And now, on to the show.
Welcome to FP&A Today.
I'm your host, Glenn Hopper.
Today on the show, I'm joined by Stephen Hedlund, head of finance at Rillet, an AI-native ERP that's raised over 100 million from Sequoia Andreessen, Horowitz and Iconic.
Stephen is in a rare position.
He's building the finance function at a company that's rebuilding the finance function.
Rillett automates workflows that traditionally take weeks down to hours.
And of course, Steven's team uses their own product to do it.
Before Rillett, he held finance and strategy roles at Walmart, Molecule, and OpenSpace.
He's a Chicago Booth MBA.
We'll discuss what AI native means in practice, where automation delivers measurable ROI, and what works when you're closing the books in real time.
Steven, welcome to the show.
Thank you for having me.
You have a great podcast voice, Glenn.
That's my broadcaster voice right there that makes it very, very clear that I'm reading.
I'm fading back into that old DJ kind of voice when I do these intros, I think.
And then as soon as we start talking, I lapse into my Southern accent and y'all and all that.
I love it.
No, thank you for having me.
Very excited for this conversation.
Yeah, me too.
And I know we've been talking a long time about having you on, so I'm glad we're finally getting this recorded.
So you and I talked a lot about this before the show.
But for our audience I'd love to kind of start with your background, maybe even like what drew you into finance, some of the early lessons that you learned that still kind of shape how you work today and just kind of build us up to how you got here.
Yeah, no, happy to.
So I fell into finance partially by accident.
I was given a book on economics in high school and read the book, made incredible sense to me and said this is what I want to do.
I thought I was going to go work for the World Bank, maybe the Federal Reserve, something like that.
So I studied economics in undergrad.
It was impossible to get an internship there.
I went to a no-name school.
No one had any connections there.
Very foolish of me to try to pursue that there.
But a friend had worked at Walmart the prior summer in finance.
And said, hey, if you want to intern there, I had a great experience.
Go take this advanced accounting class with this professor.
If you do well, he'll refer you.
I took the class.
Professor referred me, had an amazing experience at Walmart.
Yeah, I ended up going there full time after college.
And that's really what put me into finance and accounting.
The other way I ended up here is I read Isaac Asimov's Foundation series.
I love Foundation.
That's a whole other episode right there about why they shouldn't have ever made a TV show about it, because it is an unfilmable book.
But sorry, I interrupted you because now I want to hear how psychohistory applies to.
Yes, exactly.
So I read this concept of psychohistory and I found it fascinating.
Right.
We're like.
He makes the case that if you have enough variables in the equation, you can predict the future.
And I love that partially because you can't prove it, right?
But also it makes sense theoretically.
And I said, oh, what if I could do this, right?
And that's part of what finance reports is.
If you have enough data there, you can forecast what the future is.
So when I was very naive and young, I thought oh, maybe I'll figure it out, go into stock picking and become rich like Warren Buffett.
That's obviously not what happened.
Instead, I ended up just doing finance.
But those are kind of the two things that pushed me this direction, intentionally and unintentionally.
I think that's really going to appeal to our audience too because, like us, they're a special kind of nerd.
You know, it takes a special kind of nerd to go into FP&A, right?
But actually, I never thought about that before.
But psychohistory, my obsession on models and I think the reason I sort of drifted away from sort of standard modeling and statistical modeling into machine learning was I got obsessed on the number of variables you could have.
And I read Foundation when I was like 11 or 12 years old.
And it must have been like deep in my mind, like you just need more variables.
You just.
Yeah.
If you just get more, it's going to work.
Right.
And it's so funny because now that I work at finance, more variables is bad.
Right.
It tends to be the simple models that are actually better at forecasting the future, whereas the more variables I bring to the equation give me a sense that I'm doing a better job.
But it's not the case.
It's the simple back of the envelope models that always end up being the best directionally.
I love it.
I don't know.
I had a professor tell me and to this day I have a problem with it but that I was confusing the map for the terrain.
I get so obsessed on these models and trying to make them perfect.
Anyway, that's a whole other conversation, but I'm probably going to steal that from you.
Psychohistory and finance going forward.
I love that.
You should.
You should.
And it's true.
And you're right.
They should have never made the movies.
Very sad.
I was very excited.
Thought it had a lot of potential.
Did not work.
Separate conversation on the community economics of Apple TV.
I don't think they're very good, but conversation for another day.
All right.
I'll try to bring us back, even though in the back of my mind I'm just going to be thinking psycho history.
The rest of the podcast.
But so you've seen both ends of the spectrum large enterprise Walmart, you know all the way from that, all the way down to early stage startups.
And I'm wondering, because you're seeing such a broad range, how has that range influenced your approach to I don't know?
Let's I mean before we even talk about the financials, like even building and leading team.
Yep, yeah.
So the story I come back to often is when I was at Walmart We did a 16 billion debt deal.
We were buying this company in India, wanted to finance it, $16 billion, massive deal.
My role was basically to sit in the room.
Once the money was in the bank, then I had to call the banks and make sure we allocated it properly for the next few days till the transaction closed.
But my job was basically to sit there, right?
I joined a startup a couple years later.
We did a $5 million debt deal.
I ran the whole show.
Still pretty junior in my career at the time, but I'm the one pitching the bankers, telling the story, then telling the board which bank I think we should go with.
Much different dollar size, but in terms of learning and impact, massive difference, right?
And that's what I find is the case between kind of these enterprise and startups is the maybe dollar amount is very different.
At Walmart, somebody would tell me, hey, we need a $10 million check for this thing.
I'm like, okay, great.
We move $3 billion a day.
That's not going to change the math at all.
Whereas here, we deal with much smaller dollars, but the impact I get to have is very different.
And I look for that in kind of the folks we hire as well is I tend to find folks that come from corporate background and have been kind of in corporate too long, have very different expectations for what a startup is.
In that at Walmart, we had entire teams to pull data together.
It was incredible.
And then at kind of later stage startups, you maybe don't have teams for data, but the data exists, right?
You have to go get it.
Whereas like, especially early stage startup, there is no data.
It doesn't exist.
So if you come in expecting that you're going to have all these resources to help support you, they don't exist.
Like you have to build those resources from the ground up to enable you.
So for the teams, for the people that want to do that, that find that exciting, those are the folks you can hire.
For folks that have a lot of experience, kind of with a lot of support from other teams like great, I'm sure they do very well, but they might struggle in that kind of startup environment is what I tend to see.
Yeah.
And that is that's so interesting because, don't you see, I mean especially in the role you're in.
I know we talked before the show and hopefully we'll have time to get to it in the show as well but obviously you got a great education at Booth, but when you dive into the startup world, it's almost like finishing school.
And it's more like imagine if you had just gone into, you know, just a more traditional path into a big company, or consulting or whatever it is.
But when you're in the startup, you have to wear so many hats and you can't just.
That's not my job is never the answer.
You have to do so many different things there too.
So I mean, do you find, And also you like being in the room for Walmart for that massive deal, versus the first time you're talking to bankers and trying to go through like sort of what your covenants will be and all the loan requirements and everything?
I mean, it just it forces you to put on your big boy pants and figure stuff out.
And it's funny how crippling like being in a large company can do.
It's like, well, that's not my lane.
This is just what I do.
Yeah, it does.
And you need leaders at those startups to empower you for it, right?
You want a leader that's going to say hey, here's a big project, but like, go do it and give you space to fail, give you space to mess up and back you up when it happens.
Or I had plenty of those experiences very early on, right?
Very junior employee.
But that's what you need from leadership.
Someone's going to back you up.
That was one of the reasons, like, actually, when I joined Relit, I didn't come in in finance.
I came in and go to market and partnerships.
We were too early at the time.
We were 15 employees.
I didn't need someone in finance.
But I kind of carved a lane for myself and ended up going in this direction that made sense for the company.
But it's a lot, like you said, you just have to wear hats.
There's a hundred things that need to get done.
And you have to focus on what's priority.
And if you've got some kind of ego in terms of, hey, I want to do this.
I don't want to do this.
You're not going to make it and you're going to hold the business back is a sad part, right.
Like it's not just going to be bad for your career, but it's going to be bad for the business.
If you have this kind of ego or ship on your shoulder for what I can and can't own, like you need people that are just going to say Hey, this needs to get done.
Great.
Let me do that.
Let me take the ownership and just go execute.
And if you have great leadership, even if you're not an original founder, you're certainly very close to that within the first 15 people.
But if you come in and you excel and you're taking, you can actually sort of invent your own role.
I mean, obviously you're the head of finance and that's your job, but you do a lot of other work there as well.
And I'm wondering, so what was it that brought you to Realit?
Were you Thinking startup mindset first and then found Rillet or did you find Rillet first?
I mean, what was the moment you knew this is for me?
This is what I want to go do with young kids and everything else going on in life.
You decide now let's go into the craziness of startup land.
This is the worst time of my life to be doing doing a startup.
But but also I knew I couldn't pass this up.
Like I said, like we talked about, I started my career at Walmart, loved my time there and also knew very quickly this corporate life is not for me.
I need to be somewhere small company moving quickly, where I can have a great deal of influence and can really help shape the company and shape the culture.
That's the kind of opportunity you have at a small company, especially early on, like this is to really be transformational in where the company goes.
But I've been looking for real it for the last 10 years, and that is not exaggerating.
So I grew up, I'll date myself here, but I grew up on Venmo and Robinhood, right?
These very sexy fintech tools.
So when I came into Walmart literally the largest company in the world by revenue I'm expecting oh wow, we're going to use the best technology in the world, right?
We're the best company in the world.
And day one, we're on SAP.
And it's like, looks like a program from the 90s, right?
And I'm like, wait, what?
Like, this is what we're using?
And then I joined a startup a few years later, and I'm like, okay, great.
Now we're going to use cool tools, right?
At that point, like, Modern Treasury was really big.
There's other companies that were coming out.
I was like, okay, we're going to use really cool tools.
And we were on QuickBooks.
And I'm like, wait, what?
We're a startup, like we should be using incredible new modern age tools, right?
And we didn't.
And then a little later we migrated to NetSuite.
Supposed to take 12 months, took 18, still wasn't implemented well,
And I'm coming in as a junior employee going like, someone's going to fix this, right?
Like there's no way these tools survive the future.
The next startup I was at, we were on Sage Intact and And as a user, I'm like, it's just so clear.
Someone is going to build something here.
I don't know who, I don't know how, I don't know when.
As I got a bit older and farther in my career, I started to understand why these systems have stayed around for so long.
I started to understand who the buyer was and the usefulness and all these things and like why there's just a moat, why NetSuite, for example, has been the default solution for the last 20 years.
But it was so clear as a user, like someone's going to fix this.
So I actually found Rillet during my MBA.
And they say at MBA that, you know, your network is going to lead to future jobs.
And that's a big part of the marketing.
Thankfully, in my case it happened to be true, which was nice is.
A friend of mine posted a internship for Rillet in our Slack channel.
And I immediately saw that and said, I don't want to intern here.
I want to work here full time.
Like, can you put me in touch with the founder?
And basically beg the founder, like, what do you need?
Right?
Like, this is the future.
I could go get some corporate job at Amazon.
Someone's going to build the next NetSuite.
And if I don't get to at least try, I'm going to regret this for the rest of my life.
Like, I have to try this.
And I told this to my wife.
It's like, we have a one-year-old, we want to have more kids.
This is horrible timing, right?
And my wife has done startups before.
She's gone from like literally day one to IPO.
She's seen the 100-hour work weeks herself, right?
So she knows.
But I'm like, I have to try this.
And so we jumped in.
And it was, you know, not the salary you should take after MBA.
It was not, you know, the safe place you should take with family.
It's like no good reasons to do this, except that I know like this is the future of finance and accounting.
And if I don't at least try to have an influence here, I'm going to miss this and wish I had done this.
You know the rest of my life.
Yeah.
Yeah.
So, I mean, and truthfully it's, you're gambling on the company, you're gambling on yourself, but they're also, there's a reason that you put in all the work for the MBA and you have this passion and it's like, I don't know, I could, it's that two roads diverged in the yellow wood or whatever.
You got, you got to pick the one.
So I respect that.
Yeah.
Yeah.
And it's so funny in some ways, like, and you can always do this looking back.
Right.
But in some ways I can.
I can look back over my history and career, which I honestly like plan very intentionally, i'll tell this to folks is i i think it's not too wise to like over plan your career right, like i thought i was going to go work for the world bank when i was 19 and that didn't happen, thank god right, and so it's.
It's actually, i think, poor to over plan career.
Much better just say yes when the opportunity comes.
And a lot of what i've done has literally like crafted my story for this of going from very kind of corporate finance and accounting into startups and being able to do the FPA plus the accounting work, all the reporting, all those details.
Then doing MBA, worked at Mercury for a bit where I did partnerships, right?
Which is literally what I've brought it really for the last year, right?
So there's all these things that I started to do and build up that have fed directly to what I'm doing now that I didn't plan for that.
You can't make those things happen when you're 18 and going to no-name school.
I grew up in the Midwest right.
I shouldn't be here at one of the hottest startups in Silicon Valley.
My story doesn't lend itself that direction, but it's happened.
That's great.
And I want to commend you on your lofty ideals and goals at 18 and 19, because at that age I thought I was going to be like the next Hunter Thompson.
That was my life goal.
It's not too late, Glenn.
Yeah.
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So I think I'm still thrown off by the Isaac Asimov thing.
So I probably should have asked this question earlier on.
But I think certainly most everyone in finance has heard of Rillet.
But for listeners who may not know Rillet, how do you describe what the company does, the problems the company is trying to solve?
Give me the overview of Rillet.
Yeah, the TLDR, especially for finance listeners, kind of what NetSuite did for the cloud era.
That's what real estate is doing for the AI era.
So NetSuite brought the GL to the internet, brought accounting to the internet.
Fantastic automation, honestly.
We're making the GL intelligent.
So with the way that technology has developed, the way, even like integrations applications have developed, and especially with AI today, using these old tools is really holding accounting and finance teams is kind of preventing them from moving quickly.
And that's what Realt is doing, is making the zero-day close a reality.
You know SAP and NetSuite and all the battleships the old guard is talking about, they're going to add you know they're adding AI into what they do.
NetSuite started with their MCP server and they've got NetSuite Next and there's...
SAP Jewel or whatever they're doing.
But I think about those platforms and I think about the technology they're built on.
I just picture the old database with a wrapper over it, sort of the web 1.0 era.
I'm not trying to dog any software platform on the show.
Obviously, I work with a lot of people.
I do think that there are limitations when you're married to the old.
This is the way things were versus what really does as you come into the market as an AI native ERP.
And I'm wondering, from your standpoint and from the company I mean, what does AI native actually mean and how does that show up differently for finance teams than the tools that they've been using in the past?
Yeah, it's a good question.
Speaking of some of the legacy players.
If I can take a step back for a minute, there's a book called Soft War on Larry Ellison.
And it's a fantastic profile of both him and really the rise of Oracle.
And it chronicles actually the story of Oracle and starting from kind of that on-prem database.
And then, as the world moved to the internet, Oracle literally had to basically scrap everything they had built and rebuild the entire application for the internet.
It was literally a vet the company moment where Oracle is competing with SAP and has to build this kind of completely new system for the internet.
That is the same thing happening today, right?
That's exactly what you're saying.
It's like these legacy tools, the architecture is different.
It is not just like you couldn't just take this on-prem software and throw it into the cloud.
Like we still have folks on QuickBooks desktop today.
It's something like 40% of their customers are still on desktop.
The tail is so long for these things, right?
But the architecture is different.
So in order for these legacy players to compete in this AI era, it's not enough to just kind of throw AI on top.
You have to rebuild the system from the ground up.
That was the core insight Rillet had.
We said, hey, we could actually build an AI tool on top of NetSuite.
That could be a direction we could have gone.
We have a vision for a zero-day close, have a vision to change the lives of millions of accountants and take them from kind of these back office manual workers to the heroes of the team, right?
So that's, that's this vision.
We could have built something on top of netsuite or any of the legacy tools, and i think there's a market for that.
But the hard part there is one you don't control your destiny.
It's kind of like i think about zynga, for example built one of the best gaming businesses potentially ever and then facebook changes their algorithm, throttles the company overnight.
Right, you're completely dependent on one source.
If you build on top of a system like a net suite, they change their api, change their functionality, do something differently in their system.
It could kill your business the next day, right?
So we knew we had to own the data and the data structure.
We had to control our destiny, both from a like business strategic standpoint, but also to provide the best experience for the customer.
We need to control that data right.
So that was kind of core insight for Relit is, hey, let's not build on top of these systems.
Let's actually go all the way.
Let's actually be ambitious and rebuild this system.
And at the time, massive bet, right?
Who wants to go compete with NetSuite, right?
There's a reason why they're the default system and have been for so long.
It's an incredible tool, incredible tool. i don't know if i want to say that if this goes on you know goes publicly since i i talked about that on linkedin but it's an amazing tool incredibly useful right but for this ai era you need a different system right you need a system that is built for this era and the same way in the cloud area you needed something built for the cloud era not on-prem if in the cloud era you were company running on on-prem software left in the dust.
Like, you're not going to make it, right?
Big switch for folks.
Big difference for a CFO to take a bet on NetSuite, right?
Now, NetSuite's the default, but it didn't used to be.
Companies didn't used to go public on NetSuite, right?
There was a time when they were building this narrative, but because the internet was growing and growing so quickly, folks knew they had to take a bet and get off this on-prem software and go to the internet.
We're in the same place today.
And the companies that don't make these moves early.
They will get left to the dust by the companies that do.
That's probably a really good reminder for CFOs who are old, like me for the most part, because I was around when all those debates were happening, going from on-prem to the cloud.
And it was the whole idea of, you know, for that it was, well, for security, we need to be on-prem.
And it's like do you really think you're going to be better at security than s3, you know than amazon, or then you know whatever, whoever the on cloud, the cloud provider was.
And i think now there's this finance and accounting people i mean accounting maybe more.
So we're risk averse, we're not.
It's hard to picture jumping into something new and you never want to be on the bleeding edge and there's a whole saying you know, no one ever got fired for picking ibm, or you know whoever the incumbent is, or whatever.
So how does that play out in your go to market?
And how do you see like, what's the profile of a customer who is like you know what?
We need a change.
We're going to go ahead and we're going to ditch IBM and we're going to ditch, you know, the old guard, and we're going to go with something new.
What's happening out there that people are seeing this and making the change?
Yeah, it's changed a lot over time.
So in the early days, and even still in many ways today, the best customers are the millennial CFOs and controllers right.
It's folks like myself who, in many ways, NetSuite was always forced upon us because someone else was making the decision right.
So it's like me in that profile, right?
I come into this startup, wanna use cool tools, but we use NetSuite, right?
And it's not that I want to, it may not even be that CFO wants to, right?
But it's what's there.
So but I expect, as a millennial who's grown up with consumer grade software, I expect that in my business applications right
So you see, this with tools like Ramp and Brex is they have completely rethought how AP works And they have consumer-grade software for business application.
And they are just crushing the market.
You kind of apply that same lens to ERP is to have a tool which is built in a modern way, built with modern UI UX moves, quickly implements in four to eight weeks instead of six to 12 months, right.
For folks like myself who are millennials that want to move fast and want a modern tool really easy sell.
Honestly, always has been.
To your question about the market piece, the hardest part is, dare I say, on this podcast publicly.
It's the 50-year-old CFOs right.
It's the folks who have implemented NetSuite two, three, four, five times, and they don't love it.
They know it's probably going to take 12 to 18 months, but they're not going to be around in three years when the renewal comes up right.
They're not actually going to use this software.
They're going to pay somebody else to do it.
And so for them, it's an easy choice to go with these old ones.
Those are the harder sales.
Those become easier every day as we get companies like Merkur and Platform, as we get companies like Function Health, as we get these really sizable, really complex organizations onto Realit.
It becomes very easy then for a CFO to go, oh, wow, that company runs on you guys?
Oh, wait, you have a public NASDAQ company on Realit?
Okay, great.
That becomes then much easier for us to have the conversations.
Oh, wait, you're backed by Sequoia?
Oh, Sequoia backed Stripe and Ramp and all these really ambitious category-defining companies.
Okay, you'll probably be around for a while, right?
Like, those conversations become easier every single day, but that's still what we deal with, right?
It's like, NetSuite is safe, Relit is potentially a risk.
On the flip side, if you bet on a system that's gonna slow your team down, that's also risky, right?
I think about sales teams, for example.
Running on salesforce, your reps are spending two three, four hours updating their deals.
Your competition that's actually either like augmenting salesforce with that or using a modern ai native crm.
They're spending more time with customers, more time responding to customers.
They're spending more time in the field than your reps are and you're going to be screwed from the sales side if you don't implement ai in your sales teams.
It's the same thing in finance If you're not implementing AI, if you're not using the AI native tool like Relit or even other AI native tools like Ramp and Braxton folks like rethinking the system, you're going to have large teams that move slow.
You're going to take a long time to get your folks to numbers.
You're not going to add the value to the business that you can in terms of like driving strategic decisions and direction and margin and pricing and all of these things.
You can't have those conversations because you don't have the data.
You're held back by these large, complex teams.
You need to make a change to your NHTSA report.
You hire someone for 10K.
It takes six months to get it done.
You're held back by these old, complex systems.
The teams that adopt new tools are going to swim laps.
You run laps around you.
They're going to absolutely dominate you in the market if you don't adopt these tools.
Yeah.
And I think it's important to inject here you know everything that you're saying.
You say well, of course they're going to say that that's marketing or whatever, but you're living that developer's thing of it.
You're living that developer's thing of, you know, eat your own dog food.
And you, as the head of finance there, you're using AI inside, uh, really its own finance function.
So can you tell me about where uh, and how you're using AI, and whether it's built into to really or or not within finance at Relit, and how that's already changing the way you operate day to day?
So we think about AI in three ways.
One, we think about how the data comes into the system.
Think about what to do with the data when it's in the system and how to get data out.
Right.
And those are all really important pieces, especially with the ERP.
Your ERP is only as good as the data coming in and the integrations that bring that data into the system.
And this is often a big gap with legacy ERPs is yes, all the data is in the system, but it's often done through either manual uploads or very clunky third-party integrations.
And you miss a lot of that deep metadata.
AI needs that context.
And so often like Stripe is a perfect example.
Stripe and NetSuite do not talk to each other well at all.
So if you want your Stripe data in NetSuite, you often use a Snowflake aggregator.
You might do manual journal entries every day, every month, and you lose all that customer history within.
So you can't ask things of the data like, who's my biggest customer?
Which customers churned?
What contracts are at risk?
You can't do any of that because the data isn't even in the ERP.
That's where we've rethought the integrations differently.
Is that hey, if we want AI to be useful, we need to get useful data into the system.
So we'll take our Stripe integration.
We've rebuilt that integration ourselves from the ground up to make sure that when you connect Stripe to your ERP into Relet, all that customer detail comes into the system.
And then AI can both reconcile that data down to the granular level automatically and then also be useful for queries and questions on that data.
So when we talk about ai, we think about how the data comes into the system.
Once the data is in the system, in some ways we don't use ai that much because you don't need it right.
You don't actually need ai to estimate what your revenue recognition should be.
You don't want that.
You don't want any hallucination in there.
What you want is really good software, taking the total amount, the start dates, the end dates, still enabling you to adjust and do amendments, do edits, do voids and refunds if you need to.
You still need that kind of core accounting architecture in there, but you actually need a lot of AI in the middle once the data's in the system.
But you do want to use AI both to pull data out as well as do actions within the ERP.
So we can use AI to book accruals, for example, where you can ask Aura, one of our AI agents within the system what accruals do I need to book this month?
It will look back over the history and suggest accruals and you can tell or to book that entry.
So we'll do this for Reelit every single month, right?
Where we'll look back over, ask what we're missing and then tell it to book the journal entries for us.
Reelit will also fully automate cash reconciliation.
So all those entries coming in AI will look through, read even now today, will like make suggestions for you or even give confidence intervals and say hey, I think this is probably you know, 90 know likely.
It goes through this category, this department, and so reducing that time to reconcile cash basically to zero.
And then payrolls full automated, prepaids are fully automated, fixed assets fully automated, all these kind of sub ledgers flow in, both through just good software and then quite literally using ai on top to massage, clean and automate much of that data directly.
Yeah, it's interesting as you talk through that.
It's really the big.
The next challenge around AI for companies, and this goes beyond just finance use, but I think ERPs for years love to say well, we're the system of record.
Well, you're not if we're having to translate Stripe data into just a journal entry and we drop everything.
It's not the system of record, it's this data warehouse, whatever.
But I've been reading a lot about context graphs lately and so trying to figure out how to make the AI more useful by giving it this context across all the processes, all these systems and everything.
And I think the nature not saying that you guys are doing context graphs now, but the nature of where you started you're going to be closer to able to gather this larger context and have AI that communicates with it.
You're just going to be better geared for that than one of the legacy systems I would imagine.
Yes, very much so.
And it kind of goes back to what we talked about earlier of kind of this transition from cloud to AI era is even just the modern tools once again, like a Ramp, a Brex, a Rippling.
They think about their API and their data output differently than many of the older tools.
And so it's actually easier for us to pull once again that deep metadata into the system because of these new age tools and these new ways of thinking.
And so really to get like the best benefit in automation across your tech stack is you need to be thinking about a kind of new age, modern AI tech stack across every vertical, across AP, across AR, across GL, across payroll, kind of using any of these older systems.
You'll have that same problem, right?
You'll have it with NetSuite.
You know you'll have it with trying to put these old systems into like you'll get exactly that right.
You'll get just either deep you know journal entries that don't make any sense or like you'll miss all that deep metadata transactional history that without, like you said, that context graph, without having that detail for ai, it's just not useful, right it's?
I remember when i was at walmart we talked about the data lake for years, about bringing all of our data together so it could be useful.
And even now, a lot of these old enterprises are trying to clean up their data.
I don't know if that will ever get figured out, if they'll ever fix that.
But we have an opportunity and most of our listeners here have an opportunity, as they're building their finance function at these companies, to think differently about hey, if we're going to be the Walmart, the Amazon in 10 15, 20 years from now, what are the systems we need to put in place today So we don't have those data lake issues later on, right in 20 years?
So if you put in systems like Realt that are thinking about data architecture very differently, it then enables you to have access to this data.
Like you said, these context graphs all across the organization.
Yeah.
And as you were talking about that, I'm also thinking about, I think for a long time ERPs were trying to be the complete Indian.
They were the system of record.
They were doing everything.
But then competition, the whole SAS era competition came up and it's like well, if this company does AP better, if this company does AR better, if this company does expense management, and then people start bolting on and then you kind of get this unbundled ERP and then you end up with this disparate data that's not flowing through systems and what is the source of truth, and reporting gets more difficult.
And I'm wondering, as Relit scales do you picture one day Relit doing everything?
Or is it like you know what?
This is our lane, this is our focus.
People are gonna use stripe and ramp and you know whatever other tools like.
What parts of the finance foundation have you started to sort of formalize?
And do you picture being part of real it versus a connector to real it?
And like are there things that you're focused on now but decided, you know what we're going to hold off on that?
I don't know.
I don't know if that's too much inside baseball, if there's a, how much you can share on that, but I'd love to hear what you can tell us about it.
I'll defer in some ways in this will can always change tomorrow.
I'll say, I guess this will always change.
But the honest answer is if we can't do it well, we should not do it.
So for example, not to talk in NetSuite too much, but NetSuite has their own CRM.
Almost everyone still uses Salesforce.
NetSuite has their own FP&A tool.
Almost everyone still uses an outside sourced one, right?
So my perspective has always been, and will always be, if we can do it well, we should do it.
But if not, then like, why bother?
Tools like RAMP and BREX are so exceptional.
If we try to compete with them, we would be toast.
It would be bad for us and bad for our customers.
It is much better for us to focus on the integration is.
Whatever you're going to use your ramp Bragg script lead spin, whatever how can we get that into the system effectively so you can do your books?
Whatever you use for payroll, we're not going to try to compete there.
Very foolish for us.
That's not our DNA.
Instead, we're accountants.
How can we build the best integration possible so your data can come in accurately?
You want to use Stripe?
Great.
I don't want to compete with Stripe.
Do you want to compete with Stripe?
No way.
Right.
So let's figure out how we can make the best integration possible and really be that system of record.
Because you're right.
They're like you're going to bolt on all these best in class tools, which only works if you have good pipes.
That's the only way it works.
Otherwise you get that exact same problem where you're trying to put Stripe into your ERP and it's not connected and you're using Snowflake or whatever.
But if the integrations work at that kind of deep data layer, then you can actually be a system of record and still use the best in class tools around the ERP.
It's funny.
As we talk through all this, I know Relit customers have probably a lot more data than you guys as a startup do.
And so I'm thinking about you're probably not even seeing the full advantage of the software, because I haven't been in the startup space myself too.
I know how difficult it was when you you're trying to make a forecast and everything relies on these inflection points.
And it's all assumptions on top of assumptions on top of assumptions.
And you just don't have data.
You've got public market data and you've got a lot of assumptions and ideas.
But whereas you bring on a customer to real it, they've got 10 15, 20 years of data.
Suddenly they've got.
They can do a whole lot more with the software than you can.
But I don't know.
I mean, I guess I want to talk a little bit about the internal team, because it's funny trying to balance what we talk about here because you're doing so much in the world of finance and accounting with Relit.
But also, you know, I'm sure our listeners would like to know what's happening internally.
But you also do a lot of work outside of just the finance there.
So i guess i'm just going to open the door here, maybe for you to tell me about the nature of the work that you you are personally doing at real it now and sort of how you're looking at your team today and if you're, you're probably still defining kpis and still like collecting data and figuring out what's important.
I don't know, this is sort of a because we're getting close on time, but i want to just Maybe open the kimono a little bit to your world and how you're running finance and how you're thinking about data and what else you're doing right now.
Yeah, no, great question.
Most of my time today is spent on growth is how can we grow the business and.
In some ways, it helps we're still so early.
The board doesn't care about the budget that much.
Growth covers a lot of sense.
At the same time as the company is growing.
We're now series B.
We are starting to get more formal there.
We have set a budget for this year.
We have a plan for the year.
It's already changed, right?
Even Q1.
We're only about a week in, but our forecast is already changing for the quarter based on how it's going.
So everything is changing very quickly.
But I do have the benefit in this seat of being able to focus most of my time on growth.
And it's great because that's what matters for the business, right?
If we're not growing, almost nothing else matters, especially in this kind of AI era.
So most of my time and energy is spent on how can I help Relic grow faster?
How can I spread this message of real to more CFOs, broaden their reach and brand recognition in order to get more folks in the funnel effectively?
I hate to say that, but I hate to sound like a sales guy.
But that's what I think about is how do I get more CFOs in the funnel right?
How do I increase our growth metrics?
And what's fun then is both very fun to be in this seat.
So Ramp is actually hiring a senior director of finance transformation right now.
They report to marketing and they are hiring an ex-CFO or VP of finance.
And their whole role is going to be posting on social, being active on LinkedIn, going to conferences, being ramp's face at, you know, to the world.
And Ramp was recognizing.
You need an ICP, someone who has done this before, who knows your customer, and kind of be that marketing voice to the customer.
In many ways, very similar to what I've been doing at Rillet for the last 12 months.
I think we're going to see every company have a role like this.
And what I love about this is Rillet's finance and accounting team will always have to be customer facing.
In some respect is even as we hire a controller, for example, and they do our audit and build a team, they're going to have to be customer facing.
They're going to need to go to dinners.
Other controllers will ask them, how do you run Rillet on Rillet?
They are literally going to be in many ways, our best reference.
And sometimes that's not comfortable for a controller, right?
But to me it's very exciting to be able to build a finance and accounting function with that kind of mindset, with that opportunity and appeals to the right kind of folks right who want to build a tool that they themselves could be using.
One of our solutions consultants told me yesterday one of the reasons he joined is he is a prior accountant, was an accountant and then he kind of went into solutions consulting at a different ERP.
Now here's at Rillet.
And he's like, I want to build a tool that makes me want to be an accountant again.
And that's why he joined Rillet is was so excited about what we're building and kind of the future here.
And the sad part is when we really nail this, maybe he goes back into accounting for real.
Right.
But the beauty is like that's what we want to build here is I'm building the tool that I would like to use that if I were still in kind of traditional finance seat, I could buy real it.
Like I would buy real it.
That's the beauty of what we're doing here, what we get to build.
And that's why we have so many CPAs that joined the company, so many finance and accounting folks.
Like our entire team is filled with people who have lived this pain themselves and want to build a better system that they themselves could use either in prior roles or in future roles, which I think is really exciting.
And that's so interesting because you think about There's so many people who sort of have this idea of I want to start a company.
I'll figure out what it is later.
And then you sort of end up trying to shoehorn some weird idea that nobody's interested in.
But if you have finance and accounting people who've experienced the pain and know what they're solving for, then it's just a matter of execution.
Yes, exactly.
Yeah, I actually found a notebook of mine from a few years back. where I literally start up ideas.
And one of those was building ERP, question mark.
So this is obviously not a new idea by any means, but this is true of many employees.
Like our implementation team, for example, we do our implementations in-house.
50 of that team is CPAs is folks that have seen these workflows and know this experience and have implemented NetSuite Acumanica Sage have done these implementations.
And so when a controller buys Relic goes through implementation, they can trust this team, other person in the process, because they've done these workflows right.
Our head of product is an ex-controller herself who implemented NetSuite and Sage.
Like she's building the tool for herself.
And that makes such a difference when a tool is built by the users.
We're still built by literally the best engineers, the best designers, right?
Like you still have to augment those skills.
We're now hiring actual marketers in our team instead of me, which is a much, a much large relief, you know.
So you still need those domain expertise.
But having folks in C, like we said, who have lived this problem, seen this problem, experienced the pain themselves, it makes you build a product in a completely different way.
Yeah.
And as you go through and say all this, what I'm really picturing is yeah, you're the head of finance, but because you're so focused out in so many other areas, you realize the importance of finance but also where it sits in the organization.
So you're actually out there, you're identifying the levers, going out and actually pulling them and driving the growth of the company.
And I think as Relate gets bigger you stay there or whatever your future holds, your approach to finance is going to be very different than someone who came up through CPA audit, whatever the old school sort of traditional path is.
And I think you're sort of indicative of what the future of finance looks like.
I think so too.
I hope so.
It's so funny.
I was actually talking to my founder this week as we were talking about marketing metrics.
And he's like, oh, do we know how much we're paying for a lead from Google?
And I'm like, oh yeah, I could pull it up right over here.
And he's like, Well, it's awesome, right?
Like he had just been talking with another group of founders last week and they're all complaining about how they can't get marketing data and can't get analytics and all these things.
When you have someone who their whole life has been analytics and reporting and budgeting right and comes into a seat like marketing, like of course we're going to have the data right.
Like, of course, we're going to have it.
Like, I need that for myself to make decisions.
So it's yeah, it's very refreshing to be able to be in the seat and still in many ways, use my finance jobs, but do it in a marketing fashion to really enable us to scale that function in a very high ROI way.
Okay.
Well, we talked before the show.
You said, how long is this going to go?
And I said, man, I'm going to shoot for 40 minutes.
I'll never hit it.
We're at like 48 minutes right now.
Well, we're going to edit it down anyway.
We'll trim it.
You'll cut all the bloopers I did.
So I think we'll be all right.
So we have two questions we ask all of our guests.
And so I'm going to throw these out to you now.
The first is, what is something that most people don't know about you?
Something that they couldn't just figure out just by Googling you?
Yeah, so I'm very active on LinkedIn.
So normally, I would say I have two kids, and I love being a dad.
But you can see that on LinkedIn.
So that's, that's not a surprise.
What is probably harder to find out about me is I love coffee.
And when I say coffee, I mean, like the bougie, snobby, hipster coffee.
So I will typically only drink coffee from a hipster coffee shop.
I will only order beans that are from Ethiopia or Kenya, and then only from a few select sets of roasters.
And I don't care about refined foods.
I can't tell the difference between two buck chuck and $100 bottle of wine.
But when it comes to coffee, I will not drink Starbucks thing is complete garbage.
So I really, really enjoy a good brew.
The other thing folks will not know about me is that I'm deeply religious as well.
So it informs a lot of my approach to parenting, to startups, to how I lead the teams here at Real It.
It's a lot of how I was raised, obviously, as well.
And in many ways, like, Being deeply religious felt taboo for a while, especially in Silicon Valley.
There's actually a Silicon Valley episode, which is very funny, where this guy gets actually outed for being a Christian.
And it's funny because it feels true that in many ways feels like it's changing today.
But it's still hard to know how to talk about faith in a corporate setting, especially in Silicon Valley.
But it is kind of deeply true to who I am and how I approach the world.
So I think it's important to mention.
Yeah.
And it's that moral foundation and applying good ethics and principles that come with it.
All right.
The last question.
And I'm very curious what you're going to say here, because all the work that you're doing and all the work that is built into real it.
But I know you have a finance background and are a finance guy at heart.
And we ask everybody.
So I'm really eager to hear your your answer here.
What is your favorite Excel function and why?
I love this question.
I remember literally my first week at Walmart.
I remember looking to the treasury manager on my left and he was all in Excel, no mouse going wicked fast around the model.
And I was like, I want to do that when I grow up.
I love Excel.
The funny thing is my favorite Excel function, I'm a very simple man.
It's the sum if statement. as it's very clean, very simple.
I use it in every single model.
I would probably say some ifs.
I actually always use some ifs, even if it's a some if.
I think it's a better formula.
I don't know if I'm unique in that sense, but I think the some ifs even if you're doing one column is much better.
I'll use index batch if it's complicated, but it just works, right?
It's a very useful, very practical formula.
So yeah, maybe call it simple, but you know, some ifs all the way.
Perfect.
Perfect.
Love it.
Okay.
So I was trying to Google while we were talking.
I can't find the exact quote.
I wanted to.
I wanted to take us out with an Isaac Asimov quote, but it's something along the lines of and I thought this was you've just got my brain hooked on foundation and psycho history for planning, but it was something like planning is doesn't guarantee success, you have to improvise as well.
Or something like that is a quote from Isaac Asimov on it.
But I couldn't find the exact quote.
But I think it's very funny on an FP&A show and what you said.
And that whole planning isn't sufficient because it's part of our job title.
And then adding in the improvisation and thinking about how you're doing that at a startup.
I think that's fantastic.
So this has been great fun.
I hear you typing away.
Were you able to find it?
I don't know.
I'm asking Chad JBT.
Ah, here it is.
To succeed, planning alone is insufficient.
One must improvise as well.
Isaac Asimov, Foundations.
There it is.
I need to put that in my next finance book that I put out.
Oh, man.
That is so good.
I forgot he had said that.
This is so funny because when you think about Foundation Series, the whole point is that you can't do anything about it.
It's going to happen anyway, but And I struggle with the idea as a startup of like how much you can influence
Right.
In some ways, like what's going to happen will happen.
And it's literally not worth the bald and the gray hairs and the wrinkles to stress about every single meeting, especially early on in seed stage.
Every meeting feels hypercritical.
Every partner meeting, like everything is hypercritical.
So in some ways, like everything matters.
You need to knock on every single door, push every single direction you can.
And also, it's either going to work or it's going to not.
And you don't know.
So I put so much pressure on myself in the first six to 12 months of Rillet.
And I still put a lot of pressure on myself now, but my perspective has changed, in that everything's fixable.
If you knock on enough doors, you'll find one.
And you might have to knock on.
A hell of a lot of them is when we host dinners.
I used to cold invite 200 CFOs.
These dinners, like I would literally email 200 CFOs myself personally.
Like didn't automate it through Gmail, right.
Like full, just like, you know, like forcing this thing into existence.
And now I don't have to do that, right?
Because we've built this network of folks we can invite to dinners and it's very different now.
But early days at a startup requires doing things that do not scale and really just pushing it every door possible or you're not going to make it.
Love it.
Well, Stephen, this has been fantastic.
Really enjoyed you coming on the show and wish you guys the best success.
And good luck with your recent move and with the kids and everything.
I know you've got your hands full.
Thank you, Glenn, very much.
This has been a fantastic conversation.
Looking forward to doing it again.
Thank you.
