Download our whitepaper to discover the technical and behavioral skills needed to lead your business forward.
When father and son team Greg and Derek Kautz decided to co-found a fintech business, they knew their finance and accounting experience would play a pivotal role.
There was the obvious product piece, of course. After Derek had a difficult experience implementing lease accounting software that was rushed to market before it was ready, he was inspired to build a better mousetrap. His in-depth accounting knowledge and experience informed and guided his vision for a more efficient and robust tool.
But it was bigger than Derek’s familiarity with the needs of companies employing lease accounting. Much bigger.
This case study of JonnyPops’ success highlights the unusual financial and operational strategies that enabled rapid expansion into a crowded and highly competitive frozen treat market.
“Our experience is always there. The CFO in both of us influences how we manage our business, and it’s especially prominent when we talk to clients. We’re accountants first,” said Greg, a veteran finance executive and former CFO.
Greg is CEO of lease accounting software provider Black Owl Systems, the business the two founded in Calgary in late 2020 with an experienced software developer as chief technology officer. Derek, an accountant with a natural affinity for systems technology, is CFO. The financial tool they’ve created helps finance leaders meet the IFRS 16 and ASC 842 compliance reporting requirements instituted in 2019.
Derek (left) and Greg (right) Kautz
Greg’s 40-plus years in the finance industry include ground-breaking work with internal audit processes, seven years as CFO and vice president of finance for an engineering consulting firm, technology entrepreneurship, and financial management consulting.
Derek’s accounting career has included positions at two of the Big Four accounting firms plus roles as financial controller, analyst, and global enterprise analyst. In his last two roles, he was part of the IT staff as that department’s liaison with the accounting team.
Greg is openly impressed with his son’s ability to move easily between traditional accounting and the systems that make it easier. “Until we started this, I never realized how strong of an accountant Derek is. What probably impressed me the most is how he’s articulated what the tool needs to do and how to make it very user-friendly,” Greg said.
In addition to helping the duo determine if Derek’s product idea was financially viable, their combined finance and accounting experience influenced their decision about when to bring it to market, too. Instead of using the “good is good enough” approach, they waited until the software was the best they could create. Investing in product performance to prevent the customer problems Derek encountered earlier came before spending on sales and marketing.
Greg believes their background, and particularly his past CFO experience, gives them a high-level perspective as they make decisions. “Because we have the ability to see the whole business, we can balance the finance side with corporate planning, development, and operations,” he said.
Greg (left) and Derek (right) Kautz knew their finance and accounting experience would play a pivotal role in founding their fintech startup.
It also helps them make decisions about how they spend money. “Do we build out the product and get the best version available? Or do we spend more money on marketing?” Derek asks.
One thing they haven’t spent money on yet is office space. The team of 10 — the co-founders, sales executive, software developers, and accountants — all work remotely.
Greg envisions leasing office space in the future but acknowledges that his CFO son will require that he make a case for the expense first. “When I propose an investment such as a website update, he’ll say, ‘Show me the justification.’ It forces me to be accountable,” Greg said, adding with a smile, “That’s where the father-son roles are gone.”
The vanishing family hierarchy is evident in their day-to-day operations, too, although one aspect caught Greg off guard at first. “Derek is definitely more direct than any other people I’ve worked with. He’ll say, “I don’t like this’ or ‘I disagree,’” Greg said.
Derek said direct communication has always been his style, but expressing his views honestly is less complicated when the colleague is a family member. “I’ve never shied away from sharing my opinion about what I think is best for the business, but here, I don’t have to worry about stepping on toes or office politics,” he admits.
“People use the term father-son business, but I think it’s son-father. It’s Derek’s vision. It’s Derek’s product. I feel like I’m on the journey with him.” — Greg Kautz
And, while working with a co-founder who’s a generation younger might be a new experience for Greg, he sees advantages to it. While some senior finance leaders he meets with might be closer to Greg’s age than to Derek’s, others aren’t — and neither are their less-experienced staffers. Observing Derek’s work style and priorities has given his father insights he uses in sales and marketing situations. For example, Greg said he better understands how younger clients view technology as more than an important way to reduce compliance risks. It’s also a time-saver that can improve their work-life balance, which is a priority for them, he notes.
It’s one way, Greg, although senior, learns from his son. “People use the term father-son business, but I think it’s son-father. It’s Derek’s vision. It’s Derek’s product. I feel like I’m on the journey with him,” Greg said.
This is the final part of a three-part series. Here you can find part one and part two.
