Former Netflix CFO Breaks Down Return on Compute | Jim Cook

Jim Cook (0:00)

Once upon a time, there wasn't SaaS Metrics, there wasn't hack, there wasn't LTV.

We gotta start talking about return on compute, ROC, ROC, whatever you wanna talk about. Strategy is simply a set of choices, path choosing, which choice you're going to make and why, and more importantly, which choice you're not going to make. You know what the biggest weakness and the number one thing that helps all other pillars is how to communicate and influence everything else. We need to take all of our strengths and data and learn how to communicate why that data is in court. Too many CFOs, including myself, were not afraid to lead with the facts and the numbers and the reports and the budget versus actual and the why. And here's what I think we should do about it. And a lot of us have this internal imposter syndrome in our head that say, that's not my place, that's the CEO's place. Take that leap, get uncomfortable.

CJ Gustafson (0:51)

Is this thing on?

Yesterday's price is not today's price.

CFOs have spent the last 100 years figuring out how to get more output from people and capital. Well, now we have a new input to worry about, compute. Today on Run the Numbers, I'm joined by Jim Cook. Jim was the founding CFO of Netflix, later CFO of Mozilla. And today coaches CFOs through BenchBoard. So we've seen a few technology shifts up close and personal. And Jim thinks AI is going to force finance teams to rethink some pretty basic questions about how we measure the business. We get into his idea of return on compute. What the hell that actually means? Why your functional leaders need to understand their compute costs just as well as they understand headcount, and how CFOs should think about budgeting when a few enthusiastic employees can suddenly rack up a truly impressive AI bill. We also talk about how the CFO job itself is changing. Jim is a framework for the five dimensions of a modern CFO, and one idea I particularly liked, the best CFOs don't walk into the room armed with numbers. They walk in with a thesis.

Because if AI gives everyone access to more data, more analysis and more answers, having an opinion, damn it, about what it all means becomes considerably more valuable. Here's my conversation with my friend Jim Cook. Jim, welcome back to the Run the Numbers podcast.

Jim Cook (2:22)

Glad to be here, CJ. It's fun.

CJ Gustafson (2:24)

I always get excited when you're coming on because I just leave energized, like getting your world view because you talked to so many CFOs, you've been a multi-time CFO yourself. For the benefit of listeners who maybe haven't listened to all 300 episodes, because you've appeared a couple of times, can you just give the 30-second Jim Cook overview where you've been a finance leader and what you work on now?

Jim Cook (2:46)

Started 30 years ago in Silicon Valley, been in finance, stayed in finance, been an operator, but I was lucky enough to be at companies in the very early days, Intuit, first 100 employees, the only finance hire for the CFO. To be there with a company like Intuit, looking back is like, wow, a lot of lessons learned. Spent five years there, eventually we left. Before I left, we had, you know, we were 3,500 people in five business units.

Did it again with Netflix on the founding team of Netflix, designer of the red envelope, all the logistics. Way back when when we were actually shipping disks, many of your listeners probably don't like, wait, Netflix, envelopes, what is he talking about? You know, Netflix is a different company now, but you know, it's fun to be on the starting edge of these companies. Did it again with Mozilla in 2005, launched Firefox 1.0.

I was called in to help at that point, about, you know, six months after they launched, and we just, you know, caught a tiger by the tail. We owned the market for about four years before Chrome came in, and so we went from like zero revenue to 500 million in revenue, and all the learnings of having to scale a company from basically zero to a brand name company. So now I'm taking all those lessons learned, and I'm paying it forward with, I've got a coaching practice. I'm an author of coachplaybooks.com. I write my newsletter. You and many others inspired me to start writing. So I've started doing that two years ago, and I'm building as I go, and I'm building a new website as we speak, and more to be named later. I'm in the mode of sharing all my best ofs with anybody who wants to hear it.