About this episode
Rick Rosenthal had been working as an investment analyst at Bear Stearns for some 3 years when the bank became a casualty of the subprime mortgage crisis. He remembers sitting in front of his Bloomberg terminal in March 2008 and watching a news conference at which a Wall Street expert was assuring viewers that Bear Stearns was a solid company—just as the bank’s stock began to plummet. In a deal reached a few days later, JPMorgan Chase agreed to pay a mere $2 a share to buy all of Bear. “While our fund had been performing well, JPMorgan had its own, so the question became, ‘What is going to happen to our fund?,’” recalls Rosenthal, who became part of a team of Bear veterans who ultimately were spun out by JPMorgan to manage the fund independently. Reports Rosenthal: “Relative to traditional asset management funds, we actually performed pretty well, but I did come to understand much more clearly how integrated the financial system is into the greater economy.” Rosenthal remained inside the investment banking realm until 2013, when he was named vice president of finance at CLEAR, the biometrics technology start-up that had introduced a menu of offerings to boost security measures at airports and stadiums. At CLEAR, Rosenthal was finally able to satisfy an “operations itch” and acquire the operational skills that he now views as being critical to stepping into a CFO position. To help underscore the career-building value of being able to cite experience in multiple operational and functional tasks, Rosenthal tells us about a productivity metric that he helped to develop while at CLEAR. Historically, a total sales figure had been tabulated each day, along with a total sales per employee number. However, visibility into the sales function remained limited, and it was felt that management had too few levers to drive new sales. “Since I oversaw the payroll function, I had visibility into the number of hours that different employees worked each day and could actually see the sales that each made,” explains Rosenthal, whose next step was to engage the operations team responsible for employee scheduling. “The idea now was to assign the top performers to times when the lanes at the airport were the busiest,” comments Rosenthal, who adds that the experience of having advanced a new metric revealed to him not only the power of the operator’s view but also the risks of continuing to allow one data point to cloud over new opportunities. Says Rosenthal: “Here was an important segment of employees that we had just not focused on before because they hadn’t been generating a high enough overall volume of sales to merit attention.” –Jack Sweeney CFOTL: Tell us about Clara Analytics … what does this company do, and what are its offerings today? Rosenthal: Clara Analytics is an AI-based software platform for claims organizations inside the commercial casualty industry. So, what do I mean by this? Think about an adjuster who’s working at a carrier or maybe even for a self-insured company, as many firms today manage these risks in-house without using an outside carrier. An adjuster may be managing 100-plus claims at any given time. There’s a lot of information on these that’s coming in on a daily basis, and it’s hard for any individual to read and comprehend all of it on sort of a real-time basis. What ends up happening is that they’ll look at each claim periodically. Every 30 days, or even less often, they’ll review what’s transpired since they last looked. What our tools do is to monitor all of the relevant information daily, so that we can alert adjusters as to which of their 100 claims require their immediate attention on any given day. This allows the adjuster to be more strategic in managing the claims and optimizing outcomes. What drew me to CLARA Analytics was that it was an opportunity. It’s a series B company. The CEO, Heather Wilson, has a tremendous background. She was the former chief data officer at companies like Citi, AIG, and Kaiser. She’s on the board of Equifax. I met her, and we just clicked from Day One. This was a really interesting opportunity on top of that because she was relatively new to the company. We had this opportunity, essentially, to rebuild from scratch some of our team, some of our products, and our go-to-market strategy. We could really think through how to invest capital in a way that was going to get CLARA growing significantly. We’ve made these investments and now, excitingly, have seen revenue grow tremendously.