NPV-Positive Decision Making: Thumbtack CFO Larry Roseman’s Winning Framework

Run the Numbers

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NPV-Positive Decision Making: Thumbtack CFO Larry Roseman’s Winning Framework

CJ Gustafson

Aug 26, 2024

Transcript

In this bucket list interview, CJ speaks with Larry Roseman, the CFO of Thumbtack, who shares his deep understanding of running marketplace businesses at scale. They explore Thumbtack's business model and monetization strategy, discussing the customer acquisition cost for both service providers and homeowners. Larry explains why going broad rather than niche can be fundamental for marketplace success, offering a counterintuitive view to that of many marketplace experts. He also talks about the flywheels Thumbtack has developed over time and the company’s shift towards becoming a proactive operating system for homes instead of a reactive marketplace. Additionally, Larry offers valuable insights on value creation from a CFO's perspective, emphasizing the importance of making NPV-positive decisions and the strategic role of the CFO in guiding big business decisions. Hear about the crises that Larry has seen in his career and his advice to “never waste a good crisis”.

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@cjgustafson222 (CJ)

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TIMESTAMPS:
(00:00) Preview and Intro
(02:31) Sponsor – NetSuite | Maxio
(06:13) How Thumbtack Makes Money
(09:30) Being Broad as the Key to Marketplace Success
(12:31) Charging for the LTV
(13:45) The Evolution of the Marketplace Industry
(16:21) Sponsor – Leapfin | Planful | Mercury
(19:40) Thumbtack’s Two North Stars
(21:31) CAC and LTV: Supplier versus Household
(23:59) Flywheels versus Network Effects
(25:52) Thumbtack’s Evolution: Reactive to Proactive
(29:09) Thumbtack’s North Star Metric
(32:34) Making the Right NPV Positive Decision
(36:43) Helping the C-suite Size Up Big Bets
(39:20) Learnings from Crises
(40:44) Share-Based Compensation
(45:37) Long-Ass Lightning Round: CAC Framework Regrets
(50:33) Finance Software Stack
(51:53) Craziest Expense Story

Discussion about this podcast

Run the Numbers

Run the Numbers is a twice-weekly podcast about financial metrics and business models, designed for ambitious people operating tech startups. It's a collection of things host CJ Gustafson (CFO at Partstech and writer of Mostly Metrics) has learned and thought about in the trenches as a tech CFO.

This show is meant to serve as a playbook of sorts for the stuff CJ wishes he knew earlier in his career, both from experience and from copying people smarter than himself.

Topics frequently touch upon Startup SaaS Metrics, Annual Budgeting, Financial Forecasting, Headcount, Equity, Dilution, and Fundraising – and how all of these drive business performance and growth.

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