The art of negotiation: Jim Kelliher’s path to becoming a CFO.

In our recent Path to Becoming a CFO session, Jim Kelliher, former CFO at Drift, repeatedly touched on the delicate art of negotiation. Perhaps the most striking example was when host Jeff Epstein, Partner at Bessemer Ventures, asked what it was like to take LogMeIn public shortly after the banking crisis of 2008. After a long delay due to the tumult in the financial world, the company was one of only four technology IPOs in 2009. “It was a dramatic and exciting time,” Jim remembered, “we helped pave the way for further IPOs going forward.”

The new post-recession environment presented challenges, including some last-minute negotiations where Jim held firm on the price. In the end, LogMeIn was a very successful offering. “We got it out, and we were very successful for the shareholders and the employees,” Jim said. 

Jeff asked about his philosophy around negotiation, and Jim focused on the collaborative nature of recognizing the other party’s needs. “In any negotiation, I always believe you have to put yourself in the other person’s position. And that person needs some wins.” At the same time, he pointed out that you have to be conscious of the points you won’t concede. 

“I always look at it as, what does the person on the other side of the table want? And what can be a win for them? How do we do this together?”

Jeff asked how that philosophy extends to product pricing, pointing to the two extremes of companies who are fixed in their (non-negotiable) pricing model and companies who regularly engage in negotiations resulting in discounts as high as 90%. Jim explained he doesn’t see those dramatic discounts as a good strategy, since they can lower the perceived value of your product and effectively make the pricing model meaningless. But in B2B markets, “I do think you need to price your product in a way in which you can give up some — 20% to 40%.“

Lessons learned abroad. 

Jim said he learned a lot of negotiating skills while working as European Finance Director for Cullinet Software, the first software company to be listed on the NYSE. 

After graduating from Bentley University with a degree in accounting, Jim accepted a position at the Boston office of PwC. His role there focused largely on tech companies, and after a few years, he was offered the Cullinet position. Then, at the age of  just 26, “Without having ever left the United States, I got a passport, took a job, went overseas, and spent almost five years in London.”

As a young newcomer, the role was initially challenging but ultimately proved invaluable in shaping his career. He says he came away with three central lessons. He began the role with a background centered around accounting, but overseeing such a broad range of responsibilities taught him about operations. He also learned how to negotiate. “I had to figure out what the agenda was of the person on the other side, whether it was a finance director in Belgium, Germany, or the U.K. And, then try to figure out how we do this together and work together.”

The other big lesson was realizing that his overseas experience differentiated him from others in the job market and provided proof he was willing to take risks. 

Mentorship from a unicorn CFO.

Jim’s first CFO position was at IMlogic. Before IMlogic, he held Senior VP positions at Parametric Technology, overseeing a staff of about 135. At IMlogic, “I had one person working for me and it was a receptionist. I roughly cut my cash compensation in half to go into a startup environment.” In the end, the risk paid off. 

“I got lucky with IMlogic. I got into a CFO role. It scaled for a period of time and was, in the end, a very successful exit, with the sale to Symantec. It got me to CFO. It got me back into startups. And it was fun.”

When it comes to others’ CFO paths, both Jim and Jeff expressed pride in the number of finance professionals who reported to them and eventually went on to become a CFO themselves. Jim said he’s frequently been asked to give advice on how to get there. He focuses on the importance of a broad skill set. 

“If you’re coming up from the accounting side, then you need to get on the operation side of the business. And you should see the FP&A part of the business. That’s where you see the operations, and that’s where you help businesses grow. And, alternatively, if you’re coming up from the FP&A side, then you need to get onto the controller side of the business.”

He also talked about the need to be proactive in developing your own career path. That can be as simple as starting with a conversation with your own CFO, explaining, “Here’s what I really want to develop. Are there ways I can get exposed to that?” 

Advice from lessons learned. 

Jim now puts his broad range of experiences to use as a startup advisor and angel investor. When asked what is the best advice he’s received himself, he pointed to the words of his former CEO at Parametrics, Steve Walkse, when he was trying to decide between Parametrics and another opportunity: 

“Forget about the job and focus more on the people that you’re interviewing. Do you like the people? Do you like the culture, the feel of it? And do you have confidence that this management team can be successful?”

He also emphasized the importance of keeping up with the increased emphasis on analytics in finance. “I encourage young VPs of Finance, Controllers, or Directors of FP&A to get smarter and smarter on the use of analytics and how to use analytics to manage businesses and make decisions.”

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