Disrupting Insurance: CFO Teodora Gouneva

“The minute you create an abundance of resources, that's when you’re not able to execute well or efficiently deliver results.”

Teodora Gouneva had no background in payments or travel before joining PayPal and 15 years later Airbnb, holding roles like finance chief of PayPal’s Braintree and Venmo divisions. That doesn’t matter much, though, when a company is disrupting old ways of doing business. In December 2021, she left Airbnb to become chief financial officer of another tech company upending a stodgy industry: NEXT Insurance.

An insurtech, NEXT Insurance provides industry-specific loss protection for small businesses with more straightforward, transparent products, sold online and through brokers, underwritten using artificial intelligence. The Palo Alto, Calif., company boasts $881 million in venture capital, the latest round valuing it at $4 billion.

Coming to NEXT, Gouneva brings a lot of experience targeting small businesses. She will help guide the six-year-old company through elemental steps like balancing the priorities of growth and profitability, allocating resources wisely, and expanding the finance department. In a conversation over Zoom, I asked Gouneva about how she’s leveraging her experience in this new role.

Teodora Gouneva

CFO, NEXT Insurance

  • Hired: December 2021
  • Previous employers:
    • Airbnb
    • PayPal
    • Lehman Brothers

The interview has been edited for clarity and length.

VINCENT RYAN: What did you learn at PayPal and Airbnb that will help you at NEXT Insurance?

TEODORA GOUNEVA: One, when is the right time to push on profitability rather than focusing exclusively on growth? The second is figuring out how to become very diligent with investment decisions and how to stay focused. For example, PayPal had many opportunities when I joined in 2004 [Ebay had acquired it two years earlier] with almost unlimited funding. In that situation, how do you step back and say, ‘these are the three [initiatves] we want to focus on’ — instead of, ‘let’s put resources against 100 ideas, and maybe something will stick.’ 

Doing fewer things allows a business to execute and innovate in a measured rather than scattered way. I’ve seen the role that finance can play to provide the structure and guidance needed in those situations. At Airbnb, I think the leadership did an amazing job of refocusing and ensuring that we executed on our core.

How will that play out at NEXT?

GOUNEVA: We want to invest responsibly in the business. If you artificially constrain your resources, it forces the discipline of focus. The biggest mistake that CFOs make is to agree to fund anything and everything. The minute you create an abundance of resources, that’s when you’re not able to execute well or efficiently deliver results. Scarcity creates execution excellence. And constraining resources pushes us to focus on what will move the needle. I’m big on delivering that.

Is NEXT aiming for profitability at this stage?

GOUNEVA: The company needs good growth but not necessarily crazy growth at the expense of profitability. We want to make sure that our topline continues to be strong. Profitability in terms of unit economics matters to us significantly — delivering solid and sustainable unit economics. We also have to stay disciplined on non-variable costs without making many sacrifices on the foundation that has to be built. So, we are trying to improve our burn rate over time and establish a clear path towards profitability.

In what functional areas is the company hiring?

GOUNEVA: In the last couple of years, we’ve invested in sales and marketing and significantly in product innovation and engineering. Usually, where [companies like NEXT Insurance] haven’t invested enough is in G&A [areas]. Finance, for example, is run with minimum staffing at the moment. Given we have many regulatory filings, the team has done an amazing job with limited resources. … I want to see us invest in a couple of areas in finance. And when I say that, I mean in a handful of skillsets. People here and there. We’re not talking about hundreds of people. 

What parts of finance will you be building out?

GOUNEVA: My immediate focus is on financial planning & analysis (FP&A). That is an area where we have a huge opportunity to influence business outcomes — not just to monitor results but to understand where we should and shouldn’t grow. We’ve already brought FP&A staff on board; it’s a matter of ramping up and developing a well-functioning team. 

I immediately took steps to staff treasury. We had our accounting team performing functions typically done by a treasury leader or a treasury team. As our business grows and complexity and scale, we need a more sophisticated approach and expertise in managing cash day to day. We need more proactive thinking about short and long-term capital structure and monitoring the investment portfolio. 

Some finance people are good at finance, but they’re not great at partnering with operations or other parts of the business. What kind of finance people are you looking to hire?

A business partnership is massively critical. If you can’t think strategically, if you don’t understand the business, if you don’t know how to partner, you become irrelevant. We want people with not just the financial acumen, comfortable with the numbers, but also able to understand the business to think strategically. Those kinds of people can sit down with [other departments] and brainstorm …. If all you can do is put five numbers together and you have no other contributions, that’s not an optimal relationship.