10 questions for EdgeCast CFO Mike Kleiman
- 16 April, 2012 22:00
Name: Mike Kleiman
Time with company: about 3.5 years
Education: bachelor of science in accounting from Montana State University and an executive MBA from Tulane University
Company headquarters: Santa Monica, California
Countries of operation: U.S., with some employees and consultants in Europe and Asia as well
Number of employees total: 170
Number of employees the CFO oversees: eight on finance, with more who report through him
CFO's areas of responsibility: CFO/COO, with responsibility for finance, HR, recruiting, IT, data-center operations, and involvement with the network infrastructure side, a big part of purchasing, and split responsibilities with the CEO for legal
About the company: Founded in 2006, EdgeCast offers a content delivery network that has been consistently rated as one of the world's fastest.
1. Where did you start in finance and what experiences led you to the job you have today?
I spent the first seven years as a CPA working for Arthur Andersen, focused in audit and consulting. It gave me great exposure to multiple industries and work environments serving a huge variety of clients. For someone who didn't really know what he wanted to do when he grew up, it was an excellent experience. I learned that I really enjoy the informal, faster pace of the young, high-growth, entrepreneurial companies. So I focused on serving these kind of companies at Andersen, helping them with their IPO filings, funding initiatives, audits, even operational consulting projects. I was with them for seven years -- it seems like that time just flew by.
My favorite client was a sporting goods company, Scott USA, based in Sun Valley, Idaho, which was a great place to hang out, and they also had a sizeable European operation. We were helping them file an IPO, but it failed due to weaknesses in its financial systems in Europe. That turned out to be a great opportunity for me because it ultimately led them to hire and move me to Switzerland to help fix it.
It was supposed to be one of these two- or three-year gigs, where we put systems in place and streamlined processes. It was a very challenging, but fantastic, learning experience that really stretched and forced me to grow up fast. I spent nearly five years living in Europe and we did some awesome work, deploying an SAP system across multiple companies, learning tons about international operations, restructuring the company, currency trading, M&A, integrations, learning to speak German. I went back to Europe recently and I actually still remembered how to speak it, even though I hadn't used it in quite a few years, so that was really cool.
We bought a ski company in Austria and I had to spend the better part of a year driving back and forth to implement that. It was also a very fast-paced, dynamic environment with amazing people. I felt like our efforts added enormous value to the business and it was very rewarding.
My role there wasn't just finance, it grew into finance and operations. I was basically COO of the European operation and heavily involved with the IT infrastructure. Our IT initiatives ultimately led me to the next frontier, which at the time was the nascent Internet infrastructure space as we were beginning to leverage the Internet in developing a wide area network for Scott. I wanted to get back to the States to explore this thing called the Internet. This move ultimately led me to EdgeCast several years later, after I went to work with Micron PC. We were taking Micron out of the PC world and into the Web services world. That led to a division within Micron that I effectively became CFO/COO of, and they said "go forth and buy other companies." That was an interesting challenge.
We bought a company called HostPro whose founders left and went on to found EdgeCast. We stayed friends and we said if the opportunity ever comes up, let's work together again, and that's what happened. They ultimately brought me down to L.A. to help them start EdgeCast.
2. Who was an influential boss for you and what lessons did they teach you about management and leadership?
Great question -- I've had a lot of influential bosses and I hope to someday have even more. One that comes to mind would be Brad Grover, who was my boss at Scott when I moved to Europe. He was very helpful on a couple of critical fronts. The first was making the transition from the outside world of consulting to the inside world of actually running a company. It was a far more challenging transition than I imagined -- from observing and advising to actually doing. He was an excellent leader by example, watching him try things and sometimes fail, but most the time being successful. I learned through that experience that having the courage to jump in, knowing that you will make some mistakes, but that you will recover and learn from them is paramount. He was also very helpful in dealing with all of the issues of expatriating and living to a foreign country. Most people and companies underestimate this. At the time, the overwhelming majority of expat arrangements, something like 80 percent, were failures, but we didn't fail. We were successful and I owe a lot of that to Brad.
The experience of working with Brad led me early on in my career to believe that leadership by examples is the most effective for me. The value of taking ownership and personal responsibility to the next level and to do so in a very hands-on fashion has always been my style, and I believe in it to this day.
3. What are the biggest challenges facing CFOs today?
In a fast-paced tech startup with limited resources, the CFO's biggest challenge, and the reason I love this kind of environment, is probably the great breadth of responsibilities often demanded by the role. The job extends well beyond traditional financial functions of a CFO, simply because the company can't yet afford to fully staff all functions. So, very often the CFO gets sucked into leading operations, IT, pricing decisions, sales, legal, purchasing, currency trading, facilities, logistics, recruiting, making sure the office restroom has toilet paper -- just to name a few.
To be good and successful at anything, you must enjoy it. In this regard, I think it helps to enjoy being a solid generalist -- a decathlete, if you will -- who is good at a lot of different things, but not necessarily super great or expert at any one thing. That is what drives me. I think it also helps to be a bit of an adrenaline junkie and enjoy the thrill of speed and adventure -- the unplanned and the unknown -- to be perhaps a bit more driven by variety and change than structure, predictability and stability. Of course, you can't go too crazy here -- most people expect the CFO to be the level-headed man of reason when things heat up emotionally, but to me that is just another hat. But I think anybody who is successful in a fast-paced tech environment needs to thrive on change.
Being No. 1 or in the public eye isn't what usually drives most of us who are CFOs.
4. What is a good day at work like for you?
Like most people, I love the feeling of accomplishment and adding value. Being a finance guy, I like to be able to quantify that accomplishment in terms of cash, in making a meaningful contribution to the top line, the bottom line, or the market value of the company. To me, business is a team sport, and I love it when we win together, whether it is driving our cost structure down, closing a major deal, hiring great talent, or pushing the strategy or technology to the next level.
Just a few weeks ago, we had a great day when we closed price negotiations with a few of our major vendors. Throughout that process, which extended over a number of months, we wound up saving the company a lot of money to the point where we saved the company enough money to fund the entire finance department for two years. Now we can take that money and invest it in cool growth initiatives and new technologies. That's the sort of thing I tend to get super-elated about. It was a good example of a team effort.
What feels best to me is to know we're doing well as a team. I think I learned my love of team sports through business.
5. How would you characterize your management style?
Example, example, example, would be my words. I like working with sharp, independent people who mostly want to figure things out for themselves without a lot of verbal instruction from me. I do not like receiving detailed instruction, nor am I a great instructor. Lecturing has never worked very well for me.
I treat others the way I like to be treated. My style probably is not effective for everyone, and it doesn't need to be. I think it is important to know your strengths and weaknesses, be very open and honest about them, and surround yourself with smart people who can fill the voids.
6. What strengths and qualities do you look for in job candidates?
This is a challenging area and even though I'm sure I interview over a hundred people a year, because I know I do two or three interviews a week at least. It's always a fine art. Often, when I'm interviewing people it's not for any specific finance job because our finance team isn't that big, it's probably 5 percent of the whole company. So I can't really focus so much on the technical depth. If we're looking for a senior network engineer, I can only go so deep, so I have to be the guy who looks for fit, how happy is this person, how healthy is this person, and do we really want them on the team.
I believe that each of us, in our own way, creates his or her personal reality. In this regard, we are quite literally responsible for our own experience -- to a far greater extent than we are sometimes willing to admit. Our beliefs and expectations play a huge role in our success and happiness, though we are not always conscious of this fact. I look for people who seem to get this concept, who demonstrate that certain level of personal responsibility and accountability to what they experience in life. Of course, their track record and skills will reflect this, and they generally have very positive, ambitious attitudes. If they have made mistakes, and most of us have, they are open, honest and often grateful for them, and can even laugh about them. They are not afraid to laugh at themselves publicly.
Huge red flags for me are self-defeating language, like blaming circumstances, events beyond their control, or they'll blame the economy. Those sorts of people turn me off very quickly. You cannot be a victim if you truly believe that you make your own world.
7. What are some of your favorite interview questions or techniques to elicit information to determine whether a candidate will be successful at your company? What sort of answers send up red flags for you and make you think a job candidate wouldn't be a good fit?
The traditional interview questions get asked so many times that people tend to prepare and script for. As someone who recruits and interviews frequently, I am not interested in canned, practiced responses to traditional interview questions. I want to quickly get at what drives this person and how they feel about themselves and their circumstances. It helps me gauge how well they will fit in, how seriously they take their careers and their clarity of purpose. So one of my favorite questions would be: "Tell me about what you love and hate about your current job." It is difficult to hide from this question or to bluff. I find the answers very revealing -- it is an emotional question and tends to drive an emotional response.
A red flag would be if someone says "I've had a great opportunity and I was exposed to a lot and I did all of these things, but my boss is someone who is so controlling and limiting that I don't really have enough freedom to do what I want to do." Or if they say it's the board's fault or it's the culture of the company that has been set up in such a way that if I rise above a certain level, my peers will try to take my legs out from under me, because that's just how it is with the company's culture.
I was recently interviewing a very senior technical candidate. I can't judge his technical abilities, I will leave that to my team. But when I asked him this question, the response I got threw up a lot of red flags. On paper, he was a very accomplished guy, who was very impressive and in talking to him it was clear he was very smart. But he did not believe he had much personal control over his circumstances within his current job. This is almost never the case and I didn't believe him. I believe that in most of those situations you just haven't been creative enough. Maybe you don't want to be.
You create your reality through what you believe. Your belief structure is what puts walls around your experience. If you don't believe you can get around that, you're basically staring at life through this invisible wall that is holding you back, but it doesn't necessarily need to. If you don't figure out ways to get through it or get around it, it will hold you back forever.
8. What is it about your current job, at this particular company, that sets it apart from other chief finance positions?
That's easy -- it's the people. I've been working professionally for about 25 years and been very fortunate to be exposed to many different environments, especially in my consulting days. Collectively, EdgeCasters are among the most vibrant, creative people you will find anywhere. We are very lucky. Something about the culture here draws these sorts of folks in and then pushes them to new levels of achievement and growth. I have seen some amazing individual transformations here and have experienced some myself. It's not for everybody -- not everybody makes it, but those who do really have a lot of drive and energy, and a lot of desire to participate and to engage in the team environment.
The culture is a reflection of its founders, whom I have known for many years and eagerly sought out when I was looking for a new adventure. They are the kind of team you want to stick with for life, and that is powerful stuff in business. If you have read Jim Collin's book "From Good to Great," you know exactly what I am talking about.
As a CFO, working here is pure pleasure. We consistently exceed financial performance expectations because we have a first-rate team and strategy. Our VCs and investors are very pleased, so they don't micromanage. Board meetings stay focused on meaningful strategy discussions. I also have an awesome finance and admin team -- they make me look good and basically run the show on a day-to-day basis with very little involvement with me. That frees up my time to focus on developing the business outside of the traditional financial function. In many ways, I wear both the CFO and COO hats, which keeps things fresh and exciting, and lets me do a lot of things to increase our value and profitability. It is a great honor and a pleasure to be a part of this place and work with these folks.
9. What do you do to unwind from a hectic day?
I am a big fan of the outdoors. I also love contrast, especially to the congested streets of LA. Whenever I can, I escape to the big, wide open spaces for some cycling, trail running, hiking or skiing. The combination of intense physical exercise, solitude and a cranking iPod are the ultimate reset button for me. I find this is best followed by kicking back with a frosty beverage and a Lakers game, where I can live vicariously through athletic abilities that I wish were mine.
My wife and I get out to the mountains fairly regularly. A couple of our favorites are the Sawtooths of central Idaho and the mountain-biking mecca of Moab. We can get lost for hours in those hills and come back totally recharged. I have heard it said that extroverted people recharge their batteries in social settings, and introverted people recharge their batteries in solitude. If this is true, color me introverted.
10. If you weren't doing this job, what would you be doing?
If something magical happened and EdgeCast was suddenly acquired and that lined our pockets with cash, I would probably take a six-month cycling sabbatical and ride across America. That's something I've always wanted to do. Then I'd probably do some hiking and find a way to do some scuba diving since it's been a while since I've done that seriously. I really enjoy the outdoor adventure sports, so I would take a chunk of time for that. But I think after about six months, I would probably get bored and find a way to get the band back together for another run at building a new venture. I don't know what that would be, but I've got some cool ideas cooking and I am sure they do too.
I would also like to write a book someday, a novel of sorts built on some personal experiences and some things that I find are stranger than fiction.
I would like to sunset later in life on serving a meaningful philanthropic cause that reflects my abilities and beliefs. I'm still searching for what that would be, but I do have a desire to give back to life.