The Finance Role in Silicon Valley

Apurva DesaiTwitter: apurvadesaiBlog: www.apurvadesai.comE-mail: apurva.desai@yahoo.com

Agenda

• The Lure of Silicon Valley • My Background• High-Tech Finance Career Path• Steward and Strategist• Evolution of the Strategic Finance Function• Strategic Analysis and Toolkit• Finance Competencies, Skills, and Attributes

Life in the Silicon Valley

• Innovation, ingenuity, and wealth potential is part of the DNA of Silicon Valley

• Entrepreneurial energy is everywhere and even Finance professionals are drawn to startups

• A variety of great career options (large, medium, startup companies) are available in Silicon Valley but the Finance function has a similar blue print for each

• Gain infrastructure, process, and strategic skills at larger companies and then leverage those experiences to help smaller companies scale

• The following are my tips and philosophies for the Finance function I’ve learned during my career

COMPANY

TYPE Public Accounting

MatureLow Growth

MatureGrowing

MediumHi Growth and Newly IPO

Venture BackedStartup

KEY SKILLS • Accounting

& Controls• CPA• MBA

• PROCESS• Strategic

Finance• Business

Partnership

• Managing/ Forecasting Multiple Hundred Million $ P&L

• Processes, Systems for Growth & Scale

• Cash Mgmt• Metrics• Process• Fundraising• M&A

My Background

TIME

Recommended Silicon Valley Finance Career Path

PublicAccounting

Large Mature

Company

Medium Hi-Growth Company

StartupInvestmentBanking

Management Consulting

Gain infrastructure, scale, and strategic skills in public accounting and large companies then apply to growing smaller and startup companies

Many Hi-Tech Finance Career Paths

Large Mature

Companies

Large Mature

Companies

Medium Hi-Growth Companie

s

Public Accountin

g

Large Mature

Companies

Medium Hi-GrowthCompanie

s

Startups

Finance Role- Steward and StrategistWhy Optimize?

Finance Function

Analysis &Interpretation

Capital Optimization

Planning

StakeholderManagement

Record& Report

RiskManagement

PolicyEnforcement

Strategist

STRATEGIST

STEWARD

• Both are equally important but Job # 0 is the Steward; followed by greater impact as a Strategist

• If Finance isn’t effectively recording and reporting and creating and enforcing process, they won’t have a legitimate seat at the Strategist table

Source: Deloitte & Touche

8

Evolution to an Empowered Finance Function

Listened to

Included

Empowered

Trust/Respect

Value add

LeadershipImpact Potential

Full Partner

Focus Areas for Each Step

Listened To Included Empowered

• Data Ownership

• Flawless Recording and Accounting

• Business Acumen• Problem Solving Ability• Strong Financial Analysis

• Strategic Thinking

• Influence• Initiate

Business Value

Source: Intel

9

Types of Strategic Analysis

Can it make money?

Is it competitive?

What will make the competition

irrelevant?

Does the customer value it?

Value Innovation

Competitive Strategy

Business Models

Value Proposition

Finance supports (providing data), evaluates (challenges, weighs, tests), and creates (new approaches and ideas) strategies

Source: Intel

10

Analytic Tools for Strategy

A Clear-Enough Future

Alternate Futures

A Range of Futures

True Ambiguity

What Can Be Known?

•A single forecast precise enough for determining strategy

•A few discrete outcomes that define the future

•A range of possible outcomes, but no natural scenarios

•No basis to forecast the future

Sample Analytic Tools

•“Traditional” strategy took kit

•Decision analysis•Option valuation models•Game theory

•Latent-demand research

•Technology forecasting

•Scenario planning

•Analogies and pattern recognition

•Nonlinear dynamic models

Examples •Strategy against low-cost airline entrant

•Long-distance telephone carriers’ strategy to enter deregulated local-service market

•Capacity strategies for chemical plants

•Entering emerging markets, such as India

•Developing or acquiring emerging technologies in consumer electronics

•Entering the market for consumer multi-media applications

•Entering markets w/o stable regulatory and political states

12

3

?

Identify the range of possible outcomes and plan analysis accordinglySource: Intel

11

Competencies/Skills to Successfully Influence Strategic Decisions

Influence Skills/CompetenciesPartnering

Communicate & Align GoalsNetworkedNegotiation

Foster InnovationTeamwork

Action OrientedLeadership Excellence

Strategic Skills/CompetenciesBusiness AcumenStrategic ThinkingProblem SolvingCritical Thinking

Strategic ModelingCreating Vision

Environmental SavvyFinancial Analysis

Strategy and influence skills to focus on as part of professional development