Run the Numbers Podcast Summary

Episode: Investors vs Operators: Aidoc’s Arvind Kadaba on the “Grass Is Greener” Trap and How to Escape It
Host: CJ Gustafson
Guest: Arvind Kadaba, CFO of Aidoc
Date: February 24, 2025

Episode Overview

This episode of Run the Numbers features a candid and engaging conversation between host CJ Gustafson and Arvind Kadaba, CFO of Aidoc. The focus is on the contrasting worlds of investors and operators—demystifying the “grass is greener” trap that tempts professionals to switch sides in pursuit of seemingly greener pastures. Arvind shares his journey from investment banking and private equity to his current operational leadership role. Through personal anecdotes and real-world examples, he illustrates the hardest adjustments, the decision-making frameworks he borrows from investing, and his pragmatic philosophies on shareholder value, capital allocation, and the true breadth of great businesses.

Key Discussion Points & Insights

1. Differences Between Investors and Operators

[07:13 – 14:24]

• Arvind’s Transition Experiences:

  • The biggest surprise was the sheer number of meetings as an operator, versus the lean, quick decision-making of investing teams:

    “On Wall Street, teams are super small... In corporate, I just didn’t fully appreciate how many meetings there are.” (Arvind, 07:13)

  • In investing, even senior roles are often “individual contributors,” still in the weeds with the numbers.
  • Operators must constantly manage up, down, and sideways, assembling cross-functional teams to solve specific problems.

• Team Structure Contrast:

  • Deals in finance involve a tight “pod,” but operating requires dynamic, fluid teams, often reshuffled per project.
  • Drawing parallels, Arvind likens senior bankers to quota-carrying sales reps with targets to hit.

2. The “Grass is Greener” Trap — Both Sides Envy the Other

[16:48 – 22:57]

• Operators romanticize “calling the shots” like investors, while investors envy being hands-on and in the trenches.
• The reality: Capital markets are much more competitive now; excess returns have been “competed away.”
• Promotion in investing is increasingly rare—firms are “pyramids” with narrow paths to the top.
• Key advice: There’s no “better” path; it’s about personal preference, skill set, and how one chooses to contribute:

  “It’s really a function of what you like to do and how do you want to contribute to... capitalism.” (Arvind, 20:16)

3. “All You Need is One”

[23:36 – 24:40]

• Arvind recounts his career as a series of singular yeses—oftentimes only having one offer, which still led to remarkable opportunities.

  “Really, my entire career has been an exemplification of all you need is one.” (Arvind, 23:30)

• This mindset eases pressure and aligns with the unpredictable nature of job searches.

4. Knowing When to Change Course

[25:51 – 32:23]

• Arvind’s pivotal realization: He liked finance, but private equity wasn’t for him.
• Stressful years at Citadel led to self-reflection; he wanted to build, not just invest.
• Personal/family events inspired a desire to work in healthtech, especially after realizing the potential for positive impact and the scalability of software in healthcare.

  “The hedge fund trader framework: If your trade is going south... you double down or rip it out. And I said, okay, it’s time to rip it out.” (Arvind, 30:01)

5. Healthtech, AI, and Application Layer Explosion

[33:13 – 36:05]

• The digitization of health records (thanks to Obamacare and the HITECH act) created fertile ground for new healthcare applications.
• Now, with AI surging, innovation is rapidly progressing both clinically and in back-office automation.
• Aidoc’s focus: AI for physician decision support and systemic efficiency.

6. Build vs. Buy vs. Partner: An Operator Framework

[36:18 – 38:57]

• The “build, buy, or partner” decision is a fundamental investment judgment, requiring both quantitative and strategic analysis:

  “Ultimately, it’s portfolio theory. You’re putting your bets on the table... what’s your conviction level in them?” (Arvind, 37:44)

7. How Investors’ Frameworks Translate to Operating

[38:57 – 43:36]

• Applying portfolio theory to business operations: allocate capital to short-term vs. long-term bets, balance certainty of payback with innovation needs.

  “Even though it’s people and business units... it’s ultimately the same math.” (Arvind, 39:00)

• Example: Hiring sales reps is a fast, quantifiable ROI, while R&D investments are bigger, slower, but can be fundamental for long-term competitiveness.

• The art: load-balancing “sugar high” quick wins and “broccoli” long-term bets to maximize shareholder value.

8. Translating Shareholder Value to Daily Decisions

[44:54 – 47:28]

• Make shareholder value tangible: transparently communicate capital allocation criteria, why some projects get funded and others don’t:

  “Everyone talks about long term, but you have to earn the right to exist for the long term by putting up numbers in the short term.” (Arvind quoting a founder, 45:44)

• Annual planning is about objective and subjective judgment balancing risk, payback timing, and strategic goals.

9. Contrarian Views: Not All Businesses Should Seek VC

[48:00 – 56:40]

• The last decade saw “scope creep” in both startups and VC—venture money flowing into companies without the return or margin profile to justify it.

• Many incredible companies are, and should remain, “boring” services or cash-flowing businesses, not tech unicorns. Venture capital is not always the best funding source.

  “Venture capital for a services business is not the right capital structure.” (Arvind, 50:10)

• Get-rich-slow “boring” businesses (e.g., auto dealers, restaurant franchises) can build generational wealth without headline-grabbing technology.

10. Cash Is Still King

[56:40 – 57:03]

• In uncertain capital markets, the value of strong, positive cash flows is reaffirmed.

  “Cash will always be king. And first is don’t run out of it, right, as a CFO.” (Arvind, 56:44)

11. Lightning Round (“Long Ass Lightning Round”)

[57:15 – 59:20]

• Biggest Mistake: Not building cross-functional trust early enough in his first operator job.

  “...as a finance leader you can’t tell people what to do... you have to influence them.” (Arvind, 57:15)

• Advice to Younger Self: Get to tech as quickly as possible after graduation.

• Finance Stack at Aidoc: Netsuite (ERP), Salesforce (CRM), Siligo as connector, Aurora for sales tax, local Israeli vendors for AP and equity, Excel/Google Sheets for manual work.

• Craziest Expense Submitted: No Wolf of Wall Street moments, just “too-expensive bottles of wine.”

Notable Quotes & Memorable Moments

• “On Wall Street... it’s a very informal, very quick interaction process. Whereas, coming to corporate for the first time, I just didn’t fully appreciate how many meetings there are...”
  (Arvind, 07:13)

• “You can only do one job at a time, obviously. Overemployed remote employees notwithstanding, of course.”
  (Arvind, joking, 24:40)

• “All my portfolio companies—the operators are doing really well for themselves, especially if there’s a disproportionately great outcome. So what’s it like, Arvind? What’s hard about it, what’s interesting, what’s different?”
  (Arvind, 18:56)

• “Product market fit as a participant in the labor market is really important... what do you like to do, what are you good at, and—of course—where do you get compensated?”
  (Arvind, 22:23)

• “The hedge fund trader framework: If your trade is going south... you double down or rip it out. And I said, okay, it’s time to rip it out.”
  (Arvind, 30:01)

• “If you only hire sales reps, you’re never going to build any new product and your competition is going to ultimately crush you.”
  (Arvind, 41:48)

• “Not all great businesses are technology businesses. No one wants to do the boring business anymore, where so many of those businesses have created, and will create, some spectacular fortunes.”
  (Arvind, 51:52)

Timestamps for Major Segments

• 07:13 – Arvind on meetings overload and differences in team structure
• 16:48 – The “grass is greener” myth in investing vs. operating
• 23:36 – “All you need is one” career offers
• 25:51 – Career inflection: realizing the operator’s path
• 33:13 – The current state of healthtech and AI
• 36:18 – Framework for build vs. buy vs. partner
• 38:57 – Bringing portfolio theory from investing to operations
• 44:54 – Explaining shareholder value to teams
• 48:00 – Not all great businesses should raise VC
• 56:40 – Why cash is still king
• 57:15 – Lightning round: mistakes, advice, tech stack, and expenses

Tone and Style

Conversational, self-deprecating, and honest—with “in the trenches” realism about the challenges and rewards of both investing and operational leadership. Arvind combines humility, humor, and practical frameworks, while CJ keeps the energy high with rapid-fire insights, relatable stories, and an open curiosity.

Final Takeaways

• Don’t get swept up by envy—both investing and operating have pros and cons, and success is about fit, not following fads.
• Decision-making frameworks from investing (like portfolio theory) are invaluable in operational leadership but must be adapted to the realities of people management and strategic execution.
• Many great businesses are quietly compounding outside the limelight of venture capital and Silicon Valley.
• Ultimately, focus on personal fulfillment, business fundamentals, and cash flow—and remember: “All you need is one.”