CMO required for a fintech startup? NO NO NO!

A few days ago I read an article in the Times of India “Freelance CFO”s, the unsung startup heroes” which mentioned the increasing trend of startups hiring CFO Advisory / consulting services to help them create / validate their business fundamentals and financials.  The article states “Behind every successful startup, there is an unsung hero — the chief financial officer (CFO) and his team of number crunchers, whose efforts make that million-dollar funding possible. If you scratch the surface, it is likely that these number crunchers have been sourced from a CFO service agency, a trend that is gaining popularity in India. Apart from first-generation entrepreneurs, several venture capitalists (VCs) also engage such agencies either on an ongoing basis for monitoring their investee companies or for specific projects — such as for building robust performance management information systems (MIS) or to act as interim CFOs. Even second or third generation-run family enterprises are hiring these agencies for that professional touch.” After all, who knows and understand the “number game” better than a CFO? Most importantly, for any business to survive, sustain and scale –one thing makes all the difference “Those magic numbers or financials”.

Several key contributing factors add up to this trend. One, CFO’s are generally highly paid (50+ lakhs / annum – at least, according to the same article) and good CFO’s are a rare breed. Secondly, startups don’t need a full-time CFO, so the next best option is to hire them on a need basis. It creates a win-win situation for both the CFO and the startup. In other words, a practical way to address the “demand supply” equation in the service economy.

According to published estimates, by 2020 India will have 1,15,000 startups. This means good news (and good money?) for CFO’s who are providing advisory / consulting services to startups.

As a new age marketer, I’m guessing it could be the same situation for CMO’s (Chief Marketing Officer) moving forward. One, most startups don’t typically need / plan for a full-time CMO (Chief Marketing Officer) position during the initial phases of growth. In fact, all the founder/ CEO’s I have interacted with believe they don’t need to invest explicitly in marketing during the early startup days. Almost everyone said that what they would spend every single rupee / dollar in individuals / teams which builds / creates what they intended to sell (could be technology, product, process, platforms, tools or services) or individuals / tools who actually sell it! And marketing does not help directly in either of these two. “It is extremely hard to value vanity metrics around branding / marketing when it does add directly add to my top-line or bottom-line” was the founder chorus.

The other key point was that all startups recognized was that they needed a CMO to help create and validate the initial business plan, and provide overall marketing direction / guidance on a regular basis – especially in the context of branding, digital / content / social media marketing and customer acquisition. They also recognize that marketing was indeed a key enabler and fuel for growth – especially with the increasing trend of marketplace solutions (based on Uber-like models).

Here again, an experienced CMO who truly gets ‘digital / social / content / data-driven marketing’ is a rare breed. CMO’s who have hands-on experience in modern marketing strategies along with live testimonials to show for their success are again far and few, so they’ll anyways come at a premium (paid on par with the CFO, if not more). Since most startups are cash-strapped in the initial days – It becomes an issue of relative priority and planning!

So just like the Freelance CFO’s work with startups today, is there a market requirement for Freelance CMO’s? Something like “CMO’s-As-A-Service” in which you create an Uber-like marketplace to connect start-ups who need Marketing Advisory / Consulting services with the uber-cool CMO’s?

Will startups pay for providing marketing advisory / consulting guidance? And if yes, maybe that is a startup idea in itself? Leave a comment to let me know.