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Brian Weisberg of Tidelift on the Heuristics of Forecasting

Brian Weisberg, CFO at Tidelift, breaks down some key heuristics to use in your forecasting with a big focus on the headcount planning side of the process. He also discusses the importance of understanding the business’s goals, why you need to be realistic with expectations, and why companies should invest early in a financial position.

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Episode Summary

Forecasting is essential for every team, and it involves tracking key performance indicators and financial metrics to measure each team’s success. But many people don’t discuss best practices, especially when you begin to add headcount into the mix.

Our host Joe Michalowski welcomes Brian Weisberg, the CFO at Tidelift, back to The Role Forward podcast. While they work through departmental headcount planning, Joe and Brian also discuss the importance of understanding the business’s goals, why you need to be realistic with expectations, and why companies should invest early in a financial position.

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Featured Guest

Brian Weisberg

CFO, Tidelift

Brian Weisberg is an experienced finance leader who enjoys working in startup cultures. Before joining Tidelift, he held VP of Finance roles at companies like Code Climate and Anchore.

Key Themes from the Episode
  • Every finance leader should understand their business. Headcount planning starts with gaining a better understanding of each team. You need to collaborate with everyone, from VPs to managers to ICs, to understand what everyone’s daily responsibilities are, which will help inform headcount decisions.
  • Be realistic with your expectations. You need to be realistic when forecasting your team count and building your revenue forecast. Your financial model is a circular reference, and you need to balance how long you have to burn to get to where you need while also being realistic with expectations.
  • Invest as early as possible in a financial specialist for your company. The first finance hire should have a background in accounting and FP&A, while also looking forward toward growing the business operations function of the position as the company grows.

Episode Highlights from Brian Weisberg

5:18 — Collaboration Is the Key to Forecasting Headcount

“Generally speaking, when I think about headcount mix, I put the spreadsheet down, close the browser, and go and talk to the team. At the end of the day, when it comes to planning, your plan is only as good as the conversations you have with your peers. So get out. Talk to your VPs, your CXOs, your directors, your managers, and even your ICs. The most important thing, and the most valuable thing, you can do as a finance leader is to understand your business, understand how it works, qualify opportunities to close deals, build the product, even the content marketing… You’ve got to get out and understand what everybody’s doing in their day jobs, and that’ll help inform the decisions that need to be made when it comes to headcount planning.”

11:42 — Factor In Ramp Time for Sales Reps

“That’s where a thoughtful Excel model or a tool like Mosaic where you can account for ramp times will really help you figure out how many reps you need based on some revenue goal and then working backward and thinking about the ramp times. In a fully functioning go-to-market motion for a B2B SaaS business, we’re talking maybe six to eight months for a ramp to get productive. But if you’re early-stage, right around that PMF point, it might be twice that. It might be 10, 12, or 14 months; it’ll be a while. It’s usually longer than you think. So when you’re planning out your headcount for the sales reps, don’t forget to plan out the ramp times for those reps.”

15:06 — Solutions Architecture Is Core to the Sales Process

“In the world of enterprise sales, at least in my experience — because I’ve worked at a number of DevOps and DevSecOps companies — solutions architecture is core to the sales process. So your sales reps can get that surface area technical to the conversation, but eventually, you need either a sales engineer or solutions architect to come in and have a technical conversation and start discussing implementation, training, integration, and so on.”

27:43 — The 3-30-300 Rule

“[Jones Lang LaSalle] JLL talks about the 3-30-300 rule which says that you should spend $3 on utility and $30 on rent for every $300 of payroll. So 3-30-300 on utilities, rent, and payroll. Pretty easy to keep in mind. Another number, just generally in that space, which I just think is even simpler, is about $1,200 a person a month that is working in an office is generally how much you’re going to spend on rent and utilities.”

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