Navigating Budgeting Challenges at PayPal

Erica Gessert, CFO of Upwork, and former Senior Vice President of Finance & Analytics at PayPal, joins CJ for this episode. They discuss Erica's experience with forecasting models at PayPal, emphasizing the need for adaptable models that change with economic conditions. Delving into her role at Upwork, Erica explains the company’s approach to customer acquisition costs, the significance of network effects in marketplace businesses, and Upwork’s take rate strategies. The conversation covers Upwork’s investment in R&D, how the company maintains platform trust in the face of bad actors, and the impact of AI. Apart from explaining how Upwork gained 20 points of EBITDA in just three quarters, Erica also sheds light on their North Star metrics, how they balance growth and profitability, their approach to M&A, and her experience reporting to Masayoshi Son during her time at Sprint.

—

SPONSORS:

Planful is a financial performance management platform designed to streamline financial tasks for businesses. It helps with budgeting, closing the books, and financial reporting, all on a cloud-based platform. By improving the efficiency and accuracy of these processes, Planful allows businesses to make better financial decisions. Find out more at www.planful.com/metrics.

MUFG is the largest bank in Japan and a global banking powerhouse with a focus on empowering Growth and Middle Market stage companies in North America and Europe. MUFG provides comprehensive banking services for VC-backed, PE-backed, and public companies with revenues starting at $40M. The bank combines its global capabilities with deep operational understanding to help companies accelerate their growth trajectory. Contact group head Bob Blee at bblee@us.mufg.jp to find out more.

Brex offers the world's smartest corporate card on a full-stack global platform that is everything CFOs need to manage their finances on an elite level. Plus they offer modern banking and treasury as well as intuitive expenses and accounting automation, bill pay, and travel. Brex makes it easy to control spend before it happens, automate annoying tasks, and optimize your finances. Find out how Brex can help you make every dollar count at brex.com/metrics. 

Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation. Over 9000 businesses use it to automate compliance needs across over 35 frameworks like SOC 2 and ISO 27001. Centralize security workflows, complete questionnaires up to five times faster, and proactively manage vendor risk. For a limited time, get $1,000 off of Vanta at vanta.com/metrics. 

Tropic is an intelligent spend management solution that consolidates your spend data and processes into one unified offering, enabling insights and decisive action. It doesn’t just show you where the problems are—it helps you solve them. From spotting hidden optimization opportunities, like duplicative spend, to automating those painful procurement workflows, to giving you the best market data that turns every vendor negotiation in your favor. Tropic combines smart insights with real human expertise to keep you ahead of the curve. Visit tropicapp.io/mostlymetrics to learn how

RightRev automates the revenue recognition process from end to end, gives you real-time insights, and ensures ASC 606 / IFRS 15 compliance—all while closing books faster. Whether it's multi-element arrangements, subscription renewals, or complex usage-based contracts, RightRev takes care of it all. That means fewer spreadsheets, fewer errors, and more time for your team to focus on growth. For modern revenue recognition simplified, visit rightrev.com and schedule a demo.

—

FOLLOW US ON X:

@cjgustafson222 (CJ)

—

TIMESTAMPS:

(00:00) Preview and Intro

(02:30) Sponsor – Planful | MUFG | Brex

(06:17) Budgeting at PayPal

(10:23) Forecasting Methodologies at PayPal

(13:15) The Impact of the Calendar on Forecasting

(15:01) Forecasting and Macroeconomic Indicators

(16:29) Planning Will Take as Long as the Time You Allot for It

(17:56) Surprising Insights About Freelancers

(19:26) Sponsor – Vanta | Tropic | RightRev

(24:55) Upwork’s Customer Acquisition Cost

(27:59) Freelancers and AI Adoption

(29:07) Network Effects in Upwork’s Model

(31:14) Upwork’s Take Rate Strategies

(34:49) R&D Investing at Upwork

(38:36) Selling Trusted Transactions

(41:12) Upwork’s North Star Metrics

(42:59) Recognising the Potential of AI

(44:05) How Upwork Gained 20 Points of EBITDA in Three Quarters

(45:29) Balancing Growth and Profitability

(46:41) Upwork’s M&A Strategy

(48:35) Long-Ass Lightning Round: A Big Career Mistake

(50:55) Reporting to Masa from SoftBank

(52:49) Advice to Younger Self

(54:18) Finance Software Stack

(54:55) Craziest Expense Story