Barry Plaga is CFO of Auth0, an identity management company based in Bellevue, Washington. The company provides an Identity-as-a-Service (IDaaS) platform to authenticate, authorize and secure access for applications, devices and users. We asked Plaga how he has leveraged his position to help lead the company through rapid growth since his hire at Auth0 in 2019 – particularly amid Covid-19.
How has the pandemic impacted how you approach your duties as CFO?
I’ve been a CFO of public and private companies for 30 years and I’ve seen a lot of cycles. My first CFO job was in 1987, and a couple months into it the market crashed. Then there was the dot.com bubble burst in the late 1990s, Sept. 11, the 2008 crisis and now Covid. It seems like this one has been the toughest one, but we’ve been able to adapt.
Going into 2020, one of the things we focused on was building the company in a way that is public-company worth — putting key metrics in place, being persistent, and focusing on our ability to scale the business.
The plan for 2020 has actually gone quite well, as we had already been remote friendly before Covid, with 60 percent of Auth0 employees working from home. Now Version 1.1 has been the same, but just with a few more people working remotely. From a financial perspective, as CFO I’ve made sure we had the protocols and policies in place throughout each stage of the pandemic.
Tell me how you led the company to a recent $120M Series F, including relationship building with key investors like Salesforce?
Earlier this year we had inbound calls from investors and venture capital firms looking to invest in the company. Then in May we started a relationship with Salesforce, realizing they could be a strategic partner for us to grow our customer base even faster. We also thought Salesforce would make a good investor in our Series F, which we closed in late June and announced in July. All of our then current investors invested fully in the new round.
When companies were raising money in February and March at lower valuations than they would have liked, we were able to double the Series E valuation that we had completed 12 months prior. Because of our relationships, we’ve been able to continue to execute our operating plan, enough to move ahead on our pre-Covid plan on revenue — in part because of lower expenses because our people weren’t traveling around.
Considering your experience helping companies grow rapidly, what are some key tips for other CFOs looking to navigate challenges that come with that, particularly for startups and high-performing companies.
The number one thing is to really put in place a way to forecast and measure where you expect to be in any one point in time. Companies invest a lot of effort into getting payroll or accounts payable done, but planning systems at the outset to project expenses, run rate, revenue streams and cash flows is also necessary. Companies need to know when they will need money 12 months before they are called upon. Companies must have muscle built around forecasting and consistency to scale a company efficiently .
Describe the new ‘virtual CFO’ and what this looks like, especially with the changing workforce and office landscape, and expedited by the pandemic.
I was somewhat nervous about it at first. I was used to being in the office, with the finance and accounting teams working together in real time, solving problems on the fly, onboarding new people to the teams. But in March we flipped the switch to completely virtual, and it has proven to be very successful given our team’s remote work expertise.
We’ve been able to onboard a new controller, new head of taxes, and we’ve been able to conduct an audit and close the books each month from our living rooms or bedrooms, or our cabins in the woods. Each member of our finance and accounting teams has shown they can work more independently and take charge of their areas and meet deadlines — in fact, even faster than before. Another thing we were able to do during Covid was implement a new ERP system, a new planning and procurement system — all working remotely.
I think this is going to be the wave of the future, where companies don’t need employees to always be working together in person — we can work from home and still get things done.