This episode features an interview with Nitesh Sharan, CFO at Soundhound, the innovator in voice-enabled AI and conversational intelligence technologies. Nitesh has over 25 years of experience in financial leadership roles. He spent nearly 15 of those at Hewlett Packard where he rose to be Vice President and Assistant Treasurer. And prior to Soundhound, Nitesh served as Nike’s CFO of Global Operations an0d Technology. On this episode, Nitesh discusses the preparation for going public during the pandemic, how to protect your company’s finances during uncertain times, and how conversational voice AI will play a transformative role in everything from education to the food industry and more.
This episode features an interview with Nitesh Sharan, CFO at Soundhound, the innovator in voice-enabled AI and conversational intelligence technologies.
Nitesh has over 25 years of experience in financial leadership roles. He spent nearly 15 of those at Hewlett Packard where he rose to be Vice President and Assistant Treasurer. And prior to Soundhound, Nitesh served as Nike’s CFO of Global Operations an0d Technology.
On this episode, Nitesh discusses the preparation for going public during the pandemic, how to protect your company’s finances during uncertain times, and how conversational voice AI will play a transformative role in everything from education to the food industry and more.
Quotes
*”One of the things that is a benefit of being a CFO is you have that agnostic view. You look at the numbers for what they are. You understand what drives growth and profitability. Presumably the CFO has a very acute sense of what investors are looking for, what shareholders are demanding and tying those things together in some kind of numeric, metric-based view. It’s very valuable to the company when they are deciding [whether to] invest and go to market, or invest in engineering or whatever capabilities they are trying to allocate resources against. So I think one of the most important things for CFOs is being able to understand the true variables that drive value in the company. and then going and allocating resources heavily against the ones that matter most. And making the harder decisions to move away from the ones that don't. And over time, those things change. And so just staying persistently in the details to understand how those things change is really important.”
*”Different is good, and challenge is good. I reflect back on my career and say I grew the most in the most challenging times.”
*”We see continuously, particularly in the tech industry, how independent players are able to succeed in different verticals against, in many cases, the big tech who have unlimited resources. Because with laser focused resources, attention, having everybody row in the same direction, there's a lot that can be done, even with a smaller wallet.”
*”Even as we build our teams, we emphasize the person who can do more with less, and bring great tools. So whether it's in our planning software, leveraging some great planning tools out there, leveraging technology to make it more efficient to do our SEC filings or whether it's on the treasury side, to navigate, improvements in our cost of payments because we're managing international payment flows, and the foreign exchange friction can be significant if not done thoughtfully.”
*”Invest in technology today. It helps you scale much more rapidly with the thinner team. And the output's much better.”
*”We're solving long-term solutions for how humans interact with technology. And so we're staying committed to that long-term vision, and yet we're sharpening focus, if anything. And that's what great companies need to be doing, which is when the world pivots a certain way, stay true to the long term vision, but just get sharper, get greater attention on things that matter most and keep sharpening that pencil.”
Time Stamps
[2:17] Nitesh’s path to CFO
[15:17] The future of conversational voice AI
[18:03] Cash Crossroads: How SoundHound leverages technology to drive growth
[27:10] The Playbook: Finance Strategy at SoundHound
[35:31] How SoundHound went public during the pandemic
[41:43] Quick Hits: Rapid fire questions with Nitesh Sharan
Sponsor
The Invisible Vault is powered by the team at Kyriba, the global leader in cloud treasury and finance solutions, empowering CFOs and their teams to transform how they activate liquidity as a dynamic, real-time vehicle for growth and value creation. To learn more visit www.kyriba.com
Links
Connect with Nitesh on LinkedIn
Connect with Daniel on LinkedIn
Nitesh Sharan: We're solving long term. solutions for how humans interact with technology here. And so we're staying committed to that long term vision, and yet we're sharpening focus, if anything, you know, And that's what great companies need to be doing, which is when the world pivots a certain way, stay true to the long term vision, but just get sharper, get greater attention on things that matter most and keep sharpening that pencil.
Narrator: Hello and welcome to The Invisible Vault.
This episode features an interview with Nitesh Sharan, CFO at Soundhound, the innovator in voice-enabled AI and conversational intelligence technologies.
Nitesh has over 25 years of experience in financial leadership roles. He spent nearly 15 of those at Hewlett Packard where he rose to be Vice President and Assistant Treasurer. And prior to Soundhound, Nitesh served as Nike’s CFO of Global Operations an0d Technology.
On this episode, Nitesh discusses the preparation for going public during the pandemic, how to protect your company’s finances during uncertain times, and how conversational voice AI will play a transformative role in everything from education to the food industry and more.
But before we get into it, here’s a brief word from our sponsor…
Narrator: So please enjoy this interview with Nitesh Sharan, CFO at Soundhound, and your host, Daniel Shaffer.
Daniel Shaffer: Hi, and welcome again to The Invisible Vault. My name is Daniel Shaffer. I'm your host. Today I have the pleasure of working with and talking to Nitesh Sharan, the CFO of Soundhound. Nitesh, welcome to the Invisible Vault.
Nitesh Sharan: Thanks for having me, Daniel.
Daniel Shaffer: Well, it's a real pleasure to have you join the Invisible Vault podcast. You know, we spend a little bit of time hearing about you and your background. Uh, we're really interested to learn a lot about Nike. Uh, big fan myself. I see you wearing the logo today. Uh, but also kind of why finance, you know, what brought you into becoming a CFO? What was it that really excited you about that pathway. And then we'll dive into some other questions around technology, data, kind of the vision for the CFO today.
Nitesh Sharan: Well, I always gravitated to numbers. Um, you know, my affinity was more on the math side than the science side, but openly my father wanted me to be a doctor, so I tried that path early on in college, and I think my C in Bio 101 quickly kind of indicated that's probably not the path for me. So, um, I pivoted. so I, I focused in finance, um, but I also knew I wanted to go and get my business degree and get my MBA and, um, one of the feeder industries to do that was consulting. So actually I started my career in consulting, did that for a few years. Um, and then after business school I kind of then full pivoted into corporate finance. So, um, I think it was a little bit of a circuitous route, but, uh, I think even from an early age, I kind of had an affinity towards the area.
Daniel Shaffer: So in terms of consulting, were you working with large enterprise or, uh, midsize? What was your real focus area?
Nitesh Sharan: So I'm from the Midwest. I grew up in Ohio, uh, originally from India, but came when I was very young. And, um, in Ohio at the time when I graduated, uh, it was sort of one of the early cycles of, uh, the steel manufacturing kind of really pivoting away from the U.S., although that, that trend had been going on for a while. So I was at what was then known as Anderson Consulting, now, Accenture. Uh, it was the mid nineties, late nineties where, you know, the.com boom and technology was really disrupting and certainly industrials, uh, were getting disrupted not just because of tech, but because of, uh, just the transition of, of resourcing industries to other parts of the world and, and steel going to asia and, and other parts was particularly. Um, so my actually focus was really on the industrials and I had great opportunity to work across steel, auto, um, chemicals, uh, oil and gas for a number of years, and, um, got an opportunity to travel around the world and try different things and, uh, learned a lot. Uh, Openly, one of the things that wasn't attractive to me about it, although I loved the learning, the growth, uh, was just that you're in a client for a bit, then you move on to another one, you move on to another one, and, uh, sticking to something for a longer period of time was something I looked for after, uh, business school.
Daniel Shaffer: Yeah. It sounds like the speed and velocity of adapting to and understanding your client and then what their needs are. Was pretty quick for you, so you really didn't have a deeper emotional connection to it, or maybe even a philosophical interest in why you're doing what you're doing. And what I'm finding really is that CFOs are very purpose driven. They love the data, but they also have kind of an internal North Star about why what they're doing is meaningful to them. Um, was there anything, uh, that started you off on a path to enabling fast growth companies or unlocking opportunities, even as a consultant at Accenture? What was that? Was there a mentor perhaps, or how did you go down the path of really helping companies grow?
Nitesh Sharan: I ended up moving to Hewlett Packard and I stayed there for 15 years before moving to Nike. Uh, and I stayed at HP probably longer than I thought I would, and I attribute it mainly to just the people I grew up under. So, to your question on mentors, I had a lot of them, a lot of great, um, just people that I learned from. And, um, I had a lot of pride, actually interned with HP when I was doing my bachelors, Went to consulting, ended up going back to HP, predominantly because I valued the culture It's a company that even a lot of the culture that emanates through Silicon Valley today, a lot of its roots are in some of the founding Silicon Valley companies like HP. And, um, it was one of respect, you know, managed by objective, um, you know, team collaboration and that sort of probably what more anchored me than I'd say even this like direction of growth early on. And like I said, because I had great mentors and I really enjoyed, um, working with them, I just have been through so many complex transactional experiences, uh, that helped me grow and prosper. I stuck through 'em and persevered because I learned from great people. So I'll always sort of attribute that as my first, uh, reason for sticking to companies for a long time. To get to your question on growth, I think it is the experiences that I felt over 20 years as much as I, um, felt a ton of pride for growing up at the likes of the Hewlett Packard. I do think in some ways they're an example of how innovators dilemma and sort of incumbency players are continuously challenged, especially in this last generation of how tech companies in particular have been able to extend their reach and quickly scale and completely transform how people interact with technology. And I do think in one frame, my 15 years at HP, I, I saw that riding with tailwinds is very important. Um, what I mean by that is in as much as HP was an iconic, uh, behemoth tech player, I think arguments could be made that they were slow to attack the internet opportunity. They were a little slower to attack the mobile revolution and I think even in cloud computing. Um, and so what made me kind of come to terms with really staying with tailwinds, going where growth is, is really important. And frankly, I think we see over and over again in many companies that being able to, uh, sort of ride a wave and help catalyze that, um, you know, I, I just had this nagging, persistent sort of experience set that said, go to where the trends are. And I'll jump ahead to sort of when I ended up making the decision, the very difficult decision to leave Nike, uh, it was largely being attracted to moving to one of those spaces in artificial intelligence in our case, where I just believe it's gonna completely change how the world works and operates for the next know, generation.
Daniel Shaffer: Well, there, there's a lot to talk about there. So let's take a moment to also kind of reflect on what is your position. Um, I mean, Nitesh, how are CFOs really the strategic partners to the business? It sounds like there's, you mentioned from HP the idea of respect, comradery, and uh, collaboration. How does that fit into the strategic partnership to the business as a CFO?
Nitesh Sharan: I look at, uh, cycles and I not gonna pretend that I study this or I'm, some expert in this area, but I do think we've seen historically that there are different backgrounds of finance professionals that end up, uh, penetrating into the CFOuh, seat. And maybe in generations past, it was heavier on the accounting side. And then it would move to, um, you know, the treasury path and then it would go to, the business finance and FP and A like, there would be different times where, uh, certain skills were required more than others. I believe more and more what we're seeing these days is that strategic partner who really understands the business value drivers. You know, one of the things that uh, really, uh, is a benefit of being a CFO is you sort of have that agnostic view. You kind of look at the numbers for what they are. Uh, you understand what drives growth and profitability. Presumably the CFO has a very acute sense of what investors are looking for, what shareholders are demanding and tying those things together in some kind of numeric, metric based, uh, view is very valuable to the company when companies are deciding before should I invest and go to market, or I should invest in engineering or whatever, capabilities are trying to allocate resources against. So I think one of the most important things, uh, for CFOs is being able to understand the true variables that drive value in the company. and then going and, and allocating resources heavily against the ones that matter most. And making the harder decisions to move away from the ones that don't. And over time, those things change. And so just staying sort of persistently in the details to understand, uh, how those things change is really important. So back to your question on how does that tie into team and collaboration and respect and all those things? I think they very much do because numbers are, you know, only as good as, the output is only as good as the input. And the input is synthesized based on collaborative understanding from others who are experts across the function. I don't ever claim to say like, I really understand this investment and this technology's going to yield this return. I have to talk to engineering partners to understand the nuances there. You have to connect that to market opportunity. And hear what the sales team's hearing on the ground when they're talking to customers. Uh, so you have to connect a lot of dots. And I think a collaborative sort of team based environment facilitates that very well.
Daniel Shaffer: Well, that's great. We're hearing so much about the human factor, uh, from CFOs on the Invisible Vault, and, uh, similarly coming from you, no surprise, Nitesh, that, uh, that collaboration is important, that FaceTime or the Zoom time, however it may be best play out. As you transition from this very massive, you know, global organization with tons of resources, one would assume the kind of, uh, idle cash was plentiful at Nike. Um, even today though, with all of the impacts that we're seeing to the economics, uh, the global economy volatility, um, resources have changed and they change also depending on the size of the company. So just having that as backdrop, tell me how does Soundhound kind of really look towards, um, cash forecasting and having a really thoughtful and programmatic, pragmatic view of allocating those resources?
Nitesh Sharan: So I'll touch on a couple things cuz you kind of highlighted the beginning. The difference between the plentifuls of big mega cap companies to the, scarcity that we see in smaller companies, particularly in what we've seen over the past year. Uh, and then I'll address the cash forecasting element at the end. I'll start with this principle. Why I was so excited to jump and why I'm just loving the opportunity that, uh, I've been in now for over a year. Um, first is I do believe different is good. Even when I was at HP for 15 years and Nike for five plus years, I made it a point to kind of try different things and learn different things. So I think different is good, and I think challenge is good. I definitely reflect back on my career and say I grew the most in the most challenging times. And so I think for, whether it's just personal growth and learning or I think it's, uh, because I, feel a greater, uh, sense of making a difference. I, uh, have always gravitated towards, uh, an affinity to that different and that challenge. And, uh, certainly coming at a company that is hyper growth, massive upside opportunity, but more limited resources going public in a year where very few are going public trying to navigate to your question, the cash flow and liquidity management, when that is much greater concern than sitting on a, you know, several billion dollars of cash, or 10 billion plus of cash. Um, I think one thing is it just requires greater focus. There's not a lot of time for the extra stuff. Um, and that, that's sharpening, that's great. That's actually why we see continuously, particularly in the tech industry, independent, uh, players, how they're able to succeed in, different, um, verticals against, in, in many cases, the big tech who have unlimited resources is because with laser focused, uh, resources, attention, having everybody row in the same directions, uh, there's a lot that can be done, uh, even with a smaller wallet. Um, and I also think, uh, the other thing that I am super excited about being at Soundhound is it's, it's a little bit of a different mindset and DNA that's required in a build focus versus a maintain focus. And I think, by the way, you know, you'll never hear me say anything negative of Nike and HP, cuz I think there's just most iconic institutions out there. Uh, but what I really love about Soundhound is that it is really building and transforming, uh, how we believe humans will interact with technology in the future. Uh, conversational voice AI is, is what we do. Um, and we think more and more that technology is now at a place where humans will interact more naturally through natural conversations like you and I are having with technology. And that will just make the world a better place. And so, that is what we are aggressively going after is that complete shift. And it's not maintaining any existing profit pools. It's really going after, uh, what we see as a tremendous opportunity.
Daniel Shaffer: I know that that's an exciting point. I know that, um, some people learn differently. I'm one of my, uh, children actually has a, just a different learning, uh, aptitude. He's incredibly smart. Very good at math, but for some reason the spoken word sticks to more and he's able to think more clearly out loud than he is if you ask him to sit down and write something down. So I think that even just at a fundamental level, It seems like there's an immense amount of opportunity for learning, let alone just accelerating, uh, time of day for, you know, that hunting and poking that you might do if you're typing something out. So lots of, um, opportunity there. Do you wanna share maybe some of where you're seeing this technology going and how Soundhound is driving that change?
Nitesh Sharan: Yeah, I'd love to, I'll start with, uh, just amplifying your point, which is that, uh, reality is one of the reasons humans are so powerful is because we intermix a lot of different ways of engagement with the environment around us. We do it through sight, we do it through touch, we do it through speaking and hearing and, really technology has been limited in its capacity to interact with humans. Touch and typing now is sort of like, you know, swipe or whatever is a little bit of the MO for the last decade or so, but we're bringing this voice to bear, which does expand the universe of ways we interact with technology. So, uh, one of the areas that we're already, uh, well penetrated is in the auto sector. So, that's a safety measure. And too many people still are driving and fumbling with their phone and texting or whatnot. And, obviously that's safety issue and, and being able to more seamlessly just, uh, talk to your car and, and help, you know, either turn on the controls internally or access, you know, directions or call your mother, whatever that is, voice is an enabler that can be very meaningful and, and important. Uh, but you're seeing that not just in, cars, but billions of devices. IoT is aggressively penetrating across a number of different areas. And one of the benefits of voice AI is you don't need a, a gooey interface or a keyboard or a mouse to unlock it. You just need a small, inexpensive microphone. And so we see that the world is moving, you know, there's a data points out there that we're gonna have 75 billion IoT devices in the next several years, and that compares to maybe 8 billion smartphones. And so you can imagine this, the pervasiveness of opportunity to speak to products all over the world. We're also voice enabling services. So one of the areas we're particularly focused on now is food ordering. And so you can envision in an environment like we've seen over the last year where there are significant labor pressures and also cost pressures, uh, for restaurants who are already thin on margins. The ability to have, uh, technology pick up the phone on the other end to take your to order. And one of the reasons why our technology is so well suited for it is because versus maybe what historically people are used to, where you're almost like talking to a toddler or even less than a toddler with very simple instructions, our technology allows for more complicated compound queries with, you know, exclusions. So for example, you know, you may want a hamburger without ketchup. Like you precisely want to what you want, You don't want anything you're saying you want it without pickles and, and ketchup. Uh, a lot of the technologies don't enable that. Uh, but we do, And so food ordering's one space where we're seeing a lot of traction. And then to your point, the accessibility for learning, the accessibility for a lot of opportunities. There's just, once your mind starts thinking about the applications, there's really an infinite amount of permutations. and I really think it can be expanding in terms of access and so forth. Uh, there's a long runway ahead, and again, that's why I'm so excited this build, there's no dirth of opportunities, but we have to be very thoughtful about utilizing the, the limited resources and being thoughtful of making progress, then before moving on to the next and so forth. And, and that's the journey we're on.
Daniel Shaffer: Oh, it's very exciting. Thank you for sharing that. Soundhound has a lot of upward, uh, growth opportunity and a tremendous amount of really social good. Um, in addition to that being an application that helps people learn, grow, and interface with the world around them. So thanks for sharing that information, Nitesh. Let's move on to our next segment, which we call the Cash Crossroads. So Nitesh, in this section of our Invisible Vault podcast, we really wanna talk about your vision for technology, not necessarily at Soundhound, but as a CFO in a fast growth company. Uh, one that, as you've said, is, going public, which is very exciting. Again, congratulations. What is your technology vision? How do you really leverage technology? Um, in your organization or in general to help your company grow?
Nitesh Sharan: I think of technology as an amplifier, as an enabler, and, um, the best, uh, pathway is sort of when that comes together with process and with people, to build the best solutions. And the journey I've been on in a year, uh, here has been building the finance function to scale as a public company to help the company grow. And the best way, in my view, also with just the backdrop of it has been, um, you know, and I'm super excited, we've built a great team here and, uh, every individual hire has been phenomenal. Uh, but it's been hard. It's a hard environment to find great talent. And, uh, I also think as we scale as a company, uh, I do that with, uh, people and technology, uh, vision together, meaning, uh, if I can get really great people who understand best in class technology and bring that best in class technology to bear with it, whichever function it is, and it actually applies across all functions, whether that's the accounting function or the planning function or treasury or, uh, you know, any of them, um, you really wanna do it together. So, uh, I think both from speed and cost and efficiency standpoint, but, but even more so in terms of bringing valuable, uh, insights, business insights that enable us to, uh, again, allocate limited resources in the most impactful area so that we can generate the greatest return and reinvest those back. Um, so to me the most important thing is both. It's not just a tech vision on its own. It's really a collective synchronized people and tech, um, vision together.
Daniel Shaffer: So you talked about the innovator's dilemma. Um, I'm just curious if that resonates as a kind of a driving force when you're thinking about technology innovation and investing in technology to get you over that hump.
Nitesh Sharan: Yeah, I see that play out, um, I mean the histories not just in technology, but industries all over is really that which is, uh, those who, get to scale and impact, uh, they generate so much in terms of revenue and even profit, uh, from, you know, strong market positions, that it does take a uniquely disruptive viewpoint to wanna disrupt an existing profit pool because it's very uncertain when change happens. And sometimes it seems like it's happening glacially, and then all of a sudden it just accelerates really rapidly. We see that in so many areas of life. Um, and I think the innovator's dilemma is, uh, one thing that, you know, a disruptive company like us actually can take advantage of, which is there's a lot of players out there who have incumbent pools. I think in our space we see legacy providers and we have customers who come to us who are basically saying, you know, I'm looking for an alternative. Uh, the solution that I have that's been there for a while is dated. The technology's not evolving fast enough. My customers aren't happy with it, and the provider is inflexible and expensive. it's a story that plays out continuously. And that's one end of the spectrum. And then the other end of the spectrum openly is, uh, providers who provide voice AI on the side. And a lot of the big techs I put in, that category where, you know, they have core profit pools that they dominate in. And a lot of their, uh, ancillary businesses really are, how do we amplify and keep protecting or building that profit pool. And so, um, that is again, why you see so many independent, uh, companies come in and every big company today was once a small company and did the same thing to an incumbent player. And so we definitely think that when you think about investment, that's a story that we can tell compellingly. And for us to be able to tell it in a compelling manner externally, we have to live it and breathe it internally. So I also look at that and building the function out. I'm bringing people who understand scale and to scale, the best way is you have technology that you scale with because then you don't need to hire the 15 people. You can hopefully do it with the five and leverage the technology. So that's, that's definitely how I'm about things.
Daniel Shaffer: That's great. I'm hearing this Soundhound, uh, is incredibly innovative in thinking about, um, collaborating with teams in order to bring the most differentiating, um, product to market, but then also sharing with your clients, you know, some of the areas in the world where that product actually is disruptive and becomes a competitive, um, advantage. I think from a CFO's perspective, Nitesh, I'm also interested in hearing how you leverage finance technology to unlock, uh, opportunities at your organization. It sounds like there's a lot of parallel tracks in terms of thinking when you're looking at, for example, APIs and really getting that full picture of data, uh, in order to better manage your cash and liquidity. Are you seeing that as an imperative in today's fast moving, uh, financial market?
Nitesh Sharan: Yeah, absolutely. We, again, across all of my sub-functions, I feel like we're going with first hire grea people and then the great people with the sort of bent between, uh, both the financial depth, but also the systems expertise. You know, we're bringing in tools to support in each area, and I've seen, a greater emphasis in finance professionals where I have personally, and I know many of my peers have, uh, emphasized people who have that great intersection of financial expertise, but also systems and tools. And even as we build our teams, we sort of emphasize the person who can do more with less in a way, and bring great tools. So whether it's in our planning software, um, leveraging some great planning tools out there, whether it's, again, leveraging, uh, technology to, make it more efficient to do our SEC filings or whether it's on the treasury side, to navigate, you know, improvements in our cost of payments because we're managing international payment flows and, the foreign exchange, uh, friction can be significant if not done thoughtfully. Uh, so end to end, we really look at technology and platforms to help us improve our processes and definitely is a big area of focus. I will also say that back to this point of how it can be an efficiency driver. Um, you know, because we are limited in resources, I want every incremental dollar that we have or whatever I can squeeze the most out of there, to go towards helping catalyze our growth. And I mentioned sort of, for example, for us, this food ordering area is a tremendous opportunity and it gives us focus and we're such a great product market fit. I want every incremental dollar to help serve and, help us scale quickly in that. So that means I kind of wanna minimize as much as I don't want my team to hear this too much, but they understand that I wanna minimize the amount of capital I'm putting into the finance function. And you can't do that with a sort of just current year view, it has to be a multi-year view, and that's where technology can really play it, you know, invest in technology today. It helps you scale much more rapidly with the thinner team. And the output's much better. You know, repetitive data that is reliable, that's real time, that's accessible. Um, those are things that matter very much. And if you have set the foundation with technology, then you're not worried about attrition and those types of things kind of impacting it. Hopefully the report comes regularly and, so those are some of the elements that we look at.
Daniel Shaffer: At a high level, you know, you're, you're in a really competitive market right now. Um, a lot of the investment dollars we've seen in the news, have decreased, uh, quite frankly. people are holding back a little bit, maybe being a little more, uh, risk averse than usual. Um, but Soundhound and, and you and your team were able to tell a story, were able to bring that data to bear in a convincing and compelling way. Was there an element of a dashboard effect or an integration of, your data. I mean, what were the real KPIs that maybe technology helped you tell that narrative so that you were successful in your IPO?
Nitesh Sharan: The big opportunity again as we spoke about earlier, when you hear about voice and when you see our technology at work, you quickly, can envision, where this can go in the applications. And so I don't think it's a very hard pitch for people to understand how voice can make and conversational voice AI can make, uh, interactions with technology better, uh, and more available to more people and help scale on multiple applications. Uh, for us, what was really important is being able to extract sort of the momentum of our business and share that with, uh, the public investment community. And, uh, we did that by really diving deep on, uh, the customer contracts, you know, our cumulative bookings backlog. We have hundreds of millions of cumulative bookings backlog and understanding, you know, we needed to get inside each of those contracts and understand the complex, uh, software revenue recognition rules are complicated and understanding each individual contract and how that plays out. There were many contracts where we got cash up front and the revenue was just gonna amortize over the life of the contract. And there were other ones where there were licensed royalty base that would build over time. And what was important for us was to synthesize that message. And so we did leverage technology along with really smart people to help build that very simplified understanding that we have a great pool of existing customer committed customer contracts that are gonna reap dividends for years. And even just with those existing customers, we could scale substantially, let alone the other additional opportunities. And so I think leveraging technology to extract the insights we needed to synthesize and tell a very seamless story, um, and then communicate that, you know, tech was an underpinning for all of that, which was important for our, our pathway to going public.
Daniel Shaffer: That's great to hear. Um, Our next section, Nitesh, is called the Playbook. And in this, uh, section we like to talk about a few different things, really, maybe a little bit more granular around the finance function and risk in particular. So let's start off with maybe something high level. Um, what does risk management mean to you?
Nitesh Sharan: I read a, uh, book a little bit ago that I, really, um, liked the framing. It was about the world of finance and the framing was that finance is simply a tool that helps us navigate a world of uncertainty. And I've always anchored to that. I always, and you asked me the very first question, like, why finance? And I think, I don't know if this was related to me as a 19, 20 year old, but I've always been very curious about like, why is the world the way the world is? Why have we evolved the way we are? A lot of the books I like to read kind of try to answer that. Um, and I look at finance as just a vehicle to, in a lot of uncertain situations, provide one tool that's tangible. You don't wanna over anchor to it. You know, uh, numbers, uh, should be balanced with implicit understandings and, it's the art science together that really makes great decisions. That said, I've, I've always found that, um, finance provides real, real tools. So now to your question on risk management, you know, I simply think of risk management is we're living in a world of uncertainty. And, you know, we're making a lot of probabilistic decisions and bets and, and choices we make, whether those are investments we need to make or investments we're not gonna make. And, uh, you know, existential factors that are outside of our control that may affect us. We've been living through several of 'em over the last few years. Pandemic, most notably, but even some of the geopolitical things going on, inflationary pressures, these are things that no one company is really, uh, individually, um, driving, but they happen to us. So knowing that that's a, you know, a constant is, is managing a world of uncertainty and risk, finance is, is a great vehicle to help assess, uh, each of those uncertain factors and, develop a program to mitigate those where possible. So I always think of it as, you know, the business has a purpose. In our case, we're trying to voice enable the world. Uh, there are things that we control in that and things that we don't. And things that we don't control are there efficient ways of managing well? So in the case of, for example, we manage a global company. But we certainly don't control foreign exchange rates, and they're going pretty, uh, wonky these days. Uh, but there are ways to manage it. Uh, similarly that's why insurance is so effective, because if you can pull capital from various people, then there's an efficient, um, possibility of, um, managing risk factors. So that's the way I think of risk management. And uh, you know, companies that do it well have a very. deep understanding of their business and the external factors that could affect their business. Um, you know, the variables that matter most, and what are those potential scenarios that can adversely affect the path forward. And then really being hypervigilant against, you know, what are the mechanisms, tools, again, process, people, tools to put in place to help manage those.
Daniel Shaffer: and Oh, absolutely. and I think you brought up a great point around your, you know, earnings per share and what exposures are actually impacting potentially, uh, your earnings per share. Having that data is really important, so thanks for bringing up the FX risk. So critical today. There's another, uh, looming storm here. It seems like it's already on top of us, um, around the current interest rate environment. I mean, is that starting to call into question even more deeply, do you think, the importance of forecast accuracy?
Nitesh Sharan: So I struggle with the framing of forecast accuracy. I actually think the accuracy is scenario planning. I don't know that we should have properly predicted, uh, that, you know, Russia would invaded Ukraine when so much of the intelligence community may not have. Like, I don't think it's so much about predicting, uh, the future as much as it is this risk management scenario analysis that's really important, which is, okay, there are a few different scenarios that can happen under these circumstances. Where would I place my bets? Or where would I limit my bets? Where would I restrain? And are we making the right, uh, decisions along the way and doing that in an agile, flexible manner, knowing that it doesn't really work and I can't have, you know, three year planning cycles every year and kind of just hope that it happens in November because the world doesn't work that way. So the agility is really important. The constant sort of understanding of what is moving around. It affects, again, most important value drivers for an individual business. So I don't think, it's less about, um, the accuracy of any forecast in my opinion. It's more about did you foresee, uh, the potential unforeseeable, or at least did you prepare for circumstances that are unforeseeable and, and did you sort of hunker down? And a lot of that ends up in a financial realm of, you know, how do you think through dry powder? How do you think through, uh, like I said earlier, these risk management programs? And are you rigorously assessing those as the world changes continuously? So, to your point on interest rates and inflation, which for four decades sort of was muted, if you're paying attention and you see that at some point if the central banks around the world are gonna flood the economy with liquidity, which all might be the right reason, then one risk potentially is inflation. And an inflation is gonna power through then one of the ways they normally would address it is by raising interest rates. So that is a scenario. Now whether companies can really get on it, I'm not sure that, you know, putting in place an interest rate swap, you know, those things, whether that really would've addressed or not is, is unclear. But the fact of just going through the planning exercise is very important.
Daniel Shaffer: I am absolutely agreeing with you that it's not about the end result, but it's about the data points that come in that you can inform your forecast in order to consider it accurate. And it's having that, as you said, that kind of dynamic ability to look at potential, uh, risk elements to really give you that confidence that your forecast is where it needs to be. And I guess kind of looking at that with a sharper angle, I'm wondering if, you know your liabilities are exposed in a way that are clear. Um, and if you're able to for example, lock in long term contract prices, um, when you have the data to understand what's coming, um, is that gonna give you an advantage in terms of profitability.
Nitesh Sharan: Yeah, absolutely. I'll go back to the foreign exchange example. Uh, it's just really unclear, uh, if we can have a strong point of view. It certainly seems like maybe over the course of the next two years, the bias will be towards dollar weakening and dollar strengthening, but that could be completely wrong. If we go into a recessionary environment, we go the other way. That said, one of the benefits of a hedging program is that it provides at least predictability. And generally, cycles go up and down. But if you can kind of smooth that trend, that can be beneficial. And I would apply that to a lot of different areas. Um, I think similar could be said of interest rate risk management. So it's not so much trying to solve to an EPS target, quarter to quarter, anything like that. It's to provide better predictability and framing. And then I think you were getting into a little bit on the, capital side. I just look at it like, you know, companies going into uncertain times tend to increase the cash buffer, and that's prudent because that says, Hey, I don't know which direction things are gonna go. Um, but I rather, you know, protect against the more difficult circumstances and give myself a little more runway. When are difficult, you sort of wanna just keep the optionality open longer. And I think there are different ways of doing that for different types of risks. But just doing that in general is really important.
Daniel Shaffer: Yeah, absolutely. No, I think that's smart. I mean, the idea about being data driven helps you, uh, guide the day to day, whether you're talking about short term or, you know, even midterm forecasting. Um, but in having that three year view, that really long term view, um, is fundamental to, uh, navigating and making decisions, uh, in advance before the bigger problems happen. I like the guidance you provided there. Thanks for that. Curious about how Soundhound went public during the pandemic. I mean, that process must have been rife with challenges. Um, certainly not one that you could have foreseen in terms of a, global pandemic, but we were also kind of in the midst of it. How did it develop? What were your processes? Um, did the pandemic really affect your thinking?
Nitesh Sharan: Yeah, so I showed up midway through this journey. I would say, uh, to give all the credit to the team, uh, and our co-founders, and particularly as our CEO and co-founder Keyvan Mohajer, who, it's been his vision for 17 years to build this company, uh, to the amazing position it has now. And, uh, for us, as I mentioned earlier, we have, uh, really strong, committed contracts from large enterprises. These are from some of the largest, uh, auto companies out there, the likes of Mercedes and Hyundai and Solantis. Uh, Solantis, who owns many, many brands, uh, across like Jeep and, uh, Maserati and, and so forth. So we, really had built off of a foundation of amazing technology, these great business partnerships. Uh, but those were big committed contracts, multi-year in nature that just took time to accrete into the P and L. But we had these relationships and we were at a point of maturity, and we'd been a private company for, like I said, over 15 years, that it was a natural next step for us to go public. And we had enough in terms of the maturity of the business, the opportunity now the proven adoption by customers, uh, that really as we look to this next horizon for us, which was about scaling, and scaling across the verticals we talked about earlier first, but into even more areas as we go forward, that getting access in the public capital markets and, and the incremental capital provides, the visibility it provides, the maturity it requires as a business, like we felt we were in the right place. So that was a journey that the team had been looking at for a while. Um, and ultimately when I came on board, it was to help shepherd that journey forward. But I think a lot of those decisions were made. and certainly I think, you know, nobody knew necessarily a couple years ago how the cycles would play out that inflation would rear its ugly head and interest rate. You know, the Fed would have to get aggressive on interest rates and that would sort of really have its impact on not just tech in general, but within tech, uh, hyper growth tech, and then within hyper growth, you know, IPOs. Um, it certainly had its impact. So I feel a lot of pride that we were able to successfully navigate it when, a lot of other companies decided to go a different route. And I think it's a proof point of, first of all, the, company where we are as a company. That, uh, we really are ready for this as the next step. That we're able to get through the sort of the complexing, you know, process that's required with the SEC and, that requires the right legal setup and really it requires the right support from the investment community. We were able to frankly in a backdrop of going public where a lot of people were shying away from investment, we were able to raise $118 million, uh, from a real great balance of strategic investors and financial investors, global in nature, with great partnerships, A lot of our investor base, uh, has been companies who have been partnering with us. That's very validating. And so I think we've had a lot of the assets that have enabled us to get through it now, coming outta the gate as a public company in a very, I'll say, uh, unfriendly, um, market backdrop, equity market backdrop. Like that's just something we have to navigate through. Again, where we're solving long term. solutions for how humans interact with technology here. And so we're staying committed to that long term vision, and yet we're sharpening focus, if anything, you know, And that's what great companies need to be doing, which is when the world pivots a certain way, stay true to the long term vision, but just get sharper, get greater attention on things that matter most and keep sharpening that pencil. So that's what we've been doing since we've been public over the past six plus months. And, uh, you know, we'll continue to do it going forward.
Daniel Shaffer: Excellent. Wow. I mean, how fortunate it was to have those great partnerships, um, and really those relationships that evolved over time where you kind of collectively were moving together at the same pace and the partners and investors had that opportunity to see your moves and the mechanics of your growth. I'm just curious if there was anything unique or, uh, that investors were asking about or maybe something that you're really, um, as you were saying, just really talented team were able to bring to the board, uh, and investors before going public that made a difference? Um, or would you say, uh, that wasn't it at all?
Nitesh Sharan: Well, I look at it this way.There's a lot of reasons why we believe, why when we talk to customers, we say we win. And they say, These are the reasons they select us, but I'll just highlight two. Uh, one is we have been developing this tech for a long time and it is hard AI, this is technology that takes a long time to develop. think Keyvan says it this way, which I really appreciate, is it takes 10 years to develop the technology and it takes you three to four years to realize it takes 10 years to build the technology. And we've seen that with a lot of partners is that they'll say, No, I could do this myself. I'll do it internally. And then you realize it's very difficult and we've seen many, many examples of companies just within the last, uh, six, 12 months who've decided to sort of outsource voice AI because it is just very complicated. But we've had a, committed group of, really, and that's a rarity. I'd say this next point is a rarity in Silicon Valley, which is a committed group of great engineering talent who stayed together for a long time. You don't see that very often. Just to backup, this is a company that's been, uh, built by three co-founders from Stanford. Keyvan and Majid did their PhDs, uh, there, and then James was doing his bachelor's and they connected early on and, they built a great team around them to develop and harness the stack. So I'm hammering this point because we have great technology and we've proven and it'd be awesome to show the video here or, um, let people go to our website and check it out. But when you see the technology, you, I think quickly, most people look at it and go, that's very different than what I'm used to using my voice assistant's in my home or what I'm used to using my phone or what I use in my car. So we start with better tech. And then I think also our approach is differentiated and we had to convey this message and that's what I think got resonance with the investment community, to your question on how we were able to get through the process. You know, we white label and we work in service of our partners. And I know that actually sounds pretty basic, but that is not really what, uh, all of technology does. Back to the innovator's dilemma point from earlier, um, brands, a lot of the big tech are out, um, disrupting, disintermediating and getting in the middle of the customer relationships and brands more and more realizing that that is a major risk to the long term viability of their company. And I gave you my own personal experience at Nike. we looked at partnership with Amazon. I'm sure they continue to look at it. You know, I haven't been there for a little while. Um, but the real risk oftentimes is like, is that the best way to have a long term relationship with your customer? Because you worry about disintermediation. Whereas our whole purpose, our strategic priority, is enabling the brands to serve their customers because they know their customers best. They know their product best. We're voice enabling so we think that's a real big, uh, differentiation. Also, the data elements of sharing data. The brands get to control their data. There's a lot of privacy risks out there these days. There's a lot of, um, privacy concerns from customers. We enable better privacy controls on and on. There's a lot of different facets and features. So I guess it's a long winded way of addressing your question, which is we believe we have a compelling narrative. And we've proven it with customer adoption and, uh, like I said, hundreds of millions of accumulative bookings backlogged that are now rolling into the P and L. And we just see a tremendous amount of scale, and I think there's been a great, uh, set of investment partners who have said, Yeah, I believe in this vision with you. They are helping deploy the capital with us. And, uh, we're off the races.
Daniel Shaffer: Oh, that's a fantastic, very comprehensive answer, So thinking about the future of finance, some quick hits. Quick, short, just off the cuff answers.Um, given what you've talked to me about already, Nitesh, what do you think about digital currencies for treasury and finances? Is that happening? I mean, what are your thoughts?
Nitesh Sharan: I'm not rushing in in frankly, and I wasn't whether at Nike or HP, but I do believe there's definitely fundamental technology opportunity here. And I, probably back up into blockchain, like I think for multiple purposes, even beyond the currency part of it. There's a lot of applications that I can see, um, playing out within the digital currency space. I look at it this way, I see, still see a lot of in inefficiency in how capital gets allocated as a finance professional. I think one of the pillars of my role is capital allocation. And the financial sector is an enabler of capital allocation. And I think there's just example after example where we can see more disintermediation. And I think digital currencies can be part of that, reducing friction, you know, people who are creating value for society and people who have excess capital to deploy to people who are trying to create value for society. Like we just need to keep minimizing the friction from point A to point B. And I think digital currencies can be part of that in the future. I also think just we continue to live in a very integrated international, uh, world. And so, anything that can kind of help enable, um, the more free flow of, capital flows across, uh, borders and from point A to point B, I think they have long term sustenance, but it still feels kind of early and it's unclear who the winners will be. Last question here for you. You talked so much about leadership today, really about what are the main levers that move a company forward and having the ability to manage, find, uh, inspire great people in order to do excellent work with the power of technology behind them. So given that as the role of the CFO seems to have such a higher level leadership, um, and steps away from finance as the core of his or her function. Do you think there would be a chief liquidity officer and is now the time?
Nitesh Sharan: Some part of me wants to answer that and say, Don't we already have that? And maybe it's not a title. I think a lot of companies are coming up with interesting titles all over the place, so I, yeah, I, I always thought of the treasurer as the Chief Liquidity Officer you know, I was treasurer at Nike and I spent a lot of my years growing up in treasury at HP and Nike, and, liquidity is so important and I think when you go through market environments like we are now, it only becomes even that much more important. So certainly, yeah, I think, uh, whether that becomes another addition to the C-Suite or not, um, it is a role that is absolutely critical and, uh, and I can see how will only increase in importance as we go forward.
Daniel Shaffer: Wow. Very consistent answer with what we're hearing today. The treasurer is the Chief Liquidity Officer. Well, Nitesh, it has been an absolute pleasure. I, you know, really want to thank you again for joining us and a shout out to Eric Ball who was able to connect you and the Invisible Vault. It was a real pleasure having you here today.
Nitesh Sharan: Well, Daniel, thank you very much. It was great chatting with you.