Ada Johnson: Startup Finance Leadership & Career Advice
Ada Johnson is the VP of Finance at Heap, a fast-growing product analytics company based in San Francisco. Ada has spent nearly 10 years in finance at Silicon Valley tech companies, and has a special appreciation for the dynamic, cross-functional nature of the startup world. We met with Ada to get her thoughts on being a collaborative leader, adapting to new challenges, the power of storytelling in finance, and much more.
Let’s start with a little bit about you — your background, where you're from, how you ended up in finance…
I've always been very analytical. My mom's a math professor and my dad's an engineer, so I grew up with that influence. But I've always been super social. So I felt that finance was a good in between, where you can still be analytical, but bring in more of a social business aspect to it. I went to university at USC and then chose finance, because I had talked to some people and they thought that that was a good fit for me.
Most undergrads kind of get pressured to do investment banking. I think a lot of finance majors feel they need to do that for two years after college, but I really didn't appreciate the lifestyle. I know it's changed since then, but it was very male dominated, and very late nights - I just didn't really want that. So that's why I decided to go more into corporate finance.
And recently you decided to get an MBA. What's been valuable about the MBA program and experience?
I'm doing the part time MBA at Berkeley, which is one of the best part-time MBAs in the US because it's the exact same as full time- electives are even with full time students.
The MBA has been really interesting to get different people's perspectives. Being at a startup, I kind of forget what a big company is like. So it’s good to bounce ideas off of people at different companies and understand their challenges.
And Berkeley has some really great professors, so some of the networks I've made have been more on the professor side than the student side. They can offer connections to students they've had in the past, which has been really helpful.
One of my long term goals is to be a professor. Again, I love finance and efficiency, but I also love mentoring. I actually like public speaking - not a lot of people do. And all the professors I learned the most from are the ones who had experience, so I’m doing the MBA to eventually teach.
You’re currently the VP Finance at Heap. Can you tell us more about the company?
Heap is a product analytics tool. Heap helps Product Managers understand their users, make data-driven decisions, and craft delightful digital experiences. We work with companies in all industries including retail, financial services, and other software companies. Heap is the only tool that automatically captures all user data. So our users are able to explore all data and get insights quickly!
We want product management to be rooted in as much data as possible. This helps them make the best possible products by understanding the data, versus just guessing.
I've been at the company three years. We were about 40 people when I joined - Series B. And now we're about 170 and just did a Series C last year. So we're still in growth stage.
Do you think of yourself as a “startup finance leader?” Are there specific skills you need at a startup versus a more traditional company?
I’ve never been at a non-tech company. The thing I like about tech is that there are fast changes, and more people are open to collaboration compared with some other companies where it's much more siloed.
I'd never want to be a finance leader that's saying “no." I want to always be able to say ”yes, and…” And I think in tech companies people are just more open to that. But I do think finance skills are transferable - numbers are numbers. Obviously you want to understand the business and what goes into those numbers. But being able to collaborate, being a partner and asking the right questions is really important from a finance leader. And in tech it's just slightly more the cultural norm.
Do you find that it's especially hard in the current crisis to be the type of finance leader that can say “yes, and?”
I think it's all about communication. Previously when we were doing All Hands, we would communicate about how our product and revenue were doing. But now it's much more about cash.
I think I always like to have people understand the “why” behind something. So when a salesperson is trying to figure out if they should give a discount or give quarterly payments, in their mind they can also consider how that will affect Heap, because they've heard it in an All Hands. So I think that's been important in this time period.
At Heap you've been involved with legal, HR, recruiting. Do you feel that's the direction that most finance leadership roles will be going in the future - more collaborative?
I think it really depends on the company. I talked to a lot of founders at Series A, B companies that are trying to figure out their first finance hire and what that person should look like. Should it be a CPA? Should it be someone more strategic? And I think it really depends on the rest of the people at the company and what their skill sets are.
I think Legal can be rolled into finance for a pretty long time. I think they're really closely related, especially in tech where a lot of the legal we do is customer contracts. So the economics of that goes through finance.
HR is an interesting one. Previously the head of HR would often roll into the CFO; that was common maybe 10, 15, 20 years ago. Now I think the Head of People is rolling up into the CEO, because people are maybe ~80% of costs at a SaaS company. And so that role has become more strategic.
I managed the HR team for about a year and a half. We just hired a VP of People and it’s been great to learn from her. We wanted our HR leader to be operationally minded and metrics-oriented. If you find a finance person that has the more emotional side and is able to understand people, plus they have that operational sense, then Finance + HR could be married pretty well.
What are some of the most challenging and rewarding aspects of your role?
I think the challenging part can also be rewarding sometimes: it's that you have to do both depth and breadth. So, a really detailed example is: I'm still doing commissions. We have a commissions tool, but I'm the one who still processes that, because of bandwidth. So I might be doing that one hour, and then the next hour I'm sitting with the leadership team trying to figure out product strategy.
So I think being able to brain-switch can be pretty challenging. Also knowing when you should get in the weeds and ask questions versus trying to keep it high-level.
But at the same time, I like that. I think it would be hard to step away and not have a hand in certain things. I'm an operator, so I want to be able to get things done. The rewarding part is being able to put processes in place and see them go through. Being able to iterate and have that ownership is really nice at this size of a company. Once you get larger, it just gets difficult to see the effects of the things you're doing.
Let’s talk about the current crisis we’re in. As a SaaS finance leader, have you learned any important lessons over the past few months?
At first I think everyone was doing tons of sensitivity analysis, and lots of scenario planning. But we don't know where it's going to go, so it's hard to really pick a scenario you believe in.
It’s been great to learn from our COO who has been through some downturns. Something that’s worked well for us is leading indicators. So there's 10 key metrics and some of them are more green than others. We look at those on a weekly basis and are really clear on when we need to make a decision.
Compared to my previous company, Heap has overall been pretty frugal. But now there's a stronger lens on cash and spending, and that actually makes it easier from a finance perspective because people care more about it. So that's been a benefit.
We've also been talking to our board a lot more than we normally do because they're seeing the rest of their companies and what the ecosystem is like. So getting their perspective has been really great in these times.
Is there anything in your perspective that has changed permanently, that will stick with you moving forward?
I was known for running to meetings all the time and just trying to say quick hellos. But now if people are home all day, I’m being really cognizant about checking in, making sure they're okay, making sure they have an outlet, and telling them about myself a little more. And so I think that'll stick with me - having time for that personal connection.
And then from more of a finance perspective, there’s communication. Communicating the whole picture will continue to be important. And I think it’s important especially as companies get bigger. When you're public you care about earnings per share. So now we start thinking metrics like that earlier on.
What tools are essential for modern finance teams?
I was told early in my career: don't implement a tool until the last possible moment on the FP&A side. Because your business model changes, it's just going to get clunky, and you're going to want to do it in Excel. But now there are a lot more agile softwares that will help FP&A earlier and be more flexible. So I think that's an interesting trend - but I am still using Excel and Google Sheets.
On the accounting side, I think it’s more important now to get a comprehensive view of everything and give people more visibility. Right now we use bill.com, Netsuite, and Expensify. But if someone's managing a budget I can't just give them one tool. I need to summarize it myself.
I’d like to combine everything so they have that visibility and are able to see credit card versus expense reports. But you need bandwidth to be able to switch tools.
I think that's something else - accountants hate change sometimes. And so there's all these great tools, but it takes time and energy and effort. And I think switching can be really difficult sometimes for a finance team.
What’s the best advice you've been given in your career?
I remember after a year of working at my first company I got good reviews. And the feedback was, “you just need to ask more questions to understand the business.”
So that has been the advice I've taken with me as a finance leader. If something doesn't make sense to me I'll ask, even if it's not necessarily finance related. The companies I've been at, I haven’t always understood the industry or product initially. So, being able to feel comfortable asking questions of anyone is really important for a finance leader.
This one is really tactical, but I tell all the people I manage this: If someone gives you a request, ask when they need it and what they want it to look like. It’s a way to get alignment on what your deliverables are so you don't spin your wheels.
Are there any resources, like books, podcasts, you’d recommend? Anything you’re inspired by?
One of the classes I took last semester was called “People Analytics”, and the book for the class was called Storytelling With Data. And I think that's a good book for finance leaders, because earlier in your career it's really easy to show a P&L or just show numbers, but how do you actually tell stories? That's something I'm always working on. Who's my audience and how do I tell the right story?
From a leadership perspective, I’ve recently read Multipliers and Crucial Conversations which were both great.
For podcasts, I really like Freakonomics. I think that's kind of my time not to think about finance and work. And I try to expand my mindset with things that aren't necessarily in finance. I really like Masters of Scale with Reid Hoffman, and How I Built This.
What's also been really interesting with everything going on is the communities I’m a part of are so much more vibrant. Like CFO Connect, and there are some others like Operators Guide that I'm in. I think now, people want help and want to communicate and collaborate.
What do you do in your free time, or what would you be doing if you didn't work in finance?
My husband and I used to travel a lot, and I really miss that. And school has been a lot of my free time. It is fun for me, meeting new people, taking classes - I love being a life-long learner.
What I would be doing if I wasn't in finance? This is super random, but I think about being a mayor of a small, medium sized town. Like I said, I like public speaking, and I like being operational. Budget deficits really bother me. I don't want to be in politics, I’d just want to manage a city really well. I don't even know how I would get into that, but that's always been something that's been intriguing to me.
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