Deprecated: Methods with the same name as their class will not be constructors in a future version of PHP; Blogger_Importer has a deprecated constructor in /customers/b/4/b/cfoinsights.org/httpd.www/wp-content/plugins/blogger-importer/blogger-importer.php on line 44 Warning: session_start(): Cannot start session when headers already sent in /customers/b/4/b/cfoinsights.org/httpd.www/wp-content/plugins/unyson/framework/includes/hooks.php on line 259 How CFOs build trust with clear and objective models - CFO Insights Group

How CFOs build trust with clear and objective models

If they have clear logic, even pricey models can build trust, says David Wells, CFO of medical device company Endra Life Sciences.

When David Wells was a senior business analyst at Logistix, a turnkey manufacturer in Silicon Valley, a client was confused by the company’s pricing methodology. To address the problem, Wells and a colleague built a model that the client agreed set prices at a fair and accurate level. But there was a catch; within months, the model would lead to a spike in revenue for the company at the expense of the client.

“When I saw what was happening,” said Wells, now CFO of Endra Life Sciences in Ann Arbor, Michigan, “I went to the customer and I said, ‘Listen, we’re going to end up making a fortune, and that’s not what anybody intended.’ And they said, ‘We love the model. We’re fine with it. Keep it going.'”

Go-to-market strategy

Today, Wells’ focus is on helping Endra, a pre-revenue medical device company, keep to its go-to-market strategy as it steers through the downturn.

“The clinical trials have been slowed and that’s unfortunate, but there’s nothing we can do,” he said.

The company’s product is a 3D photo-acoustic imager that uses sound waves to help identify how much fat is in a patient’s liver. The system gives clinicians a way to monitor changes in a patient’s fat levels without the high cost of an MRI or the invasiveness of a biopsy.

Source: CFO Dive (2020)

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