CFO Perspectives: CFOs of Tesla, Levi Strauss, & Visa - TiE Inflect 2018 Grand Keynote

good morning everyone I'm gonna have my panelists come up here and you have to guess who's at visa who's at Tesla and who's at Levi's okay so we'll figure it out so last time I was here some of you might remember I was interviewing or rather drilling Preet Bharara on stage couple years ago so compared to that this is a piece of cake today so we have three amazing CFOs and when we discuss the session I said we've got to get non-technical folks into the tie fold and what better than to have three great CFOs from three amazing companies we had a half hour meet right before this one of them was trying to sell me a new pair of jeans another one wanted to sell me a Tesla and the third one was giving me a free debit card so gosh you guys are pretty good salesman too so I want to start off the session by asking the three panelists of course we have next to me his Vasant Prabhu with visa hard made Singh with Levi's and Deepak Ahuja with Tesla I just want to say just hear their journey a little bit how did they become a CFO it's very different than all of you in the room primarily who are entrepreneurs and tech folks you know maybe they can spend a minute each just talking about how did they get to be a CFO Deepak Muslim I'd say I'm an accidental CFO started with the typical Indian career of either choosing between medicine and engineering landed up with engineering came to the u.s. worked as an engineer for several years and accidentally did an MBA and switch to finance and and before I knew it had I had sufficient experience in different parts of the business and operations that set me up well to take on a CFO role so accidentally Here I am [Laughter] hired me yeah so you know I I educated myself in India and I think it was in grade 10 you've got to focus your career between science and commerce you know you got to decide that early so I decided I'll take Commerce and did my Chartered Accountancy from India and then you know started working in different companies and not realizing that or it didn't have the ambitious ambition to be a CFO but my career went down the finance part and you know I worked for great brands like American Express Pepsi Hyatt and now Levi's and I probably became CFO of the first division about 20 years ago and you know since then been lucky enough to be here for some large great corporations around the u.s. thanks for me Watson yeah I'm also engineer who lost his way like you a dark side yeah exactly store yeah I was an engineer but I knew when I was an engineer that I like business better than engineering so I did not practice as an engineer even for a single day but then I wasn't a CFO either I have no background in accounting or finance and somewhere along the way somebody took a risk on me which was a very big risk and put me in a CFO job and that's what I ended up doing and I must say most finance people don't take this route they actually qualified finance people so hopefully this is not broadcast because these are secrets so I promised one of the CFOs here we wouldn't talk about fluffer bots okay no no fluffer BOTS today but we will keep on track here so one of the things that would be nice too for the audience to understand is what is the computing environment what's the digital strategy of these three great brands that you guys represent so maybe it wasn't you can talk I know you already been a digital company right from day one but what is the environment looked like yeah I mean if you think about visa Viva digital before the word digital was even fashionable so for those of you who don't know these are actually a barrier company from over 60 years ago that started digitizing cash started in Stockton California actually and we've been digitizing cash ever since and in the early days it used to be called electronic not digital and so we were electronic payments now we're digital payments and and along the way of course there's been a massive transformation and today is probably the most exciting time even in our 60-year history because it has become so much easier and cheaper to digitize cash all the way from if you might remember people used to take an impression of your card to swiping a card to dipping a car to tapping a card and then ecommerce comes in and without someone like us you couldn't do ecommerce as you know if you didn't have a way to pay digitally and today I mean it's just an extraordinary time because every smart device is a way to pay or be paid so our job right now is to find every which way people are coming up to be paid and pay and find a way to get them on our network because you know we have if we think the most secure the most reliable and the one that goes to the most places yeah I have a new product idea for you just implant a chip in every boy and it's coming boards yeah yeah well now I mean it that's the next thing coming is it's true I mean we already if you are at the Winter Olympics in Seoul for example it was totally totally contactless people were using rings you know everybody was given something or the other that they could use to pay it was in gloves so that day is coming and we would love to implant a chip in everybody walk through every payment I'll I I know hard meat you've already done this with clothing right yeah the so you know digital transformation is actually changing the way and disrupting the retail world big time so as we think about in you know being with Levi's which is 160 year old company we actually call it 150 year old startup because we are really thinking about this very differently it starts with technology innovation and actually our products as you said I'm wearing you know trucker jacket called jacquard we launched this in partnership with Google it actually has technology worn into the fabric you know so I can for example ask you know I can access time I can access music but just a flip of a hand or directions so that's one piece a piece of it the second is we have just announced the introduction or use through software which is patented by us and developed by us where we can use lasers to finish our product and basically what it does is instead of you know a gene or a pen being finished in 20 minutes laser can do it in 90 seconds and so that's something we're pioneering in the field of technology so that's the product side because we think that's important it's also MRI I know you're a big believer of sustainability this is a big drive for us because we're getting rid of thousands of chemicals to a few so that's one piece of it the second piece is you know which is close to my heart which is the the automation of you know our processes you know for that we are introducing bots whether it's in the finance world whether it is in the in the world of transactions in you know whether it's customer service or or data centers we really taking that on and the last piece is data mining really that's where we you know we have a lot of data you know being around for such a long time like in the inverse and so the question is how do you use the data or you mind the data and that's something we're really working on and we actually partnering with a few startups that that's the capability we don't necessarily have in our DNA my CIOs here you know he and I are kind of working through that with the organization so a lot of work in terms of how we are looking at the digital space and how do you leverage that to actually make it a competitive advantage so Deepak I know in your case you've written software you partner with companies what what is the IT and digital environment look like yeah for us these systems and applications underlying every aspect of our business we look at them as a core strategy to enable our broader vision of accelerating the world's transition to sustainable energy and we look at all of these with a force principles perspective to see whether they are going to enable us to interact with our customers in a very different manner compared to the other companies and so we spend a lot of bandwidth a lot of time in developing the right applications that enable us to succeed in that vision so that's one aspect and the other aspect is we are growing historically at about 70 to 80 percent annual top-line revenue increase and so our business is healing extremely fast we simply can't hire people at that linear rate to grow with the business which means that we are and I personally end up spending a lot of time at transforming our processes simplifying automating coming up with new applications that enable us to go on this full digital journey right from the point a customer interacts through all the ripple effect of systems manufacturing engineering supply chain financial so that we have a scalable business at the end of the day great so let's move to one of the hot topics at this conference which is artificial intelligence so can can you talk a little bit in more tale about how AI is being used in your companies I know at least every time I go to a foreign country and I use my card it gets a fraud detection message shows up so I mean what about you maybe it's me but what what are the kinds of usage of AI and your companies looked like yeah you hit on one I mean the most obvious use is to reduce fraud I mean clearly the use of data so within milliseconds decisions have to be made about whether that transaction is a fraudulent transaction or a good transaction and so we use a lot of data and AI to make those kinds of decisions and accept or not accept a corollary to that is the nuisance as you know if you go somewhere and you're legitimate it's a legitimate transaction if it's rejected you're very upset so we have to reduce the rate at which there are false negatives in other words it's Ammar obviously MRR should be trusted he shouldn't be rejected at any time 100% of his transaction should go through there again you know there's a lot of technology we're using and it's getting better every day to reduce the false negatives and then beyond that is I think the new revolution coming where you use data for authentication so today as you know you don't want any friction in the transaction where you have to put in a password or any other way to identify yourself over time hopefully you'll get to a point where we can do it behind the scenes where we don't need you to authenticate in any way whether it's biometric or otherwise but those are some of the big applications then there's many other applications we work with merchants to help them target and then of course in our behind the scenes in our back office systems we're starting to explore you know AI bots for improving our controls and you know auditing and those kinds of things so it's all over the place yeah in our case we started again I think as both Deepak and wasn't have said it's across the chain starting with the consumer you know we've just a lot of the consumers that most of you here first go to go online and check out you know different products in apparel so we've introduced virtual stylists where you interact with the Machine and you know using AI and bots you're able to you explain what can be styled for you what's the best you know what makes you look great the second piece is again I talked about the flx project which is using the layers layers we're using AI to optimize the different kind of fits and finishes and probably that's how I get you into a pair of jeans at some stage mr so that's in the front end and then in the back hand using the data we're using a I'd really mind the data whether it is you using it for cybersecurity defense both proactively or reactively whether it is really thinking through efficiencies and supply chain management whether it is thinking through what you take to market and obviously I you know there are the bots which we're introducing to try and basically take over what I call grunt transactional work and get the workforce to focus on you know more value-added work which is analysis etc etc so that's how we're thinking through it we haven't cracked it you know let me be honest with you guys but we're on the journey and I think it's here to stay great how about you Deepak I know fluffer bots is one of the bots you guys have developed but anything else well I think what wasn't ever made is described here is completely relevant for Tesla to in terms of both cyber security and fraud aspects as well as automation in all the various downstream systems I think for Tesla the other unique piece is the the use of intensive AI and autopilot and in autonomous driving there's clearly a lot of machine learning there a lot of neural net capabilities required with the amount of data that's coming and how do you try and learn from it as soon as you can a lot of image processing that happens with it so clearly in so many parts of our business ai is integral to our future success so let's move on to the other hot topic here is crypto so questions I know you might be able to supply cryptocurrency of a cent but can I buy a pair of jeans or a Tesla using Bitcoin or anything like that no I'm you can't today and to be honest we're not leading the thinking there we're gonna be the follower so we're waiting for folks to think about but we're thinking about things like blockchain and we can talk about that separately because I think that's more relevant right now yeah I'd say the same thing for us for me blockchain seems to have a lot of promise and it feels like it's a it's a new kind of a paintbrush to to create a new painting and it's a tool we need to learn and over time and create some beautiful paintings but it'll take us a little bit of time with a lot of promise Vasanth about crypto is this how do you guys view cryptocurrencies well when you when you use the word currency right it stands for something it either has to be a medium of exchange or a store of value so there are some practical technological problems that maybe people here are solving which is the speed is not fast enough so you know paying with cash or a card happens in milliseconds and today the technology cannot process a crypto transaction with that kind of speed so speed is a real issue and the second is is just the cost right I mean it costs probably a hundred times as much for a crypto transaction then a typical let's say visa transaction and it is very energy intensive so those are technological problems that have to be solved which may be solved someday then you have the practical problem that you will have our meat will have is let's say he has a website that says it's you know fifty dollars in dollars and X amount in crypto if the currency is very volatile how does he price in crypto does he change his prices by the second and if you're a buyer if you bought a pair of jeans in the morning and in the evening the conversion to dollars was twenty percent different how would you feel about it so I mean you've got the whole volatility question the store of value thing is a whole different argument you know that's a that's another potential sort of approach to it and that's a that's where you're trying to replace you know bold as an alternative and all that and you can talk about that for a long time so I think I think there's it has to be tested through you know various crises before you really know whether it can function as a currency great let's move on to blockchain because there was a startling survey that came out yesterday from Gartner group it said they interviewed I think surveyed three thousand CIOs and they said one percent of them have actually implemented some blockchain application it also said at the same time 77 percent of CIOs couldn't find an application to implement so it seems like blockchain seems to be way ahead of its time so maybe we can spend some time exploring the use cases for blockchain within your enterprises you know what do you see the applications are you doing blockchain kind of work in the company army sure I mean you know I've two folks here who work for Levi's we're actually pioneering in this Chris Clark I see I will put in to me and then Pavan who is our head of global business services reporting in to me so you know with the two folks here and with members of the executive team what we're really thinking about the two applications one is unsustainability we're big their company that you know deeply believes in doing the right thing for the environment and you know as we think about blockchain one of the applications we thinking about is tracking the fibers that you in our products and from a sustainable lens so that's the first piece the second is you know GBS is Israeli looking after all the back of the house transactions in finance IT and customer service that power looks at what we're thinking of the application there is how do you track transactions especially with the focus on third party windows because we have a lot of third party vendors and the question is just understanding the chain whether it's a purchase order its invoice or a goods receipt how do you really use blockchain so again you know we're probably in the 1% as in the survey but I think in terms of knowledge we're probably a little higher and then what you talked about it's a very infancy stage and so folks here if they have any insights and learnings we you know we'd love to understand that and see how to take this forward I mean from my point of view the attributes that blockchain technology offers are first it's secure and reduces loss and secondly it's a single source of data that contains all the information you need on that transaction so I clearly see a couple of high potential applications in the long term the first is our interaction with our suppliers the the invoices that we get the request for payments that we get can be super secure and avoids the issue of fraud and there is a lot of fraud in that area and so and not only do you then have incoming information which is secure but then you're able to pay your vendors in a secured manner so you may use real currencies you may use your US dollars or any other currency but you're doing it using blockchain technology to keep that transaction absolutely secure and you know it's going to the right right party rather than to a fraudulent person at the other end or an entity so I think that's one major application and then the second piece is in the accounting world I think it truly enables us to simplify how accounting is done and really create error proof and single source of full information transacted transacted in one location little so I think I want to come to you now because one of the downsides of traditional blockchain technology is it's compute-intensive you have to keep copies of the ledger and so on and so forth and so many locations so the ideal thing would be to use less compute intensive ways to do blockchain any thoughts on how you guys are looking at that because the milliseconds is one and compute powers have something right yeah we've been very interested in blockchain I mean blockchain is where we really think there's a lot of value and we've been looking at it for a very long time I mean at visa we do a hundred billion transactions a year so clearly for those really 100 billion yeah so for those that application you know you can't do it but then there's a if you have a if you have high value lower volume transactions like what you said then it's much more applicable and we call Mina we refer to it more as distributed ledger technology and we actually have a product today that is doing exactly what deepak said which is getting a lot of interest it's in pilot stage which is to do business-to-business payments cross-border so it's exactly what you said it offers much greater security more immediacy because existing methods are less secure and they take a long time so those kinds of applications are going to be I think the initial commercialized applications of blockchain where the the volume of the transactions you don't you don't need the same high volume but the value is high so the cost and the speed issues are not a problem great so let's move on to other aspects of innovation I know that's a big thing for the attendees here is how do companies like visa Tesla Levi's how do you guys work with startups because a whole bunch of them care so what is the mechanism within your companies how do you view the white spaces where you build versus areas you buy stuff who wants to start on that discussion Deepak Tesla we as I started well we look at software applications as a core competency which means that our our inclination is that in most cases we tend to build these applications in-house and the fundamental reason for that is we believe it gives us long term agility in adapting our systems to are continually changing needs and our scaling of the business rather than relying on a third party having said that clearly there are many software applications where you need third party input and third party applications whether it's on the Infosys info SEC side whether it's some of the AI aspects and also in my mind the the biggest value add is in some really specialized knowledge that that software provides whether it's engineering capabilities manufacturing or financial it's not just a software that's written smartly or or or or has an application which sometimes combines different points of view to give a bigger perspective I feel we tend to believe that standardized tools are a better solution often than very specific applications but clearly we are continuing to work with startups in specific areas where we feel they bring incredible value so yeah those conversations continue from our perspective we view technology as a key competitive enabler to getting our products in the marketplace we're not a development traditional technology development workshop or a company that has a lot of developers we believe that we need to leverage the enterprise which is what's happening around us where we think about building versus leveraging others and you know I'm a big believer of using third-party resources whether it's intelligence with its capability where there's dollars so for us what's proprietary is core to our DNA so for example in FLX we have patented the software that actually helps you know Drive you know the lasers into a certain finish but in other cases like the e-commerce example where we have a virtual stylus we're we're partnered with a start-up we partnered with Google for the jacquard jacket where technology was woven in the fabric we are partnering with some you know startups on the AI and and then we've got an outsource partners helping us with BOTS so again our whole concept is what's propriety we we like to keep inside what we can leverage from third parties I think you know it's role of partnerships lay so it's important right to leverage their Mattson I think with large companies you know if you're a startup you have a better opportunity if you are selling something where the company itself wants to be on the cutting edge or innovate so for example at visa if you have a new way to pay or to accept payments we talk to lots of companies we want to get to you you know very fast and find a way to work with you so that we can help you do you're trying to do similarly if it's cybersecurity where you know we clearly want to be you know on the cutting edge we work with lots of startups I think then if you go to companies like us where we are not that interested in innovating or we want just stability and you know we're not really looking for you know a lot of cutting-edge stuff it's a little harder sell I think so you I think you have to find where the company is trying to innovate and really you know differentiate itself you have a better opportunity there i think mr i mean my advice to the folks in the room as they deal with at least companies like mine a couple of things one know our business i think it's critical that you know our business the second is you know the solution is to be pragmatic and workable so there has to be a use case that says we have done it in the past here are the results and you know i'm speaking for my fellow CFO's what we look at is clear value either both in the short term as well as in long term and you know i think that makes it because driving a competitor advantage i think is important so how do you really think through that well perfect in person if you think about it differently but so we're going to come to a close pretty soon so any closing thoughts for entrepreneurs and founders in the audience terms of your words of wisdom in the financial space in the financial space i guess it's a pretty broad question what I would say is that I mean clearly my background has not been in the early stage startup and there are a lot of amazing venture capitalists and entrepreneurs sitting here who can give more advice there but the only advice perhaps I can give is what's the right time to go public and what do you go beer do beyond that in that four different companies I would say there are different reasons for going public access to capital if it is not easily available in the private investment world is in my mind the major reason why companies should go public it's not really to to create to monetize the investment that people have made there are many other ways to sell a company or or have one is just talking to her meat how well as a private company your and your employees and investors can still see growth in their value without being a public company and so there are lot of benefits to that and one has to be very clear about the reasons of when you go public or why and if you don't if you're not clear about it and it's just about being you know that's a really sexy thing to do or it's very public thing to do that's sometimes not a good enough reason so having that clarity is super important yeah I mean I think the you know being a company has been around for 160 years we all have legacy systems and it's good and bad okay the good is you you have an environment that you've grown up with the bad is it's not keeping pace with whatever is happening in terms of innovation around around you and the question is how can you help us leverage the the transformation that's happening in terms of technology without causing me to build interfaces with my wonderful legacy systems which are expensive you know so I think that's the thing that I would you know as you guys think about and the lots of us you know who come from legacy environments I think it's a great time to be an entrepreneur because unlike 20 ago I think every company is worried about disruption so the complacency is gone mr and i are old enough to remember a phrase that was common maybe 20 or 25 years ago called you never got fired for buying Ibn remember that yes that anymore because that was like playing safe today I think companies are are worried enough that they are much more willing to try new things than they were you know 20 years ago so I think it's a great time to be an entrepreneur doors are more open than they were right people are not as risk-averse and large companies as they used to be great well I think we can go on and on with these three gentlemen but I hope you got a glimpse of the fascinating lives and trials and tribulations of three CFOs I'm really grateful to have all of them as members of our in diaspora community as well so warm round of applause for three of you [Applause] you

Channel: TiE Silicon Valley

Views: 18,757

Rating: 4.8518519 out of 5

Keywords: tiecon, entrepreneurship, tech, technology, ideas, silicon, valley, startups, leadership, networking, computing, founder, economy, global, entrepreneurs, tie, youth, social, trending, technologies, Deepak Ahuja, Harmit Singh, Vasant Prabhu, TiEInflect, TiE Inflect 2018, TiEeco, CFO, EVP, Tesla, Levi Strauss, Visa, Sand Hill Group, M.R. Rangaswami

Id: RzLKV8EvPSk

Length: 34min 7sec (2047 seconds)

Published: Fri May 11 2018

Reddit Comments

[u/VoIPGuy]

I would think he's describing a problem where a bad actor that is not a supplier send invoices that look like something Tesla might have ordered and hopes to get paid.

I mean larger companies have an incredible number of vendors so it's not trivial to keep track of who they legitimately made purchases from. This is why they have entire accounts payable departments to try to sort things out and match up invoices with POs, check contractor lists, etc.

[u/MasterK999]

I once had an invoice rejected from a large corporation because they showed the PO as being paid. I was able to reach my contact and it turned out that an insider was feeding PO numbers to someone as they were issued so they could invoice against approved PO's before the actual vendor.

I never found out if they caught who was doing it but they wound up moving to a two step process where an invoice had to be approved by the employee who requested the PO. It slowed down payment by a week but it seemed to solve the problem.

This company also had very lax policies in other areas though. I once heard that they lost a half million dollar shipment because of a stupid truck driver. Someone ordered a ton of material and requested it be sent to an industrial park address. Everything looked OK on paper and the credit check was fine so the shipment goes out. The truck driver shows up to the address and it is an industrial park but instead of off-loading into the building they back another semi up to the delivery truck and move the load over. They gave the driver some stupid reason and he allowed it without calling anyone. They never found the product or who did it and were out the money. They called in the FBI and nothing ever came of it.

So yea, as companies get larger assholes find all sorts of different ways to steal from them.

[u/M3FanOZ]

My guess would be employees at either end or outside parties, creating false invoices or modifying invoices...

It isn't something senior management at any company would be doing... but whether invoices are paper based or electronic there is the potential for fake or spam invoice to be created ....

Even consumers get fairly convincing fake spam invoices from time-to-time....

Tesla probably has a system to matches invoices against orders, and they probably catch most of the fakes, that is how they would know about them.

[u/dzcFrench]

Because the people who receive the merchandise are not the same people who receive the invoice, and the people who send the merchandise are not the same people who send the invoice.

[u/dayaz36]

Starts at 20:53. Link should go directly to time stamp but it’s apparently not working on mobile