Zoom boom helps CFO set new ambitions
Feeding Zoom’s 326 per cent revenue growth over the past year has come with big investment decisions for finance chief Kelly Steckelberg as the video-conferencing company aims to cement its position in the future of work
Ripping up the rulebook is a phrase often bandied around in business, but it accurately sums up how Zoom’s chief financial officer (CFO) Kelly Steckelberg has handled the video-calling platform’s meteoric rise.
When revenues rose 326 per cent year on year to £1.87 billion, Steckelberg, who joined the company in 2017 after six years as chief executive of online dating platform Zoosk, had to swiftly move from quarterly financial planning to an unprecedented fortnightly system.
“To give you a little perspective, in December 2019 Zoom had on average ten million daily meeting participants. By April 2020, that had grown to more than 300 million, over 30 times in five months,” reflects Steckelberg from her California home office, speaking, naturally, via Zoom.
This meant ramping up efforts across sales, customer and technical support, and in particular engineering to fulfil the demand for additional bandwidth and capacity in Zoom’s datacentres.
Steckelberg became a driving force in weighing up long-term investments over short-term needs, ultimately decreeing more agile financial decision-making was crucial.
“We were only six weeks into our FY20 [fiscal year 2020] plan and all of a sudden it was outdated. So we adopted a flexible planning process,” says Steckelberg, who was named Forbes’ Public Company CFO of 2020.
“During this time, every two weeks, our teams could come to us with funding requests. Typically, we do that quarterly. But we realised in that period a quarter was a lifetime and we needed to be more responsive.
“We said we could hire as many sales quota-carrying heads as the team asks for. And because we believe in long-term growth, we were willing to hire as many engineers as the organisation asked for during that time, to keep up innovation and development.”
Steckelberg also made resources available for 125,000 school students in 25 countries to be able to use Zoom for free during the pandemic. And she signed off a £71.8-million investment in a new Zoom Apps Fund to grow the ecosystem of collaborative working apps people can use while on the platform.
Marketing spend will also see a boost, to raise awareness of products like Zoom Phone, which allows users to call others directly, like a regular phone call, to overcome so-called “Zoom fatigue”.
The growth-induced spending and hiring spree – more than 500 engineers and hundreds of other customer-oriented roles – has had to be offset, Steckelberg adds, with automating an element of technical support and turning to third parties to bolster its FAQ (frequently asked question) content to “slow down the funnel”.
Moving from conflict to prioritisation
Such momentum will have made for interesting executive meetings, with a CFO at the centre of opposing views on financial decisions. But rather than conflict, Steckelberg views it as “prioritisation”, believing “there are always choices”.
“There can be active debates in our executive staff meetings and we are free to challenge each other. But once we agree on something, we’re all committed to that,” she says.
“I spend a lot of time with our CEO to strategise around long-term investments because we are still in a growth stage and focused on continuing to grow our top line and take market share. Advertising is an important part of our long-term strategy as well to continue building brand awareness.
“We try not to say no to resource requests because there are always options. So, if you want to do this, what does that mean to this area of spending? Those are the discussions I have with my peers. They appreciate when you empower them to help make those decisions, rather than telling them no. The easiest thing is for finance to say no. But that’s not always the best option for the business.”
CFO who was once a CEO
Steckelberg’s approach is driven by the sense of strategic empathy for all business functions she gained from having been a chief executive, which she describes as having been an “amazing experience”.
While also praising this period as a “learning opportunity”, Steckelberg won’t be drawn further into her reasons for returning to her financial heartland – she is an accountant by training – but concedes it has made her a better CFO.
“It’s easy as a CFO to see things only through a financial lens. Having been a CEO has helped me understand better how you have to think forward for longer-term investments to help your business innovate or take market share, even though you might not see return on investments immediately. That was a very different perspective,” she says.
It has also equipped Steckelberg to offer strategic insight to Zoom chief executive Eric Yuan, in line with the changing nature of the CFO’s job, tipped to see more make it to the top role.
“It’s also easier as a CFO to consider yourself an adviser, but not the ultimate decision-maker. The great thing about Zoom is Eric challenges all of us to wear the CEO hat and to challenge each other. He wants to hear all our perspectives and give us the opportunity to weigh in on areas beyond our own functional area of expertise,” she says.
“We have a high degree of trust and transparency, which you need to be able to debate that way. But I do think the expectation of the CFO is evolving across companies in that they are expected to have a more strategic viewpoint, to think differently about helping the company invest and innovate for the long term. That sometimes pushes the comfort zone of a CFO, but it’s an important perspective the CFO needs to take calculated risks.”
Tips for a post-pandemic IPO boom
This mindset is likely to have served Steckelberg well when she led Zoom’s IPO in 2019, which has benefited her personally too, if media reports are anything to go by. Steckelberg’s own net worth is estimated at £24.5 million after selling the majority of her shares in the company to that effect.
It makes good on the old adage of treating company money like it’s your own. If post-pandemic IPO activity is set to be as strong as EY predicts, more CFOs could be following in Steckelberg’s footsteps. What advice, then, does she offer?
“Be clear about why going public is the right thing for your company. What’s the goal of your IPO? When is it the right time for your company? And being very thoughtful about the right approach for your company,” she says.
“Then make sure your organisation is ready, your finance team specifically. Make sure you have the right partners in this project. For me, that was legal. When I got to Zoom, I realised we didn’t have a general counsel. We were fortunate enough to hire someone who, along with Eric, was one of the most important partners for me in that process.
“You also need to make sure you’re prepared for life as a public company. And bring your company along with you. It’s an important accomplishment to be celebrated by the entire company.”
Zoom’s role in the future of work
While the return to offices and the adoption of hybrid working may lessen the reliance on video calling, Steckelberg has faith in Zoom’s ability to thrive post-pandemic and fight off competition. She links back to the confidence she has in the Zoom Apps Fund, citing “really cool developments” by ServiceNow, Dropbox, Asana and even consumer brands like Weight Watchers and Arianna Huffington’s Thrive platform.
“How do you solve the challenge of when you go back to the office, and some people are working in a room together and others are working somewhere else? With Zoom Apps, it’s going to start to feel like you and I could be physically connected in this meeting together. The demand for that is some of the feedback we’ve received during this time while employees have been working remotely,” says Steckelberg.
“We’re really excited about the future of work; we’re never going back to the way it was before.”