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From Head Accountant to Financial Storyteller, Carbar on the New Breed of CFO

Iman Ghodosi
VP and Country Manager, Zuora

Mathew Tao describes himself as a “financial storyteller.”

He’s the Chief Financial Officer of Carbar, Australia’s leading car subscription platform, and as few as five years ago he may not have felt comfortable using these words. In 2015, Tao was working as a management consultant at Accenture. One of his jobs was to consult ASX (Australian Security Exchange) company CFOs on global best practices. Says Tao, “We often advised CFOs that a high-performing finance function created added value through developing scalable systems and data analytical capabilities.” This was considered a marked progression from conventional thinking that said a CFO was a company’s head accountant. Traditionally, a CFO took old figures and reported on them; they “kept score” as Zuora CEO Tien Tzuo recently put it. Accenture felt a modern CFO needed to do significantly more than that. But the role of CFO continues to be in a state of flux, and Tao says the advice he would have given half a decade ago would now be only partly relevant. “It’s evolved again,” says Tao. “A CFO is not just looking at historical numbers, looking at cost and systems, but is really being a lot more strategic and that goes to where the world is heading. Businesses are changing rapidly. The environment is shifting and there are different externalities impacting your business.” Tao continues, “It’s important for a CFO to work very closely with the CEO to navigate these changes and be able to think more laterally – and more strategically – on how to support the business to take advantage of certain opportunities and defend against certain risks.”

A CFO is not just looking at historical numbers, looking at cost and systems, but is really being a lot more strategic.

Matthew Tao, CFO Carbar

“I don’t come from an accounting background.”

There’s more to Tao’s role than that, however, and he uses the term “financial storyteller” advisedly. It’s not a throwaway buzzword; it describes a central requirement for so many businesses operating in a constantly evolving environment — especially in the case of those recurring revenue companies that power the Subscription Economy. In the case of Carbar, in fact, they wanted in their CFO a person who could use numbers to tell a compelling narrative more than a traditional accountant. “I don’t come from an accounting background.” says Tao. “When Carbar co-founder, Des Hang, offered me that role, I was a little bit concerned. But from his viewpoint, he was saying ‘Look, accounting is very important and finance is very important, but these are skills that can be hired.’ And that’s what I’ve done. I’ve hired a very experienced team of accountants that can support the technical aspect of the role. What Hang saw as more important was the ability to work within a very unstructured environment, to think strategically, to work on investor relations, to raise money for multiple options where the business could end up.”

A different perspective on value.

Tao says he devotes large portions of a typical month to speaking with team members outside the finance function, as well as customers and potential subscribers. Says Tao, “I spend a lot of time building new processes and new products as they relate to finance. Because subscription is a very finance driven capability at Carbar, we need to have the right billing system and the right invoice management system. I spend a lot of time working with the product and tech team to make sure we have the right systems to support that customer journey.” He says he talks with customers because they are nothing less than central to any subscription company’s success. “Often CFOs are too focused on the bottom line and not focused enough on financial value,” cautions Tao. Speaking to the customer provides a different perspective on how the business provides value, which may not be measurable in dollar terms. As Tao summarizes: “Carbar is a subscription business disrupting the automotive space, which is fundamentally shifting from a traditionally product-driven industry to an experience- and customer-driven industry. Having the customer at heart is directly correlated to our future growth. If we provide a poor experience, our churn increases; if we keep the customer happy, we start building a healthy recurring income.”

Carbar is a subscription business disrupting the automotive space, which is fundamentally shifting from a traditionally product-driven industry to an experience- and customer-driven industry. Having the customer at heart is directly correlated to our future growth.

Matthew Tao, CFO Carbar

Raising capital requires more than financial acumen.

Perhaps where the “soft” skills – like the ability to construct a persuasive story – are most useful, though, is in Tao’s relationship with investors. One of the first tasks he was involved with after starting at Carbar was the company’s Series B capital raise, as part of which they raised more than $16.8 million and brought in IAG as a major investor. “That was a very big milestone for Carbar,” says Tao. It provided us with the financial and corporate backing to really scale the subscription offering. After that – and this goes to why the CFO role is moving towards a generalist and strategic role – we realised that to keep on scaling, Carbar would need to own its assets in order to control the customer experience. That meant buying our own cars.” Tao explains, “Very quickly, we had to go from a capital light approach to a capital heavy approach. So then we needed to understand how to shift our corporate model and our capital structure to support more debt and leverage debt as a cost-effective way to grow our business.”

Watching three metrics like a hawk

While Tao has a distinctly non-traditional focus — on stakeholders, strategy, forecasting and storytelling — numbers still play a critical part in his work. There are three key metrics Carbar keeps a hawk eye on: customer acquisition cost, churn rate and customer lifetime value — all of which are related. 1. Customer acquisition cost (CAC). CAC is about ensuring the service remains so good that marketing becomes less and less important and so the cost of gaining and retaining the attention of subscribers goes down. 2. Churn rate. Churn rate is about keeping an eye on how many people decide to give up their subscription as a proportion of all subscribers. As with customer acquisition cost, if the service remains outstanding, churn rate inevitably remains low and the business thrives. Very low attrition has been a prime reason for Carbar’s phenomenal growth over a relatively brief period of time. The company was established in 2016 and now offers cars in Melbourne, Sydney, and Brisbane. Between June 2019 and the early 2020, it enjoyed a 1000 percent increase in its active pool of subscribers. But when COVID-19 hit, the company assumed that their churn number would simply have to go up. Their best case scenario was a plateau period. They were wrong. Rather than scaring subscribers and potential customers away, Tao says the virus ushered in a new era where digital transactions and service acceptance went from being on the margins – or, at best, seen as a handy alternative to bricks and mortar – to becoming thoroughly mainstream. Carbar has excelled during the pandemic. “We’re managing a no-commitment, ‘cancel anytime’ subscription model. Maintaining flexibility is critical. Instead of focusing on the pandemic panic, we’re focused on our customers, ensuring our pricing is competitive and rewarding customer loyalty.” #3. Customer lifetime value (CLV). CLV is the metric that Tao and the company are most interested in. “We have an approach at Carbar called the Infinite Customer Lifetime Value where we’re constantly talking to our customers to design an experience which we believe is so amazing that the customer will never go back to owning their car again.” It’s a bold claim, but Carbar’s success over the past year alone suggests it’s far from hyperbole. In part, it has a modern, storytelling strategist CFO to thank for that.

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