Looking for practical help and advice on an operational area that may be outside your realm? Each month we spotlight one of our talented operators, who’ll share their expertise and offer insights and ideas that may help improve your own operations. This month we spoke with Elena Gomez, CFO at Toast and the newest member of Operator Collective’s Board of Advisors.
Congratulations on Toast’s IPO last month. Tell us about the company, and what it was like to join at such a pivotal time for the business.
ELENA: I’m super excited to have joined Toast earlier this year and helped shepherd them through an IPO process. But in reality, the IPO is just a stop on our journey. I’m even more excited for what’s to come for Toast. We have big ambitions to continue to grow and power restaurants of all sizes on our platform.
For those of you not familiar with the company: Toast is a cloud-based, end-to-end platform that is purpose-built for the restaurant industry. We have almost 50,000 restaurants on our platform. Restaurants are complex businesses with a lot of moving parts. And by working with them and understanding their needs, we’ve built a comprehensive suite of subscription services, hardware, and financial technology solutions. We aim to help restaurants of all sizes streamline nearly every aspect of their operation.
You’ve worked for wildly successful public companies like Zendesk and Salesforce. What are some key practices or learnings that you took forward into your new CFO role at Toast?
ELENA: There are several learnings but I’ll boil it down to three:
1. Putting the customer at the center of what we do. Customer success is a key principle at Toast. Similar to Zendesk and Salesforce, we put the customer at the center of all of our decisions. We want to help restaurants in our communities thrive especially after the tough last 18 months of Covid. I personally look forward to meeting customers and understanding how we can make their businesses more successful.
2. Building a world-class organization with an eye towards diversity. It’s a hot market and we are living in an unprecedented time. But nonetheless, we have big ambitions at Toast to continue to grow as restaurants come out of the pandemic stronger than before. To achieve our goals, we will continue to add employees to the Toast family. Hiring diverse talent is a key part of the playbook at Zendesk and Salesforce, and it has been a game-changer. One of the reasons I joined Toast was because they value diversity as well. This week I joined a fireside panel with our Latinx employee resource group, “Migente”. I was excited to see over 100 Latinx Toasters participating on the call.
3. Staying agile and scrappy. If there is anything I learned at Zendesk and Salesforce it is to stay agile and scrappy. Even the best of plans can have a curveball thrown in the mix. For many of us, Covid was a major curveball. Customer expectations will continue to go up and evolve, so staying agile/flexible/current on all fronts is very important. The great news is the team at Toast is battlefield-tested. They’ve survived through Covid and given back to restaurants during this time.
What do you advise early-stage companies with IPO aspirations to be thinking about at each point in their trajectory? Any tips to help support financial IPO readiness?
ELENA: Look for talent with public company experience, especially in finance and legal. Don’t wait too long to hire your CFO, VP of Finance, and Controller. Oftentimes, founders hire one leader to figure out the accounting side and expect that same person to do the finance side. I believe you need both or you will never get the headlights out further because the finance leader will be stuck closing the books.
In terms of financial IPO readiness, I would make sure you deeply understand the path to sustainable growth. This means knowing the metrics and assumptions of what will drive durable growth, and ensuring the critical exec team is bought off on them. Next, I would understand some of the basic hygiene things in finance — how well the team closes the books, how they do their forecasting process, etc. And of course, pick your board carefully. Find a balance of operators and ex-operators.
You’ve led finance in SaaS businesses for more than a decade. Which company-level metrics do you tend to monitor most closely?
ELENA: Love this question. First and foremost, I look for growth across the board. But metrics I pay a lot of attention to are: ARR Growth, Net Retention and Churn rates, CAC, and Payback periods. If you can drive healthy NRR with solid unit economics, you will continue to sustain durable growth over time.
You are a board member at PagerDuty and Smartsheet as the audit committee chair. How do you measure your success in that role? And what advice would you have for someone in that position for the first time?
ELENA: I focus on making sure I continue to add value for Jen and Mark and to their management teams. In order to do that, I stay current on key themes, read all the board materials, and often connect with other board members or management in between board meetings to get a pulse of key issues or themes emerging. As a board member, you will be exposed to many different topics, and there will be great quarters as well as tougher quarters. Being a steady sounding board through all of it is important.
But even more important, is to not be afraid to offer constructive feedback. Most CEOs want a board that is willing to lean in and offer a balanced outsider perspective. As a new board member, I would encourage you to build a relationship with another board member outside the boardroom. Over time, the relationships will build naturally but I found it super beneficial to have a board member I could call when I didn’t understand something and/or someone I could debate a specific topic with outside the board room.
In your opinion, what are some ways the tech and venture industries could do a better job of empowering the next generation of diverse leaders?
ELENA: Well, I have to say this is so so hard. We have a pipeline problem. I would love to see venture and tech firms partner with local universities and colleges to change the diversity of graduating students. Even the best of companies — that are looking for diverse talent and have great intentions — don’t have the pipeline to succeed.
In addition to fixing the pipeline problem, we can initiate change in the workplace as well. Some ideas that come to mind are focusing on funding startups with diverse founders, coupled with placing diverse talent across tech (startups and large tech). One of the reasons I joined Operator Collective was because I admire the ambition of changing how venture is done. Operator Collective is just one example of how we can begin to make the change we need to see.
AOC often talks about the skills she picked up as a bartender, and others talk about what they learned working retail. What were some of those formative jobs for you?
ELENA: One job I had was helping my mom with her AVON sales. She sold AVON to her family and friends so we could have extra money. I helped her write out the orders, deliver the catalogs, and sort the purchases when they arrived. Technically it wasn’t a paid job, but my mom loved the help. I learned to organize my tasks but also observed my mom juggle two jobs. That work ethic has passed on to me now.
Another job I had was working at Longs Drugs (now CVS). I was a checker and occasionally worked the inventory on the floor. Sounds silly, but at 16 I knew that inventory on the shelves had to be found easily by customers or they wouldn’t buy it. Kind of reminds me of conversations I have now around taking friction out of the buying process. I enjoyed being friendly to my customers and checking them out quickly, and learned the most basic customer success skills. All of my happy customers kept coming back!
What’s your secret super power?
ELENA: I can connect the dots and have fairly decent emotional EQ. This has helped me tremendously in my career. As a leader, connecting people and insights across an organization just makes your job easier. In addition, understanding people’s emotions can help you resolve issues faster, connect with a customer or employee, and have greater empathy for them.
