Selling a category that did not exist

I left a Group CFO seat at a listed company to sell something nobody had asked for. The logic seemed obvious to me and to almost nobody else. A growing company needs a CFO's judgement long before it can carry a CFO's salary. In the meantime it makes the decisions anyway, badly, and pays for them later. So give it the judgement in a fraction of the time, at a fraction of the cost, and let the company grow into a full-time seat when it is ready.

Obvious, and unsellable. In 2008 an Indian promoter had three mental categories for a finance person: the accountant who keeps the books, the auditor who signs them, and the CFO, who is a senior full-time employee with a car. I was proposing a fourth thing. The first question was almost never about price. It was "so you are a consultant?", asked in a tone that made clear this was not a compliment.

You are not selling a service, you are funding a definition

The thing I did not understand at the start is that in a new category, every sale carries the cost of educating the buyer, and that cost does not go away with volume in the early years. You are paying, in time, to establish a definition that your competitors will eventually use for free. That is the actual economics of going first, and anybody considering it should price it honestly.

What made it survivable was a decision I took early and defended stubbornly: never take work that would blur the definition. A great deal of what came through the door was bookkeeping with a better title. Taking it would have been profitable that month and fatal over five years, because within a year we would have been an accounting firm with an unusual name, and the category would have died with us.

In a new category, the work you refuse defines you more precisely than the work you take.

Trust is the product, and it prices differently

A CFO is not bought on deliverables. Nobody has ever engaged one for a specific number of reports. They are bought on judgement, which means the buyer has to believe you before they can evaluate you, which is an uncomfortable order of operations for a services business.

This has two consequences that took me years to accept. The first is that you cannot price this by the hour without destroying it, because pricing by the hour invites the client to buy fewer hours of judgement, which is precisely the wrong incentive for both of you. The second is that credibility has to be established before the meeting, not in it. The work that builds it, writing, speaking, answering questions in public with no immediate return, is not marketing overhead. In this category it is the sales process.

That is genuinely how the community happened. I started answering the same questions publicly because I was tired of answering them privately, and over the years it became a group of more than 270,000 finance professionals. I did not plan it as a funnel. It turned out to be the most durable asset the firm has.

The category eventually arrives, and it arrives for everybody

Somewhere in the last decade, the explaining stopped. Founders started arriving having already decided they wanted a fractional CFO, and wanting to discuss which one. That is the moment you spend years working towards. It is also the moment your head start quietly expires.

Plenty of firms now offer some version of what we introduced, and several of them do it well. I have no complaint about that. If you create a category and it stays yours, you did not create a category. You had a niche.

What I would tell someone doing it now

First, be honest about whether your market is early or absent. Early is a wonderful place to be. Absent means you are funding the education of an entire market out of your own working capital. Size that runway before you resign, not after.

Second, put your thinking in public and keep doing it for years before it pays anything. Eighteen years on, that is still the part that surprises me, and it is the part almost everyone skips.

I am still not sure whether the category was worth creating, or whether I would have been better off simply being very good at something that already had a name. It worked out. That is not the same as it having been the right call.