Marita Scarfi recently joined PebblePost as CFO following a CFO role at 72andSunny and CFO, COO and CEO roles at Organic. PebblePost invented programmatic direct mail and personalizes digital-to-direct mail campaigns based out of New York City.
The biggest mistake I made early on was around real estate.
The company I was at [Organic] was going through some massive growth. We looked ahead and thought we needed space for all the thousands of people we were going to hire. So, we locked into real estate deals that were large in size as well as about 10-15 years long. And then we went public in February of 2000. The market crashed in April.
We were a professional services company so at that point we started to have to layoff people, but the real estate was still around. It became a serious situation, where the company almost filed for bankruptcy because of real estate obligations. We were able to downsize labor, but having hundreds of millions of dollars locked up in real estate was challenging. We were running out of cash effectively funding our real estate leases.
So the worry for me was, what is the right balance that we want to have? How do you create a flexible financial structure? How do we not lock into things that far out? And if you do, for whatever reason, how much risk are you putting the company in, in doing that, if you don’t have that level of visibility?
In any company that’s going through growth, typically you don’t have long-term visibility.
I’m always focused on the forecast.
You always have to be flexible. You just need to be constantly flexible, open and realistic.
At PebblePost we’re looking at how to maximize our space in New York. We’re bringing in a design consultant to look at the space and create more maximum capacity.
The big turning point for me was really about making sure to always be forecasting the business. To look out as far as you can on the horizon to see what’s coming down so that you have time to plan and adjust. I’m always focused on the forecast.
Laying off people is the worst thing I’ve had to do in my job. These are people’s lives, families are impacted. Running a business isn’t just about numbers, it’s about the people’s lives that you impact.
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Photo courtesy of Marita Scarfi