The transition from working at a large global enterprise to a startup can represent a steep learning curve, even for the most seasoned executives.
Liz Kistruck, CFO at Motorway, a UK-based startup that sells used cars to dealers, knows this challenge well. Before joining Motorway as its first finance chief in July 2023, Kistruck was the CFO at fashion marketplace Lyst and spent over a decade at online travel agency Expedia Group, including as Hotel.com’s CFO.
Despite her experience leading teams and guiding large companies through growth and transformation, leaving behind the security and stability of corporate life to pursue the uncertain path of a startup was challenging. “Everyone is so relieved that you are there but no one actually knows what they want from you. That is quite a disorientating position to be in at first,” she says.
Becoming a startup CFO
“The massive upside is that you’re much closer to the business and are able to effect change at a much faster rate,” Kistruck says of her transition to startup life. “The downside is that you suddenly lose that safety net of expert knowledge at larger corporations. I’ve had to learn an awful lot more about indirect tax than I ever had to know at Expedia.”
Motorway has raised more than £200m in four fundraising rounds since it launched in 2017. As the first CFO of a relatively young and fast-growing startup, Kistruck faces a unique set of challenging. Aside from conserving cash, Kistruck has been focused on developing the company’s financial forecasts to help inform decision-making. “One of the most important things you can do as a finance function is provide certainty,” she says.
People have forgotten how to deploy business logic
That being said, creating a forecast for a young company with limited historical financial data is challenging; there is more subjectivity to it and a greater possibility that it will be incorrect. There is a strong tendency among some finance leaders to want to make the forecast perfect but Kistruck believes such an endeavour is a false errand. “It just needs to be directionally right so we can understand our performance and start making better decisions,” she says.
Another challenge Kistruck has faced is convincing the rest of the organisation to get comfortable making decisions based on her forecast. “People working in early-stage startups are not always used to having a critical view of the business,” she says. “I’ll flag an issue and suddenly our expectations are completely different and everyone has to adapt quickly. That can feel quite disruptive, especially when people are reluctant to believe it.”
Data is a double-edged sword
While Kistruck understands the importance of data in informing decisions, she worries there can be an overdependence on statistics in her profession. “In this highly numerate world, there’s a strong desire to solve everything with data and people have forgotten how to deploy business logic,” she says.
An overreliance on predictive data is putting businesses at risk, according to Kistruck, especially when it is seen as a definitive answer rather than a guide. “If a finance analyst tells me the average price per unit is going to go up 10% next year but it has only been going up by 3% a year at this point, that makes no sense to me. I can’t just take that data at face value, I need to understand why it has increased.”
In her view, it has become “too easy” for CFOs to present the numbers and let the business deal with the consequences. “It’s important that we apply judgement to everything the data tells us and build a proper narrative around it,” Kistruck explains.
That same level of shrewdness should be applied when it comes to the deployment of AI, she adds. “It is generally pitched as this amazing tool but it’s not without its risks,” Kistruck says. “Not enough finance teams are having conversations about the risks.”
Why CFOs need to speak up
Beyond financial acumen, the ability to question the status quo is one of the most important qualities of a CFO, according to Kistruck. Yet not all finance leaders are willing to voice their opinion. Less than a third of CFOs “always” speak up when their viewpoint differs from the consensus and only 30% of respondents “always” challenge members of the executive team when they disagree on a key issue, according to a 2023 survey of CFOs by EY.
Kistruck, on the other hand, has had plenty of experience in this area having spent the majority of her early career dealing with sceptics. First as a woman studying in the male-dominated field of engineering and then as a 20-something consultant advising manufacturing sites how to streamline their processes. She describes walking into factories and having to explain to management teams what they were doing wrong. “How do you convince a group of people who are fundamentally sceptical of you and your capabilities to listen to what you are saying? I got very used to being met with utter disbelief.”
The most important things you can do as a finance function is provide certainty
These early experiences taught Kistruck how to navigate team dynamics, a skill that has served her well as a finance leader. “Standing with a sceptical leadership team and saying there is something wrong with the numbers is exactly the same as standing in a room with a group of factory workers and saying the filling line isn’t going as fast as it should,” she says.
CFOs should not underestimate the power of good communication, she explains. It takes a significant amount of preparation work to convince the board or management team to come around to an idea. “You have to build common ground and help them understand new concepts. You also have to accept that not everybody is always going to agree.”
Above all else, it requires having an “unshakeable confidence” in one’s own conviction, says Kistruck. “If you show even the slightest inkling of uncertainty then someone in the room will pounce on that.”
With the increasing demand for CFOs to take on additional strategic responsibilities within organisations, the ability to speak up has never been more important.
