Chinaccelerator Batch 18 8X8: Lily Liu, Co-founder & CFO at Earn.com
Summary
TLDRThe speaker shares their journey from being a Stanford pre-med student to becoming a CFO and entrepreneur. They highlight their transition from traditional roles in finance and consulting to building startups, including a hospital in China and a distressed tech company. Emphasizing the importance of pragmatic, analytical thinking, they discuss managing risk, resource allocation, and the strategic role of a CFO in startups. The talk underscores how foundational business principles apply to both large and small companies, and the unique challenges and opportunities faced in the startup environment.
Takeaways
- 🌅 The speaker is presenting at 4 AM in the Bay Area, showing their commitment to the event.
- 🌟 The speaker met Oscar in Shanghai and has maintained their connection over the years.
- 📊 The talk focuses on the speaker's journey from CFO to entrepreneur, sharing personal experiences and insights.
- 🎻 The speaker grew up in Piedmont, California, as a Chinese-American, following a traditional path with activities like playing violin and swimming.
- 📚 Initially pursuing a pre-med track at Stanford, the speaker shifted interests to political science and economics, leading to a master's in East Asian studies.
- 🌏 An internship with Morgan Stanley in Hong Kong and a job at McKinsey in New York led to various global experiences in business.
- 🏥 The speaker's first startup experience involved building a hospital in China, despite having no prior knowledge of hospital construction.
- 💼 The speaker's second startup experience was turning around a distressed company, 21 Inc, into a new company, Earn, which was later sold to Coinbase.
- 📈 The role of a CFO in a startup is more about managing risk and resources strategically, not just finances, often requiring a pragmatic, analytical approach.
- 🧠 The speaker emphasizes the importance of business fundamentals and common sense in startups, regardless of the specific industry or product.
Q & A
What was the speaker's initial career path and how did it change?
-The speaker initially pursued a path towards becoming a doctor, studying pre-med in college at Stanford. However, they developed interests in political science and economics, leading them to a master's in East Asian studies. They eventually entered the business world, working at Morgan Stanley in Hong Kong, McKinsey in New York, and in private equity at KKR.
How did the speaker end up working in a startup-like environment in China?
-In 2011, the speaker took a job in China to build a hospital, which was a challenging and character-forming experience. This was their first startup experience, even though it was not in the tech sector, and they were asked to be the CFO.
What was the speaker's role in the hospital project in China?
-The speaker was the CFO of the hospital project. Despite not fully understanding what being a CFO entailed, they took on the role and learned to manage the financial aspects of the project.
What was the second startup the speaker was involved in and what were its challenges?
-The second startup was a company called 21 Inc, which was heavily funded but in a distressed state. The company had a negative balance sheet and no functioning product or team. The speaker had to help restructure the company and eventually sold it to Coinface.
How does the speaker view the role of a CFO in a startup?
-The speaker sees the CFO role in a startup as more than just managing money. It involves managing risk, strategic resource allocation, and taking a holistic approach to the business. The CFO needs to think pragmatically, solve business problems, and help the team make informed decisions about product development and team composition.
What are some of the core skills the speaker believes are important for a CFO in a startup?
-The speaker believes that core skills for a CFO in a startup include thinking pragmatically, solving business problems analytically, and being able to apply common sense. They also need to be detail-oriented and have a quantitative approach to resource expenditure.
How does the speaker describe the difference between working in a large institution and a startup?
-In large institutions, the speaker notes that things are more established and there is an existing business model. In startups, the focus is on finding product-market fit and being willing to do whatever it takes because the structure is not as established. Startups require a more flexible and adaptable approach.
What was the speaker's educational background before entering the business world?
-The speaker was born and raised in Piedmont, California, and attended Stanford University. Initially on a pre-med track, they shifted their focus to political science and economics, and later pursued a master's in East Asian studies.
How did the speaker's early experiences in business influence their approach to startups?
-The speaker's early experiences in business, particularly at large institutions like Morgan Stanley and McKinsey, provided them with professional training and a foundation in business principles. These principles, they found, were applicable in startups, albeit in a more flexible and adaptable manner.
What advice does the speaker have for those considering a career in startups?
-The speaker advises that being a part of a startup requires a willingness to take on various roles and responsibilities, as well as the ability to think pragmatically and analytically. They emphasize the importance of understanding business drivers, being detail-oriented, and being able to test and innovate quickly.
How does the speaker view the role of a CFO in terms of revealing 'secrets' in the business?
-The speaker views the CFO role as not just about managing finances but also about using data and analysis to reveal insights that can influence strategic decisions. This includes understanding market dynamics and bringing a perspective that can help in resource allocation.
Outlines
🌟 Journey to Becoming a CFO at a Startup
The speaker begins by acknowledging the early hour and thanks the host for the invitation. They recount their background as a Chinese-American from Piedmont, California, with a traditional upbringing that included playing the violin and studying hard with the intention of becoming a doctor. However, their interests shifted towards political science and economics, leading to a master's degree in East Asian studies. The speaker's entry into the business world was somewhat accidental, starting with an internship at Morgan Stanley in Hong Kong, followed by roles at McKinsey in New York and private equity at KKR. The narrative then shifts to the speaker's first 'startup' experience, building a 500-bed hospital in China, which was a challenging yet character-forming experience. They also mention their role as CFO in turning around a distressed company, 21 Inc, which was heavily funded but faced significant financial and operational challenges.
🚀 The Role of a CFO in Startups and Risk Management
The speaker delves into their experiences as a CFO in startups, highlighting the differences between large institutions and early-stage businesses. They emphasize the importance of pragmatism, structured thinking, and analytical problem-solving in a startup environment. The speaker challenges the stereotype of a CFO as merely a number-cruncher, arguing that in a startup, the role is more about managing risk and resource allocation, particularly time, which is often more valuable than money. They discuss the necessity of a holistic approach to business strategy, product-market fit, and the importance of making informed decisions on product development and team composition. The speaker also reflects on the value of their experience in larger companies and how it has shaped their understanding of what makes a business successful.
📊 Insights from a CFO's Perspective on Business Growth
In the final paragraph, the speaker focuses on the role of a CFO in driving business growth, emphasizing the need for a structured and analytical approach. They discuss the quantitative nature of the CFO role and the importance of understanding business drivers and operational metrics. The speaker also touches on the concept of 'secrets in plain sight' and how data analysis can reveal insights that influence resource allocation. They reflect on the value of their diverse experiences and how they have contributed to their ability to understand and grow startups. The speaker concludes by challenging the traditional separation between technical and business founders, arguing that there are universal principles of success that apply to all well-run businesses, regardless of their stage or industry.
Mindmap
Keywords
💡CFO
💡Startup
💡Resource Allocation
💡Product Market Fit
💡Operational Metrics
💡Analytical Approach
💡Risk Management
💡Strategic Thinking
💡Entrepreneurship
💡Institutional Training
Highlights
The speaker met Oscar in Shanghai and has maintained contact, appreciating the opportunity to share insights on being a CFO at a startup.
Transitioned from a traditional path to medicine to business, reflecting a non-intentional career trajectory.
Educational background includes Stanford and an initial interest in political science and economics.
Started in business almost by accident with an internship at Morgan Stanley in Hong Kong.
Worked in various prestigious institutions like McKinsey and KKR, gaining global work experience.
The speaker's first startup experience was building a 500-bed hospital in China, which was a challenging and character-forming venture.
Second startup involved taking over a distressed company with significant debt and no working product, leading to the creation of a new company.
The speaker's role as CFO was not by initial intention but emerged from a need to be useful in various situations.
CFO role involves managing risk and resource allocation, not just financial management.
Being a CFO in a startup requires a holistic approach to managing both money and time.
The importance of applying common sense and business principles learned from large companies to startups.
The difference between working in large institutions and startups, with the latter requiring a willingness to do what it takes.
The speaker's approach to being the most useful in any given situation, leading to taking on the CFO role.
The misconception of CFOs as just number crunchers, while the role involves strategic thinking and revealing market insights.
The role of a CFO in startups involves understanding business drivers and operational metrics to inform decision-making.
The value of the speaker's experience in large companies became clearer over time, especially in the context of startups.
The speaker's view on the integration of technical and business roles in startups, emphasizing the commonalities in what makes successful companies.
The speaker's thoughts on the foundation provided by their CFO experience for future startups.
Transcripts
all right sounds good well um let's see
it's a little bit early
my time um it's uh you know one of those
in between hours at 4am i'm here in
the bay area um so um
but thank you for having me um i met
oscar uh
in shanghai a number of years ago and i
think it's amazing that we stayed in
touch just a little bit and said thank
you for thinking of me and having me
um oscar asked me to speak about sort of
what it means to be a cfo at a startup
he asked me to speak about uh how i went
from from being sort of a cfo to
entrepreneurs so um just wanted to share
a little bit about
um what uh you know how i came to
you know be where i am today um a lot of
it was not necessarily
intentional um but just a little bit
about sort of how i got started
i'm from here in the bay area um uh i
started you know if you go to the left
um i'm chinese american i was born and
raised here
in piedmont california which is where i
live now
um i have uh i put a little icon of like
a violin on there because i was like a
very
um a very sort of typically
uh chinese-american kid i played the
violin i swam
no balls to injure my head right
i studied really hard from a young age
i was going to be a doctor right hence
like little pre-med sign over there i
wasn't pre-med in college i went to
stanford
um and so i kind of you know did
everything the way i was supposed to do
things
um and uh you know was
maybe two classes away from actually
applying to med school but i kind of had
um interests more in political science
and econ
and you know really came around to
thinking well i'm not really sure that i
want to be in med school for
uh in some form really for the next 10
years to be studying and then you know
it's like a very prescribed track
um instead so what i did next is i was
like well you know i'll do a masters in
east asian studies i had a long-standing
interest in
um uh in you know chinese politics
chinese reform and you know
fundamentally how did one
um had a 20 of the population com go
from being
um sort of in the throes of of of you
know many things to being very
um fairly prosperous today right uh
i kind of landed a little bit randomly
into the business world
so um i you know almost by accident got
an internship
with morgan stanley in hong kong all the
way to the right
um ended up joining mckinsey in new york
worked in private equity at kkr
um and had also you know traveled around
the world
worked in you know quite a number of
places um worked for studying quite a
number of places so i was you know very
i've been very fortunate uh and was also
um sort of you know also fairly
conscious about um
being associated with uh you know
institutions right
because that's kind of the way you're
supposed to do it um
and uh and you know i will say that
uh they were you know very good places
sort of be trained
professionally um and then uh so i did
that from when i graduated
up until 2011 and then um
you know i joke that kind of all fell
apart a little bit
right so i took this crazy job in 2011
um where i built a hospital in china
um about three hours away from shanghai
that's how i originally got to know
uh osgar and um we you know had
basically plotted dirt and we built this
500 bed hospital
which is still operating today and that
was really like my first
startup if you will although not
necessarily what you think of when you
think about a startup
is where you think about software and
apps and technology and so on and so
forth
but this is really my first startup and
they asked me to be the cfo
um and uh i didn't really honestly i
didn't really
know what that meant but i feel like at
the time i was like okay well you know i
can probably
go figure it out um and then uh
and you know i talked about that
experience at length but it was
a very very challenging experience and
also a very character-forming
experience and then uh and then the
second startup i did um i was also the
cfo
um i took over um
this company called 21 inc um which was
heavily funded had like a lot of press
about it but was actually
a very very distressed uh company uh
they basically raised too much money had
a huge amount of kind of debt burden
um had a lot of press to kind of live up
to um
and so we took over a company with a
negative 50 million on its balance sheet
in terms
in terms of all its liabilities um with
no working product
no functioning team um and we had to
both get out of all of that um
and we ended up starting an entirely new
company
um in that which earn and then end up uh
selling that to coinface
so um kind of joke that you know these
uh these two sort of experiences a lot
of the time i was like well you know i
don't really
know anything about building a hospital
right i don't really know
anything about bitcoin mining hardware
um
and uh and then starting a company where
you're basically selling you know pay
per email response well i don't think
anyone really knows anything about that
per se um and so
you know what is having what does being
a cfo have to do with any of this
right oh and then now i've started
started a couple of other a non-profit
or for-profit related
to um related pandemic stuff but anyways
so um so for me i've never actually
considered myself
as being a cfo um i kind of fell
into that position um because um you
know here were some of the things that
um you know i've i considered you know
be
my core skill sets um and in
um and then in the you know situations i
was in
um the way that that was the most useful
was
i suppose taking on the role of being a
cfo right and so what are those things
um thinking pragmatically right thinking
in a structured way
um uh being able to solve business
problems
and that's that are sitting in front of
you doing that in an analytical way
um for me i've always seen um a lot of
stuff happen in the business world and
really
you know particularly in the startup
world um is really just being applied
common sense
um in my uh in my view sort of
you know a startup is ultimately a
business
um and a lot of the business principles
that you learn
you know for large companies um is
actually very similar to what gets
applied
with small companies um the bit the the
you know part of the big difference
being um in a large company
obviously things are very established
there's an existing business model on a
small company you're looking for that
looking for product market fit
um but you know a lot of the things that
sort of drive
private uh product market fit and
whether you're gonna be successful
um to me are um it actually can't be
that complicated otherwise it will never
scale right
uh and then you know the other big
difference between working in the very
large institutions that i've
done plenty of um and being in a startup
situation is that you're just willing to
do what it takes
um because startups they all look like
this when you start
right um and so you know if there's an
expectation for existing structure
then um then you know there isn't a
whole lot to stand on so you kind of
sort of got to do the biz tracking
yourself of course
right um so as i kind of went to these
situations the way i end up being
the you know cfo was uh you know i
always
approached uh the the situations and
companies i was working in is sort of
how could i be the most useful
right um and so you know thinking
pragmatically thinking in a structured
way
being analytical um looking at problems
um you know for a cfo um i think
you know one of the conceptions people
have is that um
you're just managing money right you're
doing spreadsheets
crunching numbers and you know there's
like the stereotype there's kind of like
the green eye shade accountant sitting
behind a desk
and like you know doing your uh doing
your numbers right
um so uh so i think that that
perception can exist and comes from the
role that a cfo can typically play in a
larger setting
um but i really thought about it as um
you know a company yes you are to an
extent managing money
um but if your role is to sort of take a
longer perspective think strategically
about resource allocation um because
startups are so risky you're not it's
not so much about
managing money because a lot of times
you don't have very much of it
it's really more about managing risk
right
in managing risk in terms of you know
how you spend
your more important resource which is
actually really time often times than
money
because those two are so interrelated
and in helping your team
kind of figure out all right um what
bets do we want to take in terms of
product um the products that we want to
build the futures that we want to build
where we do want to deploy our limited
capital
um what sort of team members are going
to be making
the most the biggest difference right
and inherent in a lot of that
is thinking about um uh business
strategy
um product market fit um and
uh and so you know that's for me one of
the big differences between
being a cfo in a very structured setting
right
uh which is more about managing money
right and in a startup setting it's
really
uh taking a more holistic approach to
managing risk
and principally not just around how you
spend your money but also how you spend
your time
um so um so you know as a cfo
of a startup you know uh
that might have been my title but you
know like many other people in early
stage business
a big part of the value and my job is
how can i grow the business
right um so thinking about that in a
structured way
right um taking an analytical approach
to that what i mean by that um
being a cfo is an inherently
quantitative role right you're expected
to
you know have a quantitative approach to
resource expenditure
and oftentimes take a look at
not just sort of the dollar and cents
that are coming and going
and you know being paid and received and
those types of things
but also sort of taking a uh an
operational view on that
right looking at the operational sort of
metrics of the business uh
and uh and you're providing that view
in a fairly objective way right because
then and and tell the
tell those facts and tell that story in
a way that sort of everyone can buy
into um and you know i was also reminded
of what peter thiel often times um would
write about which is you know
um what a lot of what makes a lot of
founders sort of
very insightful in their markets is that
you can see those secrets that are
hiding in plain sight
right um and so you know the role of
um being a sort of you know the cfo at
least in my view
um has been not just about the dollars
and cents but also
you know helping reveal those types of
secrets through data through analysis
and it's not um and that applies to the
market that you're in
and sort of uh in bringing that you know
perspective to bear
because ultimately what that does is it
has a big influence on how you allocate
resources
right um and so from my view you know um
all of the uh all of the work that i did
earlier
in my in my in my 20s when i was working
at i'm sorry
large larger companies um for a while
it it didn't sort of become clear to me
how that was actually that useful
um i think you know as the years have
gone on
i've become much more appreciative of
sort of
how all of that how i got started in a
lot of those things
um because at the end of the day
startups you know they are businesses as
well
um they're actually much harder
businesses to run because oftentimes
you're not even really sure what the
business is quite yet right
so you have to keep on thinking um keep
on innovating not just on your product
um but you know sort of the the business
model the same time because you're
trying to find that fit there
um and so you know as you go about that
process
um sort of being able to um have
uh to understand business drivers right
to understand
operationally sort of what makes you
stronger or weaker
being fairly detail oriented and
analytical and that just really sort of
cuts down the cycle time on being able
to test
and test and sort of get feedback on
what you are doing
right um and so you know that approach
is also
uh it also has made me think you know uh
particularly the last couple of years
that um
you know oftentimes there uh in my view
there's these conceptions about you know
oh this is a technical founder this is a
business founder and there's a little
bit of segregation of roles
um in my view you know that doesn't
necessarily have
to be the case right at the end of the
day um there are just certain
um consistencies about what makes
success what makes companies
after you get a product market fit but
then after that you know there's
quite a number of just things that are
true of all well-run businesses
right um and um and having sort of
uh um you know the the
views and like on a business that at
least i got to
have as being the cfo i felt like um
have been
uh very useful um and
also really a foundation of um you know
all of the future startups that i would
be doing in the future
so um yeah so those are some of my
thoughts
um and you can get my contact
information find me on social media but
thank you for having me
thank you very much
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