, I now make sure to take a more hands-on approach as a leader. I also think it's important for a founder to fully believe in their mission and stick with it. You have to be actively connected to the problem you are trying to solve. By aligning employees to the mission and being 100% committed to your solution, you’ll be able to motivate the entire organization to work towards a shared goal.
You guys are both in companies that are undergoing tremendous growth. How do you keep everything together while still staying focused on the customer?
Miguel: We have a team that is dedicated to helping our customers grow their businesses. They are also in charge of trying to predict what’s going to happen down the line so they can take action and course-correct as needed. Sometimes we have to reshuffle customer expectations so we can help them bridge any gaps and solve their deepest pains. We need to understand data in order to serve our customers. This data serves as clues to what else we can do for them. We are constantly putting ourselves in the shoes of our customers so we can help them succeed now and in the future.
Julio: Customer obsession is at the core of our values. It truly drives our mission. We make customer satisfaction as operational as possible to ensure that it is a tangible metric we can meet. We have a customer advisory board and a research team that is constantly communicating with our customers to make sure that any feedback is being shared with the product team. These key players translate customer feedback and turn it into actionable product improvements.
What are some of the important metrics that you think founders need to have top-of-mind or should prioritize for growth and fundraising?
Miguel: Since we primarily work with SaaS businesses, growth rate, retention, and sales efficiency are all metrics we watch very closely. You can really gain a deep understanding of an organization when analyzing these three metrics. It can be challenging to combine all of your disjointed data that's spread across an entire organization. By consolidating real-time data with operational metrics, we are able to maintain better visibility of our company as a whole.
Julio: While we follow growth rate, retention, and sales efficiency as well, we also are looking at metrics that contribute to growth such as NPS or some form of customer satisfaction/customer engagement. Along with these metrics, our team is also very product focused. We want to see how customers are using the platform, how they engage with it, and so on. It’s important to us that customers are taking full advantage of the product.
How do you think finance teams can serve more as a strategic partner?
Miguel: Planning and tracking progress is critical for finance teams to leverage. Consider the impact of any changes and stay agile by stress testing and scenario planning regularly. These two factors can really make all the difference for an organization. We also make sure that each team has their own OKRs to measure. Our finance team is then in charge of looking over key metrics to help decide how the organization can grow, who we should hire, and where we should invest.
Julio: Finance automation tools will make all the difference when supporting finance teams to become more strategic. There must be a shift in mindset within the finance function. We saw a complete transformation among finance teams in how they operate during their day-to-day. Remove manual tasks and automate processes so teams can have more time to strategize. By leveraging real time data, finance teams can provide valuable insights to support critical decision-making among senior management.
What advice would you give early stage startups who are seeking financing?
Miguel: In my opinion, your team and market are the two most important things a founder should be focusing on. If you're solving a pain in a big market and you have a good team to deploy your solution, you can have a massive business impact. Ultimately you have to be able to recognize that a pain point exists and strategize on how to solve it. By breaking down the problem and having the solution clear for investors, that is when you will be able to see the most success.
Julio: Nothing beats the power of a sound MVP. Producing a solid product that has been tested and researched is essential. You must be able to prove to investors that your product serves as a solution to a problem. By doing thorough research and talking to future customers, you’ll be able to create a product that is set up for success.
Whether you’re founding a company, moving your organization overseas, or looking to scale your business, Julio and Miguel have both shown us that through hard work and dedication, anything is possible.
Interested in learning more? Watch the full fireside chat here.