 Hi, everyone. Thanks for having me here. So a bit about me. I know that they just gave sort of my bio, but I'll give my own bio You know I have a Finnish name Miko, but I'm actually from New Jersey So that's usually pretty confusing for people around here And I was able to sneak into this conference sort of undetected because I really love saunas and so people You know as long as I'm not speaking they think that I'm Finnish And as they said before originally I was an investor or at least I thought I would be an investor And so I started working at a firm called 3g capital in New York City It's a firm that's very well known for cutting costs. So, you know, I have some background on this subject of extending your runway and After I worked at 3g I was asked to go to the Kraft Heinz company and that's a purveyor of ketchup and Processed cheese and you know canned food and things like that and That at that company I served as the regional CFO in China Singapore and the United States And we did a lot of cost-cutting and they didn't really need to extend their runway, but we were very frugal And as they said before my wife and I moved to London during COVID I didn't have a job I was looking for a job. I applied for the CFO position at Revolut on LinkedIn. I was rejected During the first go around But I was able to sort of convince them to hire me and I was able to join in early 2021 I worked there until this summer when I joined Bolt. Bolt is sort of a local company it's headquartered in Tallinn just south of here and It's a great business and I've been sort of loving my time at Bolt since I since I joined So what is this talk going to be about? You know the title is cutting burn Extending your runway What we'll discuss is the theory and the practice of those things cutting burn and extending your runway And as much as we can in a relatively brief period I'm going to try to cover a bit on costs how to cut them and then offer a few words and Thoughts on working capital and how it may be optimized and then we'll consider the difference between cash and non-cash expenses and How to basically have more non-cash expenses in order to reduce your cash burn? And then I'm going to suggest a few ways to increase gross margin Before giving a few final thoughts on fundraising And so not to give it all away, but in short you should cut your costs periodically And it's more emotionally or politically difficult to cut costs than it is technically to execute You should optimize working capital which means lengthening payment terms by reducing upfront spends in favor of periodic or subscription products means negotiating with suppliers And it means you know in the worst-case scenario or at time times of real need Just absolutely withholding payment to people that you owe money to And it means collecting accounts receivable faster and Finally, finally you should focus on on freeing trapped cash. I Won't go too much into it But you should grow you should improve your gross margins by focusing on pricing Variable costs and building a SWAT team to understand unit level PNL's and As I said before you should move as much as you can to non-cash expenses Typically that means increasing equity compensation Doing salary sacrifices and seeing if you can pay your vendors in equity and Finally and we can you know get into this a little bit more But always raise money when you don't need it raise more money than you could conceivably need and remember that Investors are emotional and irrational So you know with that sort of outline That's basically all I'm going to tell you and if you want you can leave now because I'm just gonna go through what I just said a Little bit more slowly So costs There's a great saying about costs, which is that they're like fingernails. I need to be cut every so often And then the question is how do you cut costs? My framework goes like this should focus on establishing control Building visibility and then leveraging your control and visibility to have influence Over your entire Organization so I'm gonna go through that control visibility and influence Control means that you're in control So no surprise You need to know what the costs actually are you need to control who approves purchases? And you need to control who actually pays Which is you know what I mean by that is you know how the cash actually goes out the door If you don't have control a very basic method of maintaining absolute control is to control the purse strings Or the bank accounts of your company? It's not a very efficient or scalable method, but it's very effective And what I mean there is that if anyone wants to spend any money or You know get approval for spending any money or actually execute any payments the absolute most of you know Assured way of having control is for you to actually be the one who does the payments or At least approves the purchase orders or spending So all in all step one is to make sure that you can confidently say what your costs are Who approves them and who actually lets cash out the door in terms of payments? Step two is visibility you've got to build it for the central finance and management team You've got to build it for the owners of PNL's Throughout you know the company can be business unit leaders or You know what however you're called the vertical general managers And the question is do those teams and people have reports or dashboards that allow them to understand what their costs are with the appropriate frequency I Would focus on particularly understanding areas that are easier to cut without cutting to the bone So things like travel marketing entertainment offices or office parks and Then it may make sense to To leverage a concept called a cost matrix cost matrix can be quite effective Because basically you end up having more than one person responsible for any given costs So in a cost matrix basically You know it's like any type of matrix But you have one access is the type of cost and the other access you know the the sort of vertical access Would be the entity or the business line that is actually spending that cost And then you tell both the person who is responsible for all spending across Verticals for that type of cost and for the vertical leaders themselves that they're responsible for for that spend So you have two people that have to Approve before anyone can spend any money And then the second thing I would say is you know don't accept any averages Or I guess this is the third thing that I'm saying but don't accept any averages rank from biggest to smallest benchmark subdivisions Rather than consolidated levels the averages can just hide the truth And they tend to be obfuscating rather than revealing It could be interesting to use an 80-20 rule or Pareto analysis In order to pinpoint exactly what are your biggest contributors to spending or opportunities to reduce costs and always at least in my view Have some vision of cash spending don't rely only on accounting or accruals That don't reflect exactly the reality, especially if you're running out of cash the third and final step is influence and it's important to focus on Influence and leverage in your organization In my view culture on costs always has to come from the top which means that the CEO or founder At least that person hopefully that person and the CFO or someone else who's in charge of finance They need to lead And that means or it could mean acting as an owner or leading by example the classic example is business class travel You know where I think it's fair to say that most of us if we're flying let's say between Helsinki and London You know, it's about a two-hour flight if it's our personal travel There's almost no scenario where we would pay, you know the extra a couple hundred euros for a business class seats Especially when we you can see that they're exactly the same as the seats in the back But you know, it's possible that at some corporation they would approve You know flight to be in business class and acting as an owner means Basically getting rid of policies that you wouldn't do if it was your own family or your own business You can always ask for ideas and empower teams to deliver savings on their own initiative crowd sourcing usually works I Would do symbolic things, you know, I think I talk about you know performing ritual cost-cutting for sacrifice So no printing No free food No travel, you know if you really want to get serious And then on the sort of commercial spend side terms of marketing or customer acquisition costs or sales teams I would shorten the payback thresholds that you expect in order to approve spend there So if normally you had an 18 month payback that you wanted to see maybe you want to go to 12 months or nine months or even six months So that's it on costs, which is probably really the bulk of extending your runway But a moment on working capital which can also be effective in terms of generating cash And as a reminder working capital is your inventory plus your accounts receivable minus your accounts payable It's always better if that number is negative If you have negative working capital that means that you're being financed by some combination of your suppliers and customers Effectively they are extending your credit And what I would say about working capital is you know first don't be afraid to negotiate with your suppliers Some version of you know, it obviously depends on kind of the scale and the maturity of your business But some version of a procurement team or global business team, you know Someone who's explicitly responsible for getting the lowest possible price at the highest possible quality for anything you need to buy You know that that team is very likely to have a high return on investment at least initially over time It may sort of diminish if you're actually successful in negotiation The second one is don't accept trapped cash, this is sort of more esoteric, but Cash can basically get stuck in various bank accounts can get stuck in agreements that you have With vendors or customers it can get stuck In all sorts of requirements and the short thing here is just don't let it get stuck because that's a complete waste of money And be annoying with your own team and your counterparties You cannot afford to have trapped cash given your cost of capital and your need to extend your runway And then depending on your business and the delinquency rates of your customers You may want to consider an internal or external collection team. Of course, there's a reputational risk to that But don't let other people or companies take advantage of you Cash versus non-cash expenses I mentioned this at the beginning There's three or at least here are three ways potential ways to reduce cash reduce cash expenses The first is to pay your team or staff in equity To do some sort of a salary sacrifice Of course, you'd prefer not to do that because in the future your company is going to be worth a lot But it has to exist in the future in order to be worth a lot in the future. So it's something to consider In terms of paying your vendors in equity, it's the same story and then in terms of changing You know, my third suggestion here changing your marketing or customer acquisition Tools to be product-based by which I mean sort of a trial Basically allowing your customers to try your product for free as a way of acquiring them That can be certainly more cost-effective than performance marketing Of course, that depends on exactly what your product is and the effectiveness of trial-based marketing but it could be Very effective if you have minimal variable costs And finally, you know, we're not finally but coming to gross margins I mean it could be a you know full sort of session on its own So basically going to basically going to leave this topic for another time, but I would highlight three things First and second you can't cut your way to growth But you can grow your way to profitability if you have gross margins your good gross margins And fixed costs that are actually fixed. So it's worth figuring out and being maniacal about optimizing your gross margins And then the third thing I would say here is some of us probably haven't spent enough time optimizing pricing And it's just about the easiest thing that you can do to improve cash flow And if it's impossible to do that's a good sign that you have a bad business And so you may want to think about just shutting down and then finally a note on raising money Probably you've heard this from other people But it's worth having a number of plans that you're confident you can execute which offer you different periods of runway. I Would say never raise money when you have to it's the worst time to do it always raise when you don't need the money and Finally always raise more money you need than you need and you store it away for a rainy or snowy day Once you have the money or minimize non-investment spend maximize investment spend as long as the you know the returns are controlled and make sense and You know I would leave you with a note to always remember that investors are emotional beings They'll frequently do Frequently not do what makes sense and do what doesn't make sense And so you need to understand and be aware of that and capitalize on it when you can So that's all from me. Thank you. Hopefully it was helpful if anyone has any questions. I'm happy to answer them later