Not All Revenue Is Good Revenue: Rob Paterson of Employment Hero Explains

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Apr 17, 2025

Rob Paterson, CFO of Employment Hero and expert in smart growth, dives into the nuanced world of revenue on this show. He highlights the importance of distinguishing between good and bad revenue, and shares insights on financial metrics that matter. Rob discusses the challenges of accountability as a growth CFO and why a global expansion mindset is crucial for Australian startups. He even recounts a wild fraud story from his auditing days, adding a personal touch to his financial wisdom.

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INSIGHT

Not All Revenue Is Equal

Recurring revenue with high gross margins is far more valuable than non-recurring revenue.
Empty calorie revenue drains resources despite recurring payments, so focus on profitability per product line.

ADVICE

Key SaaS Metrics to Track

Focus on gross dollar retention and net dollar retention to ensure customers stick around long term.
Track CAC efficiency and unit economics closely for sustainable growth.

ADVICE

Balance Vertical and Horizontal P&Ls

Balance your vertical P&L (burn, margins) with horizontal P&L (CAC, payback) for comprehensive financial management.
Adjust focus depending on your business growth stage.

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In this episode, CJ sits down with Rob Paterson, CFO of Employment Hero, to talk about smart growth, why not all revenue is good revenue, and Australia's startup scene. They start by discussing when to turn down growth opportunities and which financial metrics are more distracting than helpful. Rob explains the challenges of holding people accountable when you are a growth CFO and how to be a Chief Reality Officer instead of a “CF-No”. He offers a view into the Australian startup ecosystem, highlighting what sets it apart, the challenges local founders face, and why global expansion from day one is a must. Rob also outlines his approach to forecasting and cost control, including how he applies the 80/20 rule to revenue, before sharing a wild fraud story from his auditing days.

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@cjgustafson222 (CJ)

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TIMESTAMPS:

(00:00) Preview and Intro

(02:18) Sponsor – Vanta | Tropic | NetSuite

(07:06) Not All Revenue Is Good Revenue

(14:09) Metrics: Overrated and Underrated

(16:14) Sponsor – Planful | Subscript | Rippling Spend

(20:18) Lifetime Value (LTV)

(20:11) Vertical and Horizontal P&L

(21:27) Chief Reality Officer: Holding People Accountable

(24:37) Staying Approachable as a CFO

(26:04) The Australian Startup Ecosystem

(27:28) What Sets Australian Startups Apart

(29:39) Going Global on Day One

(31:47) The Remote-First Superpower

(32:52) Competitiveness and Tall Poppy Syndrome

(35:24) Mastering the 80/20 Rule

(39:17) Building Strong Management

(41:32) Long-Ass Lightning Round: The Fraud Story

(46:10) Finance Software Stack

(47:06) Craziest Expense Story

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