Social fitness startup Strava’s CFO says the recent IPO flubs show it’s time for Silicon Valley to rethink the ‘grow at all costs’ mantra
Category : entrepreneur
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Silicon Valley used to push startups to grow at all costs. But as the recent slate of disappointing public debuts shows, investors think it’s time for the unsustainable model to change.
Christine Park, Chief Financial Officer at fitness-based social media network Strava, agrees. As the financial executive at a leading startup, Park is in the select group of Silicon Valley employees that can make that change happen.
“That’s where you can say, Hey, profitability does matter,” Park told Business Insider. “As you continue to scale a business, you have a bigger household. It’s more about the mentality of being efficient, and balancing that with continuing to hit growth metrics.”
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Park joined the startup in July after working as the chief operating officer at venture firm Goodwater Capital for two years. In a tight labor market, which can be even tighter for young companies looking to hire senior financial executives, startups may not be able to recruit seasoned CFOs with multiple exits under their belt. But it’s this narrow definition of who a CFO is and what is in his or her purview that Park wants to undo.
“The CFO seat allows you to have this 10,000-foot view of what’s happening, the marketplace, the capital structure, and the broader implications of what’s going on,” Park said.
Part of that change, Park said, is because data analytics has become increasingly important across all functions of the business, from marketing and customer service to engineering and design. In the future, all CFO candidates will have to come to the table with an understanding for and interest in working with data to make the business succeed, instead of retroactively reporting key performance indicator metrics.
“The role has changed in terms of what you’re doing, and what the perception is internally of what you should be doing,” Park said. “Especially when you think about venture capital backed companies, you have to have someone who can be external facing with a strong working knowledge of how to think about scaling finance and accounting for the long term.”
Which is exactly why, Park says, that a grow-at-all-costs mentality isn’t going to help startups like Strava that aren’t profitable. It’s one of her goals over the next year to change that, but as recent disappointing public offerings have proven, there isn’t as much of an appetite for breakneck growth as there is for a measured strategy for sustainability, Park said.
“It’s very frenetic, for lack of a better term, but it’s just the way it works,” Park said. “It’s how businesses are built. But I am making sure that everyone’s kind of marching to the same beat, and that requires a certain level of system management and controls.”
Park is keeping a close eye on some of Strava’s business partners like Peloton that haven’t seen the most favorable reception in public markets, but said Strava is not considering its own IPO any time soon.