Building Finance Teams That Scale

Charlie Liu (00:02)

Hello everyone. Welcome back to Making Cents with Charlie. Our guest today is a finance executive with over 20 years of corporate finance and accounting experience. He's worked for Walt Disney and on iconic brands like the Power Rangers, which I want to nerd out on so much from my childhood. And today he helps startups avoid screwing up by providing risk diagnostics and sales strategy services. Welcome to the show, Chad.

Chad Keller (00:30)

Thank you so much for having me.

Charlie Liu (00:34)

I'm really excited for this one. We've had a few chats now. It's always been quite energizing. Now, Chad, before we get to some of the deeper stuff, we always like to start with some rapid-fire questions.

Chad Keller (00:46)

All right.

Charlie Liu (00:46)

And I'll go through some of these, really excited to see your answer. So the first one is: what was your favorite Power Ranger? Which year and which color?

Chad Keller (00:58)

Ha, that's a good question. I'm gonna go with the first season and the black Power Ranger, because he was not featured as much in the episodes, as prominently, as say the red one or the pink one or whatever. There are very few episodes, as I remember it, focused on either the black one or the yellow one. So...

Charlie Liu (01:28)

I did remember that. My favorite one was always the first season, the red one. Being young, I had no idea, and red was the main hero. And that was actually when I first came to Canada, and it was one of the first shows I saw in English. I learned most of my English off watching that show. And I later found out, I don't know if it's true, I found out later that a lot of the fight scenes were actually produced in Korea, is that true?

Chad Keller (01:59)

Yeah, yeah, yeah. Absolutely. Yeah. Or it was in Japan. So...

Charlie Liu (02:02)

Japan.

Chad Keller (02:03)

Yeah, I believe the show was called Super Sentai. And it was a very different show than what was done in the States. And so what Saban would do is they would take the fight scenes, a lot of the, you know, helmeted stuff and a lot of that, and they'd recut it and do the best they could to create brand-new narratives based on that footage. And so they take, I want to say it was like 11 minutes or something like that of footage every episode to make the new seasons. And every time a new season came out, the Saban team would have to go and say, "Okay, how are we gonna make this work?" Because it was very different narratives from the narratives on the Japanese show.

Charlie Liu (02:54)

Wait, Chad. This is brand-new knowledge. And I'm gonna nerd out for a second before you talk about finance or any of that stuff.

Chad Keller (02:59)

All good, all good.

Charlie Liu (03:00)

So the Japanese show came first, and basically...

Chad Keller (03:03)

Yes.

Charlie Liu (03:04)

...they reused the content and then created stories and things around it to fit the content they already had.

Chad Keller (03:14)

Yeah, basically they would have this footage. They'd have these fight scenes and these battles, whatever. They'd take that stuff and then they'd say, "Okay, how can we, with this theme..." Because a lot of the seasons had different themes, right? It's like, okay, so now we're doing time travel. Okay, how are we gonna make these Zords and these Rangers that look this way fit into a story that's gonna make sense, and that we can still have the same sort of plot work, right? And then they'd go and do their own actual English narrative of their own story. So you might see footage in Super Sentai that's in some dramatic thing that's wildly different than the Power Rangers kids' show, which, you know, has a very, very, very different story. But some of the footage is gonna be the same, because they didn't want to reshoot. As I understand it, it was very much a cost-saving measure, going, "Hey, we'll just take this footage. We won't have to do all these fight scenes. Then we can just put in our own stuff at the beginning, at the end, throw in our own dialogue or whatever, and save a lot of money." So there you go.

Charlie Liu (04:26)

That's, I mean, that's a phenomenal strategy. I mean, the fact they're wearing helmets, so you had no idea. Like I...

Chad Keller (04:31)

Exactly.

Charlie Liu (04:32)

...had no idea. I mean, I loved it. Probably my favorite childhood show. I had no idea.

Chad Keller (04:34)

I grew up on it. In high school was, I think, the first time I saw it. And I remember watching it every day after school and being so annoyed, so annoyed at this. Okay, if you know the bad guy is gonna get big, like really big...

Charlie Liu (04:52)

Yeah. Yes.

Chad Keller (04:54)

...get big first, slosh bad guy, show over...

Charlie Liu (04:57)

Yeah.

Chad Keller (04:57)

...like, dude.

Charlie Liu (05:01)

I do remember thinking about this as well. It's very defensive. It's very reactive.

Chad Keller (05:06)

It's like, no, I can't believe it's getting big suddenly. Wait a minute. Every enemy you go against, every time, every time, it gets big.

Charlie Liu (05:19)

Did you know what age demographic it was targeting? 'Cause I was nine when I was watching. I had no clue. It made perfect sense to me back then.

Chad Keller (05:27)

I think you're about the right age range. You know, that...

Charlie Liu (05:30)

Okay.

Chad Keller (05:30)

...age range is historically such a challenging one for toy makers and folks like that. To really find something that can be engaging for seven-, eight-, nine-, ten-year-olds, you know, and yet not make it so violent, so crazy. And that's where all the money's made too, is on the merch.

Charlie Liu (05:52)

Fascinating. This is probably the most I've ever spent on the rapid fires. I'll get back to you in a...

Chad Keller (05:57)

[laughs]

Charlie Liu (05:58)

...sec. So that ICP, that age group, the nine-year-old, ten-year-old, is the hardest one for them to target and capture.

Chad Keller (06:06)

Yeah, it's a really hard one, because, and you think about Disney, right? They went and acquired the Power Rangers at one point, right? To kind of fit that little puzzle piece, right? And then later on they sold it back to Saban many years later, and then they went after Star Wars and they went after Marvel to, again, try to hit that... but the boys' demographic is a tough one. Girls' demographics, as I understand, are far easier for, you know, the toy campaigns, marketing campaigns, synergy stuff. But guys are harder, especially at the younger age. And it was really hard to find really good content, or was harder to find really good content. And so I remember going to some Disney branding presentations that they would do, and they would walk through and be like, "Here's our matrix, and the Power Rangers fit here, and Ratatouille fits here, and these are not the same thing." So anyway.

Charlie Liu (07:11)

That's fascinating. I mean, I haven't done much work in your space, this media entertainment space. I'd love to actually learn how finance surrounds that. But Chad, let's finish the rapid fires. I would love to hear...

Chad Keller (07:27)

Yeah.

Charlie Liu (07:27)

...maybe that first. So, superpower that you'd love to have.

Chad Keller (07:31)

Superpower I'd love to have. Huh. To use the theming of the Power Rangers to get giant whenever I want to. Surely that would not have any, you know, negative side effects, but whatever.

Charlie Liu (07:48)

Well, you need all your clothes to expand with you. You need to have liability...

Chad Keller (07:53)

It'd get to be expensive.

Charlie Liu (07:54)

...insurance to the roof.

Chad Keller (07:56)

Yeah, yeah. Wardrobe expense would get out of control, but, you know, it'd be big. That'd be...

Charlie Liu (08:00)

Yes. Yes.

Chad Keller (08:03)

...fun, at least for a few minutes.

Charlie Liu (08:07)

I know the last time we were talking about AI a little bit. I know you were playing around with it. The question is Copilot or Gemini, but what is your LLM of choice?

Chad Keller (08:18)

Lately it's been Gemini. The first one I used most meaningfully was Copilot. And I think actually how we met was talking about how Copilot was doing some pretty amazing things in the transcription, like live transcriptions and all that, which, when it does a live voiceover cloning someone's voice in another language, that's frickin' amazing. I mean, that is just... There are use cases for AI that are kind of like, "Yeah, it might be useful, it might be whatever." And then you experience that and you're just like, "Dude, that's cool, right? And useful."

Charlie Liu (08:55)

Have you tried the live translation calls in Google Meet?

Chad Keller (09:01)

I have not yet, but I imagine it's very similar, because, you know, they all copy each other, I'm sure, to some extent.

Charlie Liu (09:06)

You gotta... that's the only one I've tried so far. A month or two ago, I spoke to a whole team in, I wanna say, Mexico. I know basic Spanish, but not conversational for a business conversation...

Chad Keller (09:21)

Right.

Charlie Liu (09:21)

...on ROIs and EBITDA calculations. It was fascinating. The other side spoke in Spanish, came through English, and I spoke in English, went through in Spanish. It was insane.

Chad Keller (09:34)

Right. And it was probably, like, a second delay, right?

Charlie Liu (09:39)

Basically it's non-noticeable. The models they have on language, it's incredible.

Chad Keller (09:45)

It sounds like the same thing it was doing with Copilot, which is amazing. And even if it doesn't perfectly translate something, everything else is pretty good. And I love how it clones the voices. Like, for example, I used to work with a good friend of mine that was based in Mexico City as well. And I knew what his voice sounded like in English, because he would talk to me in English a lot, right? And then I heard the cloned voice of him talking in English when he was talking with some vendors and things, or I was on calls with him and I was listening in, and I'm like, "It's the same." They're capturing this so well. Even some of the vocal nuances and quirks and whatever. It is. It's not gonna take everybody's jobs yet, but these are...

Charlie Liu (10:29)

Pretty incredible. It captures all to do with the... Yeah.

Chad Keller (10:35)

...little tools in the toolkit that we all should be trying to use in one form or another.

Charlie Liu (10:44)

It's opening the world up. Even when I was really studying Spanish, I never thought I'd get to a level where I could have a business conversation in a new language I pick up. But it's allowing all this to happen now.

Chad Keller (11:00)

Yeah. Which is huge, right? I do my Duolingo every day. Every day. Every day.

Charlie Liu (11:06)

Yeah.

Chad Keller (11:06)

And yet there are times where I think to myself, "Will I need to have this five years, ten years from now? Or will I have, you know, live translations through my earbuds or whatever as I'm walking around somewhere?" And I know it's somewhat possible now in the latest generation of, say, the AirPods or whatever from Apple. I haven't used them, so I don't know how they work or how good they are. But if they're anything similar to the live translations that Gemini or Copilot are doing, then I have high hopes. And, you know, it could really be a game changer in business and in travel. I mean, I went to Japan a couple of years ago and to the Disney parks there. And if you haven't gone, I cannot recommend it highly enough. They're amazing, right?

Charlie Liu (11:58)

I wonder, the DisneySea one. DisneySea. I think it's the only DisneySea on the planet. Yeah. Yeah, I wonder that one.

Chad Keller (12:04)

Yeah, yeah, correct. And...

Charlie Liu (12:06)

Yeah.

Chad Keller (12:07)

...yet the prevalence of Japanese spoken language is huge, because obviously they're in Japan, right? But yet those are the best Disney parks in the world. And so imagine if you could marry the two things. You could walk around and hear everything, all the announcements that are in Japanese, hitting your ears as an English speaker, and yet still getting to experience the best Disney parks on the planet. Damn, you know? Sign me up.

Charlie Liu (12:37)

And again, you keep the nuances of the folks speaking. So it's not like a dubbed-over version where it just sounds completely off.

Chad Keller (12:52)

Right, right. It's a brave new world.

Charlie Liu (12:55)

We have two more. Chad, are you a night owl? Early bird?

Chad Keller (13:03)

I am an afternoon owl. That's where my best jam is. I...

Charlie Liu (13:08)

Really?

Chad Keller (13:09)

I'm really not very good as a morning person, and I'm really not a night person. I get to 11, 12 o'clock at night and I'm like, "Dude, I can't." But I am at my best at two o'clock in the afternoon. That's my...

Charlie Liu (13:26)

That's where you do your focus work.

Chad Keller (13:28)

Yeah, yeah. After lunch, everything's handled, caffeine's happened. You know, it's go time then for me.

Charlie Liu (13:37)

That's really productive, I think. It seems easier. I had to learn to be a morning person this last year. Struggled with it. For...

Chad Keller (13:45)

Okay.

Charlie Liu (13:47)

...the longest time of my life, my best work was from two to four AM. But it's very hard being a productive, healthy adult when you're working between two and four AM.

Chad Keller (13:59)

Well, but now you have other challenges, because you have teams in places where the only time you're gonna be able to talk to them is in the morning for you, right? So...

Charlie Liu (14:10)

Yes. Working with my team in South Africa and also with clients in the UK, like London. The worst one is... the worst one's actually India. Singapore's not that bad, because I can meet their morning in my night. I think India was...

Chad Keller (14:26)

Yeah.

Charlie Liu (14:26)

...like seven hours, where you're halfway. So the best time for them is like three, four here. And yeah, I mean, that weight that I had to manage was probably the drive I needed to become a morning person.

Chad Keller (14:46)

Well, morning is not the worst time. It's just, is it before or after the coffee? Because before coffee, if you're like me, just don't. Just, just don't. But after coffee, everything's good. So...

Charlie Liu (15:05)

Have you seen... I've seen literature where you can map out the progression of human civilization and then the invention or finding of caffeine, so tea and coffee, leaps and bounds after as a species we discovered caffeine.

Chad Keller (15:29)

It seems to be that it's drugs that have kept the species progressing. Not only is it the progressions and productivity gains that we've gotten from coffee, but I remember watching years ago on Netflix, before Netflix was cool, they had sufficiently bad documentaries to stream. One of them was how beer changed the world, or something similar to that. And basically they talked about how it was the first big currency that people use...

Charlie Liu (16:00)

Mm.

Chad Keller (16:00)

...to get stuff built, and humans quickly learned the fermentation process and all this, and it was very motivating to use almost as a currency to get people to get things, you know, big structures built, big cities created and all this. And humans were more than willing to do it for the crudest of crude beer. So...

Charlie Liu (16:26)

Yeah. Yeah, absolutely. And well, I'd love to actually dig into some finance accounting stuff. But recently I've noticed...

Chad Keller (16:36)

Yeah.

Charlie Liu (16:39)

Do... we can chat over there. I love it. I don't know if you noticed. I find that in the last couple of years, they've... a lot of... no, CPG entrepreneurs are taking inspiration from tech. What I've noticed is a lot of companies are taking existing products and then just repackaging them completely. Take nicotine. I was in SF last year, first time I've been there since COVID. It's great to go back, but I noticed everyone was chewing these nicotine mints. That's a big thing now. It's a nootropic, it helps you focus, like you said. It's done a lot for the world, and I've never thought that that could be a great product, right? Because you went from cigarettes, you went from variable...

Chad Keller (17:34)

Chewing.

Charlie Liu (17:35)

...different forms, chewing to pouches the last couple of years to now. Everywhere I saw in Silicon Valley, these mints.

Chad Keller (17:45)

It does not surprise me. There's a heavy inspiration in the world of business, right? If you have a cash flow, you want to keep that cash flow. So if you're...

Charlie Liu (18:01)

Yeah.

Chad Keller (18:01)

...an Altria and you are saying, "We like making money off tobacco, this works for us." And you're living in the United States, or doing business in the United States, and you're going, "But all the health brochures are saying that this could kill you," then, you know, they have to get more and more creative. But they will get more creative, because they want their cash flow. And it's sort of an awkward thing, because on one hand, I think we all can agree that smoking's probably bad and probably shouldn't do it, among other things. And yet I can see where an argument could be made to somebody, especially in a convenience store somewhere: "I'm not smoking, I'm just having this mint." No, you're just doing the same thing. You're just doing it in a different form and it's probably just as bad. And yet the brilliant folks at Altria are going, "Well, okay, we lost our cash flow with these sticks, and...

Charlie Liu (19:02)

Yeah.

Chad Keller (19:03)

...now we get it in these mints, and yet we can still pull a premium because we still have all these addicted folks." And...

Charlie Liu (19:10)

It's very... the marketing and branding is very premium. It's quite expensive. And I'm sure it's cheaper to produce than actually growing tobacco leaves, than to just get, like, directly synthesized nicotine.

Chad Keller (19:26)

Yeah, yeah.

Charlie Liu (19:29)

Love to... we should actually go back to what we were talking about earlier, when you were talking about your experience at Disney. I think a lot of folks on the other side would love to hear about your experience. What I find is, I actually get a lot of younger, out-of-school folks listening to us, trying to learn more and figure out what to do. I've noticed a lot of folks, actually on Reddit, getting guidance, a lot of fear with AI. And the jobs disappearing. I do think it's not gonna replace everyone, but I do think there are certain aspects that are going to be replaced, if not already replaced. But I think having the folks hear about your experience would be quite interesting, Chad.

Chad Keller (20:14)

So my experience was somewhat unique, but I think it was fun. So when I started at Disney, I was trying to break into the entertainment industry, and a friend of mine I worked with at Six Flags, the local Six Flags park out here, which I cannot stress enough how amazing an experience it was to work at a Six Flags park making nothing. Nothing. I mean, minimum wage, huh? Okay, maybe a quarter above that. I mean, nothing. And yet the experiences I got from that were tremendous, right? And one of my coworkers there helped me get a temp job at, at the time, Warner Brothers, which, all the entertainment companies are all the same neighbourhood basically of LA. And the first, I'd say, year or so, I was doing the most unglamorous work you could imagine, basically showing up, filling in for somebody, answering the phone, if it would ring, being bored out of my mind, waiting for something to happen, and scheduling a meeting for people every now and again, and just, you know, not the most exciting stuff in the world to me. But from that, it opened up an opportunity, because I was using a little bit of SAP to do some ordering of some things, right? And I put that on my resume at one point. Somebody found that, and we had a chit-chat, and they said, "Hey, we have a temp job at Disney if you're interested, and they need somebody that's used SAP at all, has opened it up at all." And that's really all that they were hoping for. I'm like, "Well, I've used it some. I mean, I don't want to oversell this, but I've used it some." And so I went and I did that temp job for like nine months. And it was a lot of just attributing stuff. It wasn't even finance and accounting focused. It was more like attributing different titles in a hierarchy that they would use to identify different products in consumer products. So for example, you might have Mickey as a property, right? And that would be associated with one layer of the hierarchy. And then if you go down one, you'd have, like, classic Mickey Mouse. And that would be more of a next-level attribute, which then would be paired with the thing that was being sold. So like a classic Mickey Mouse T-shirt. And you'd want to know what those things are if you were ever going to do any analysis around what sales are working, what are not, what are you...

Charlie Liu (23:10)

Yeah.

Chad Keller (23:10)

...actually selling, how is the property Mickey functioning versus...

Charlie Liu (23:14)

Mm-hmm.

Chad Keller (23:14)

...how is... you know, classic Mickey versus, say, Minnie, or even the other versions of Mickey, like Steamboat Willie Mickey...

Charlie Liu (23:19)

Minnie. Yeah. Yeah.

Chad Keller (23:25)

...versus, you know, all these different subsets of Mickey, right? And then from that data set, you could then do analysis, which they would do, as I understood, outside of SAP. But the SAP would gather up all the data, and then outside of it they could go and figure out, "Hey, how is this property performing? How is that property performing?" And if we go back for a second to that kind of matrix I was talking about, then they could look at it and they could say, "How are our boys' properties performing at different age ranges versus our girls' properties at different age ranges? And is there something that we need to tweak in our strategy to get more market share in, say, baby, which is a big one, for...

Charlie Liu (24:09)

Mm-hmm. Yeah.

Chad Keller (24:10)

...Disney baby? And our products versus the competition. I mean, is, say, the Princess Pisa baby functioning better than the classic characters baby products, or whatever?" So if you had the attributes, you could do that analysis, right? So I helped them...

Charlie Liu (24:30)

Was it more brand IP, versus... where you had to tag the individual product as well? So you're looking at the type of it, like shirts.

Chad Keller (24:39)

Yes, yes. So as...

Charlie Liu (24:42)

Yeah.

Chad Keller (24:42)

...yeah, yeah, yeah. So it was the individual property or individual brand, down to the lowest level you could go, and then the individual article of what was being sold. So, was it a T-shirt, was it a hat, was it a mug, was it a glass, was it a whatever? And they take all that...

Charlie Liu (25:00)

What year was this, Chad?

Chad Keller (25:02)

Charlie Liu (25:07)

Okay. Okay.

Chad Keller (25:08)

And so all this matrix was put together, right? And my job was just to help as new properties came in, because there's constantly new stuff being created, right? My job was to go in and map it, and be like, "This series of characters is what comes out to be what this thing is that's being sold." And it differentiates this versus this, because this is a hat versus a cap versus a beanie, versus, you know, and you go down all the whatever. And I did that for a while, and I got to work with various different things, including video games. And the person that was in charge of the video game accounting at one point, we helped them on a small project, and she remembered who I was. And like a year later, word got around to me where they said, "Hey, we're gonna have an opening for a job. Are you interested in applying?" And I said, "Sure." Now, here's the fun part. And here's just how, you know, expectations versus reality works, right? So, when you go to school, your college and everything, they're like, you're gonna apply for jobs, you're gonna go through this process, you're...

Charlie Liu (26:20)

Yeah.

Chad Keller (26:20)

...gonna do this stuff. And here you follow the bouncing ball and you will get to this result. Reality sometimes is different. So I go in and I say, "Yep, would you like to have an interview?" "Yes, I would." "When can you be there?" We talk about it. I show up, I have the suit on, the whole nine yards, I sit down and we start talking. I've not applied for a darn thing. We're just talking, right? So I go and we talk, and they decide that I am a pretty nice guy and all that jazz, and they said, "How much accounting experience do you have?" And I said, "Zero." Because I'm honest. I'm like, "Do you know this?"

Charlie Liu (26:56)

Yeah, but at this point, were you studying accounting? Did you know you wanted to get into accounting, finance? Okay. Okay.

Chad Keller (26:59)

Well, I had a business background in college, but I hadn't, like, work experience in accounting, right? And so they're like, "Do you know any accounting?" I'm like, "I know what business school stuff, but it's not like I, you know, whatever," right? And so they said, "Do you wanna do this? It is an accounting job." And I said, "Yeah, let's do it. See what happens," right? Well, turns out I did a really good job, because I wasn't your traditional accounting-background person. I was coming from more of a process standpoint. And so I was looking at how we were doing things and finding efficiencies left and right and really trying to, you know, systemize a lot of things. Right. And so it was like, yeah, I was following the rules of accounting, because that's what I was learning on the job, but really where I was excelling was in the systems of things. And it proved, in the eight years I was there, that's where I was really able to shine: I would be presented a problem, and rather than going, "We need to figure out how to do some marketing accruals, how are we gonna do that? La da da da da," I would kind of deconstruct and be like, "Okay, that's the output we need to get to. How do we think, from the get-go, how we do this most efficiently to get that data into the system, basically?" And so...

Charlie Liu (28:19)

Would you be able to give an example of something that you did? Yeah.

Chad Keller (28:23)

So, for example, I had to go at one point and take over, for the video game division, the marketing accruals, or marketing accounting, for the various video games, right? And that came in a lot of different styles. And the initial instructions were: go talk to the various brand managers and see what they've spent, and then go and, if we haven't already expensed those expenses, then accrue for them, right? Which is the right, that is the textbook answer of what you're supposed to do. Great.

Charlie Liu (28:59)

Mm-hmm.

Chad Keller (29:01)

The reality is they didn't know how, or have any sense of when, the money left the door, right? So I had...

Charlie Liu (29:08)

Yeah.

Chad Keller (29:08)

...to come up with a process to be like, "Okay, tell me everything you did and committed to this month, and then I'll go back and let you know everything that has already been, you know, paid and everything else, and we will agree on the other end of this how much we're gonna therefore accrue this month to fill in the gap," right? Versus just... there was a lot of noise that would otherwise happen, because they'd say, "We did this," and I'd say, "Okay, great, but we've already paid for it. It's already gone or whatever. So we're not gonna accrue for it again and have a whole bunch of, you know, over-accruals and corrections and true-ups and all this stuff." So there was a bit of reengineering the process to help the people at the front end of the process, who were doing these commitments and everything, right, to understand how they needed to give me data, so that I could then true up their data and have the right answer at the end of every month. So...

Charlie Liu (30:08)

I also think most folks outside of accounting finance do not understand accrual. I think trying to expect them to understand it doesn't make sense. I often, especially with smaller firms when I work with them, I go, you should get them to plan by cash. And then you need to figure out some sort of schedule to figure out how to accrue it afterwards. And you get better results and better accountability, 'cause they'll understand it better.

Chad Keller (30:35)

Well, when I work with a lot of the startups, I often will say, "Look, there is a time and place for GAAP accounting, but...

Charlie Liu (30:43)

Uh-huh.

Chad Keller (30:43)

...in the beginning, it is not that time." You need to probably focus on cash accounting and just understand your cash flows, ins and outs, and be in a situation where you're taxed on a cash basis and all that. Keep it, when it's... When you're smaller, keep it simple. And then when the time comes where you're hiring your bookkeepers, you're hiring your accounting teams, you have that at least long-term strategic plan of, "Gee, I would like to sell this or go public one day." Well, okay, well, that comes with converting to GAAP and starting to do an annual audit and starting to think about that long-term exit strategy. That's fine, but you don't have to do that until you're really ready to do that. And if you do it too soon, you might be creating more complications than you might be ready for.

Charlie Liu (31:36)

Yes. Yeah, especially early stage. Folks sometimes get caught up in the things that don't matter. Even though I am coming from accounting finance, actually my background is very similar to yours. I came from data and never actually did an accounting degree. But when I often advise folks, I go, like, leave the legal stuff for later. Just figure out if you can actually get customers, get some cash flow. The accounting...

Chad Keller (32:06)

Right.

Charlie Liu (32:07)

...can, in my opinion, wait six, nine, twelve months. 'Cause sometimes you have all that stuff stood up, but in that time you should have invested all the time to figure out a proper business model and try to figure out if you have a good product or a good service.

Chad Keller (32:24)

I say the exact same thing to people. I'm like, "Look, focus on sales and actually get sales in the door." Because once you have sales in the door, then you can go and take care of some of the more paperwork stuff and all that. You know, as long as you do that generally timely, you're probably gonna...

Charlie Liu (32:44)

Yeah.

Chad Keller (32:44)

...not get in too much trouble. But you don't want to fork over a ton of money to register for this and register for that. Get this going and get your website going. And now you're gonna have this expense, and that expense, and this other expense. And then you gotta pay for all this stuff. And where's the revenue for that? If we didn't already prove out first that you have the revenue that's gonna be able to cover this, well, now you're gonna start making very desperate decisions that you shouldn't make, which step one is to... yes.

Charlie Liu (33:13)

Also time. Like, if you're bookkeeping the first month? No, it makes no sense, right?

Chad Keller (33:18)

Exactly, exactly. You know, I have talked to folks who are a few months into their journey and they're like, "My bookkeeper's telling me I need to become an S Corp," and I'm like, "Are you doing this for you, or are you doing this for your bookkeeper? Because once you become an S Corp, you're gonna have a lot more expenses. You're gonna have to start running a payroll, you're gonna have to start doing...

Charlie Liu (33:42)

Yeah.

Chad Keller (33:42)

...these other regulatory things. Do you have the revenue for that? Or is this something that your bookkeeper thinks would be a great idea?" And I am not saying that that's bad advice in isolation. I'm saying, who's it really benefiting at this time? Is that benefiting you, or is that benefiting the bookkeeper? And if you're not aligned on that, then I don't know that that's the best decision. So get money in the door first.

Charlie Liu (34:09)

Yeah, absolutely. You need to know the why, and you need to know, if you're building a business, where are you going with this? Like, I know a ton of friends where sometimes I get very jealous. I'm like, you have a very comfortable and strong lifestyle business, right? There are decisions that they make that are very different from what we're trying to do here. But Chad, I do want to ask you how you switched over to this, but I want to actually get to the end. Not the end, kind of the rest of the story, how you climbed the corporate ladder. So you got into accounting, and it's very process-driven. I'm hearing this over and over again. I actually get a lot of accounting grads asking me for guidance, and I often tell them: think in process, try to build a systems-thinking muscle, especially in this AI age, and talk to the rest of the business, understand operations. That way, when you come to accounting and come back to the numbers in the books, it actually makes sense to you.

Chad Keller (35:10)

Yeah. Amen. I think one of the biggest mistakes I see people in accounting and finance make is they don't sort of throw themselves into the deep end of the business that they are in. They skirt the edges, and they go, "I just care about worrying about the margin for this," or "I just want a fancy report that'll show this KPI." It's like, those are all nice things, but what does the business really mean? And how does that fit in your business? You know, there are businesses out there that can have tremendously large balances of unbilled AR, which in some cases you would look at that and go, "My God, what a huge risk, what a huge issue." And then in other situations you'd be like, "That's standard for this industry." And if...

Charlie Liu (36:07)

Uh-huh.

Chad Keller (36:07)

...you're just a blind accountant coming in saying, "Hi, AR bad," well, you need to look at it under the context of, "But what are the norms of this business?" Maybe that isn't as bad. Maybe it's got some nuance to it that can matter. So I say all the time to my accounting and finance brethren, it's like, nobody cares about your cute report or your whatever. You have to understand the underlying business. You have to... stay away from the jargon of accounting and finance. Like, one of the first things I learned at Disney was to stop using the word "accrue," because no one understood what "accrue" meant, right? So it was like, okay, let's just talk about what you've done, and what is this expense, and why are you spending that? Does that make sense to spend that much on packaging design? Does it make that much sense to spend that money on this TV campaign? You know, and okay, fine, you did it, or okay, you spent this many millions of dollars on a media plan. Great. Is that normal? Is that an outlier? Why is that an outlier? Let's talk about that piece of the pie before we just go and blindly, "This is what they told me." No, but why? Like, this is a temp pole movie and this is a temp pole property, and so we really want to make sure that we're driving extra attention to our games and things. Then it would make sense to be an outlier. If it's just someone copy-pasted a template from another project that was maybe not so great, and they wanted to juice up the numbers, like, well, why are you doing that? I mean, there needs to be a good partnership on a regular basis between those that are running the business and those that are tracking the business. And I have always been a big proponent of it is a partnership. It is a... the best people that do what we do are those that really, really bridge the gap and help folks that are running the business understand what they're doing, understand, you know, you have severe cash issues. Well, let's talk about that. That's not an accounting problem or a finance problem. That's a business problem. And if you turn to your CFO and say, "My God, I gotta fix my cash problem," well, or "You have to fix our cash problem." Like, no, we need to fix our cash problem. And sometimes the folks get that that's all finance, accounting, I don't need to worry about that. No, no, no, you need to worry about that.

Charlie Liu (38:53)

No. A good business has strong business partnering. You have to be aligned. It's not divided. I'm seeing a lot of companies that split revenue and FP&A now, and I sometimes go, "Hey, that's revenue's problem." I don't think it's the right mindset. I think you're fully spot on. I also think... I do think some people care about pretty reports, but that's not what's important. But some people do care for it. And I think what's happening now is a lot of the AI is producing phenomenal-looking reports. And people aren't sitting there understanding the business and the numbers enough. And there's a lot of risk with it as well. Chad, what I'm really curious about is actually learning, as somebody in finance and doing accounting in your industry, how did you model and plan out these investments or assets or brands that you're either building or acquiring, because some of them have incredible, kind of lifetime value that they keep providing. How did you model and make these decisions around it?

Chad Keller (40:05)

It varies a lot, but I think that's one of the beauties of AI these days, especially these days, right? Where you can go and say, "Hi, I'm thinking about, I have a brand-new brand I'm gonna, you...

Charlie Liu (40:18)

Yeah.

Chad Keller (40:18)

...know, do. Give me some good examples of templates that I can use as a base case to play around with." And I think that's one of the best uses of AI in general in the wonderful, wonderful world of finance, is simply... I think oftentimes people will use AI to just give me the answer. No, it gives you the beginning of the answer. And then you can say, "Well, where'd you get that? Show me that. Let's talk about that. Why does that work?" Whatever, right? And in the past, you would have to go and comp things against your competition. You'd have to comp things against your other previous titles of properties in-house that you might have had, right? And be like, historically this Power Ranger show would be able to be sold for this much per episode, and we'd typically be able to get this much in a royalty selling toys or whatever, right? Cool. You have your own internal stuff. Great. Then you can model that out easy, fine. Whatever. And you could make some assumptions, potentially, if you acquired another boys' action brand in your same company...

Charlie Liu (41:27)

Uh-huh.

Chad Keller (41:28)

...and say, "Okay, how much of this could we kind of use as a starting point with our internal metrics to make another boys' brand to sell other things, whatever. Could we make as much? Does it have the same footprint, all that..."

Charlie Liu (41:43)

What were the main KPIs and drivers in that universe?

Chad Keller (41:49)

They would vary.

Charlie Liu (41:52)

I can imagine.

Chad Keller (41:54)

One of the bigger ones on the Power Ranger side of things was the ratings and the views that we would get, right? That was...

Charlie Liu (42:12)

Yeah.

Chad Keller (42:12)

...critically important, because it would help to drive kind of how...

Charlie Liu (42:14)

The ratings? I can see views for sure. What do you mean by the ratings?

Chad Keller (42:19)

Like the Nielsen ratings?

Charlie Liu (42:22)

And that, okay, I can see that impacting in a different way. Yeah. Yeah.

Chad Keller (42:24)

Which is basically viewership, right? Yeah. 'Cause that would drive, you know, a lot of decision-making, and then doing, copying that against, say, how you might price other shows and whatever that are similar but don't have as much reach or...

Charlie Liu (42:41)

Mm-hmm.

Chad Keller (42:42)

...or whatever. Especially if you're selling to the same network, so you know they know the same data points or whatever. So that would, you know, obviously drive up what you might be able to do on something like that. On a royalty perspective, we would look at both the initial royalty that we could get, based on, you know, historicals, and by, you know, is it toys, is it hats, shirts, whatever. And then we'd also have to factor in back-end participations, such as, if you aired a show on a big broadcaster, typically they wanted a piece of that merch action. And so you'd have to factor in the lifetime profitability of a given property to not only look at how much you're getting on the media fees you're selling or the merch sales you're doing, but you also have these huge back-end participations you're having to factor in, plus potentially, for, like, union shows, potentially actors and cast and crew fees and participations for certain other types of things. So you start to look at, or, Writers Guild fees or things like that. You start to look at all these components that really begin to make up what that main model is, by property.

Charlie Liu (44:15)

When you were doing this, was it more of a one-time budget, or was there a rolling forecast? The reason I ask is I feel like how a show or brand performs can change drastically, and you just can't capture that in a once-a-year budget exercise.

Chad Keller (44:38)

What Saban did, which I felt was one of the best ways to do this, was this. They would do, first, you know, LRP, and have several years of, like, three or five years out, depending, of just an initial LRP, with the...

Charlie Liu (44:57)

Mm-hmm.

Chad Keller (44:58)

...current year's new budget that they would do on an annual basis. And then we would do revised budgets, which were basically updated forecasts, every three months or so. And that was useful because we would never change the original budget. And I've seen some situations in some companies where people want to change the original budget, and I always cringe when I hear that. It's like, no, no, no. Your budget's your budget. Just, I don't care if it's wrong. We all know it's wrong. Your revised forecast can be your updated expectations. That's fine. But never change that original budget. There's so much that gets lost, I argue, even if...

Charlie Liu (45:38)

Yeah.

Chad Keller (45:39)

...the intent is benign, to...

Charlie Liu (45:42)

Yeah.

Chad Keller (45:43)

...like, "This is... throw this away. This is crap." Even in that crap, there's gonna be nuggets that you're gonna want to be able to reference and think about later on. Maybe it's, you know, "Man, we really did screw that up." Yeah, well, yeah, fine. But if you just throw away everything and you never ever look at it again, then you are losing out on potential opportunities to really see some insights that you would otherwise not be looking at. I know that there's a human desire to not want to look at something that sucks, you know? Like, "Yeah, I don't want to look at that budget. It's out of date. And every time I look at it, it says we're losing 50% versus budget." Yeah, you're right. But...

Charlie Liu (46:26)

We need to be comfortable with reality, right? One of the things I think a lot of companies should be doing, and they're not doing it, is just budget versus forecast. And then comparing what your initial strategy or goals are. So you have the accountability, and then comparing against what things have changed. Chad, this is...

Chad Keller (46:44)

You gotta do all three.

Charlie Liu (46:46)

Yes, absolutely. Of course you can't leave actuals out of it, right? But Chad...

Chad Keller (46:49)

Yeah.

Charlie Liu (46:50)

...apologies. We are kind of coming down to time. I feel like next time we do this, I probably have to block two hours. I do want everyone to hear your two cents advice, which is where we try to end every episode. What is your two cent advice for the audience?

Chad Keller (47:08)

I'm a guy that likes to make lots of little phrases for things. And so I make a lot of these that are hokey or whatever, but I swear they're relevant. So one is: get comfortable being uncomfortable. Especially in...

Charlie Liu (47:24)

I love that. I love...

Chad Keller (47:25)

...today's generations that are coming out of college, where they're being thrust into a world where AI is changing things every day and whatever. Look. You're not gonna know everything. Everybody, if we're all being honest, everybody knows you don't know everything, and they don't either, and that's okay. And stop doing this performative thing of, "Look at me, I'm more amazing than you think I am." No, everybody knows, right? So just be comfortable knowing what you know...

Charlie Liu (47:57)

Embrace it.

Chad Keller (47:58)

...knowing... be comfortable with the uncertainties of working and life and everything else, and it'll all work itself out. Don't be too hard on yourself because you don't feel like you have a solid enough foundation to make good decisions, whatever the case may be. The other thing I would just say, in that same vein of sayings and whatnot, is: action always beats inaction. So...

Charlie Liu (48:30)

Yes.

Chad Keller (48:31)

...you know, it's amazing that taking that first step, whatever it is, is so much more valuable than endless planning. I mean, you don't wanna not plan for something and then screw something up or whatever, but analysis paralysis is a thing, and procrastination is a thing, and so...

Charlie Liu (48:50)

It is absolutely a thing. There's a line I love, which is... be patient with... one sec, I know this. Be patient with results, but impatient with action. So...

Chad Keller (49:01)

Yes. Yeah.

Charlie Liu (49:03)

...I love that. And I know these kinds of quotes do help. Chad, apologies, I do have to close this one and wrap this up, but this is a lot of fun. Definitely want to shoot back as soon as possible. We'll definitely have a longer session next time as well. Clearly an hour is not enough for us.

Chad Keller (49:21)

Thank you.

Charlie Liu (49:20)

Thank you so much. Appreciate it, Chad.

Chad Keller (49:22)

Thank you. Have a great one.

Charlie Liu (49:27)

Awesome. Thanks, Chad. I do gotta run. I'm gonna reach out. Thank you so much. Let's catch up soon. Just, just catch up.

Chad Keller (49:34)

For sure.

Charlie Liu (49:34)

And I'd love to see how you're doing next time. Thank you so much for this. I'll talk to you soon. Take care, Chad. Cheers. Ciao. Bye.

Chad Keller (49:39)

Have a great one. Bye.