42. Is it possible to pivot to profitability?

In this episode, we discuss: Is it possible to pivot to profitability? We are joined by Libby Penn, she is the COO of Improbable.

We chat about the following: 

• What's the COO's role in the pivot to profitability
• What are the right bets to make in a business?
• How should we balance profitability and growth?
• What is the importance of well-documented data?
• What is realistic in terms of profitability?
• Who is responsible for capturing data?

References:

LinkedIn

Thinking in Bets by Annie Duke 

Biography: 

Libby Penn has experience in various business development and operations roles across a number of high-growth technology businesses on SaaS and enterprise models, B2B and B2C, in both the UK and the US. This has given her an in-depth insight into the complexities that come with the role as COO.

Summary:

• Gender roles and microaggressions in the workplace. 0:05
• Bethany Ayres discusses the challenges of being a woman in leadership positions, including societal expectations and performative ally ship.
• Bethany launches a series of free webinars to support first-time female executives and aspiring executives, focusing on topics such as taking a seat at the table and choosing the right life partner.
• Brandon and Bethany discuss the challenges of navigating gender roles and microaggressions in their personal and professional lives.
• Bethany shares an example of a leadership team meeting where a male colleague's swearing and apologies towards her created an uncomfortable work environment.
• Pivoting to profitability for a B2B SaaS company. 4:55
• Bethany: Analyzes company's strategy, identifies unprofitable areas for cuts.
• Bethany: Looks at lease and office expirations, considers cost-cutting measures.
• Bethany and Brandon discuss strategies for improving profitability, including renegotiating cloud contracts, focusing on profitable channels, and optimizing GTM motions.
• They also discuss the importance of tracking data properly to make informed decisions about spend and identify areas for improvement.
• Brandon and Bethany discuss partner strategy, testing, and doubling down on successful partnerships.
• They emphasize the importance of hiring quality people who are well-respected within the partner company.
• Pivoting to profitability, focusing on market strategy, operations efficiency, and automation. 12:42
• Brandon and Bethany discuss the importance of qualitative analysis to validate data-driven insights for profitability.
• Brandon and Bethany discuss the importance of operational efficiency and automation in a company's shift to profitability.
• Balancing growth and profitability for startups. 15:55
• Libby highlights the importance of balancing risk and innovation in investments.
• Libby emphasizes product development as key to profitability, while Bethany focuses on balancing growth and profitability.
• Data analysis, product development, and customer focus in tech companies. 20:03
• Analyze cost of delivering product, profitability of product sets, and customer profiles to make informed decisions.
• Prioritize bets on most profitable products and customer segments, layering up over timeframe (18 months).
• Libby and Bethany discuss the importance of data-driven decision making in marketing, with Bethany expressing frustration at the lack of data sophistication in internal systems and the need for more rev ops professionals.
• Brandon and Libby discuss the importance of understanding customer CV values and go-to-market motion.
• Libby emphasizes the need for a solid customer base with a sticky product that provides value.
• Customer success teams and their impact on product development and profitability. 26:19
• Bethany: Customer success teams can eat into gross margin, especially when product is not user-friendly.
• Libby: Good customer success teams can help with customer adoption, but implementation is also important.
• Libby: UX teams struggle to deliver due to engineering and sales leaders' lack of time and willingness to listen to user research.
• Using AI to improve product adoption and financial management in startups. 30:36
• Companies prioritize user experience to drive commercial success.
• Libby emphasizes the importance of financial acumen in business leaders, including understanding cash flow and opportunity cost.
• Brandon highlights the challenge of accountability and controls in a company with a tight runway, and the need for transparency and financial literacy across the team.
• Financial transparency and empowering employees to make better decisions. 34:48
• Libby emphasizes the importance of financial education for teams, citing her experience at Blippo where transparency and knowledge-sharing helped employees stay motivated during difficult times.
• Bethany expresses interest in learning more about financial education resources, and Libby suggests exploring pre-made materials or seeking help from professionals.
• Libby suggests building financial literacy into onboarding processes to ensure employees understand how the business makes and spends money.
• Brandon emphasizes the importance of VPs of Finance being leaders and communicators, not just number crunchers.
• Libby emphasizes empowering employees to help build the business.
• Employee X presents a new pricing strategy, improving gross margin.
• Investing in people, understanding company finances, and empowerment in the workplace. 42:32
• Bethany shares her experience of feeling empowered in some organizations but not in others, and highlights the importance of giving people access to power and information to contribute.
• Libby encourages leaders to create opportunities for people to connect with them, such as monthly drop-in lunches or cross-functional working groups, to foster a culture of inclusion and empowerment.
• Libby emphasizes the importance of understanding a company's finances to make informed decisions.
• Unlocking the state of a business through data analysis can lead to clearer conversations with investors and improved profitability.

This podcast uses the following third-party services for analysis:

Podcorn - https://podcorn.com/privacy