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- [00:00]
A
What's the craziest thing you've ever had.
- [00:02]
B
Someone try to expense Marketing team at expense it was 1600 yards of recycled concrete to build an electric joyride off roading course. Each of the vehicles are matched to an end customer. Once they're completed onto rail and out.
- [00:19]
A
Into customers hands you're matchmaking with the suppliers can I get the part I need? But then you're also matchmaking with the customers on the other end. Claire, you've talked about getting to profitability at Rivian. Does introducing a new product like the R2 to extend that time frame?
- [00:34]
B
R2 provides greater fixed cost leverage for our commercial van and our one vehicle, so it has a big amplifying effect on our longer term profitability.
- [00:44]
A
In the software world you can put out a beta version of a product and you keep turning the screws until you get it right. You're in the car business. You can't really come out with something that's 90% baked.
- [00:54]
B
You may love the exterior design but then you need to make sure does the packaging work? Does the battery pack? Is that going to fit? Getting something wrong is incredibly costly to make a late change is this thing on? Yesterday's price is not today's price.
- [01:23]
A
Welcome back to Run the Numbers, the podcast where we talk with the world's top CFOs. I'm CJ A Tech CFO and my goal is to tease out the playbooks and tactics the best finance leaders rely upon to make you better at your job. On today's show I'm speaking with Claire McDonnell. Claire is the Chief Financial Officer at Rivian, where she's charged with stewarding one of the most capital intensive business models in modern industry, from scaling manufacturing capacity to managing cash to scoping long run investment decisions. Before joining Rivian, Claire spent years in investment banking. She helped guide companies like Peloton through its IPO and advised on major deals including Walmart's acquisition of Flipkart. In this episode, we go deep on how Rivian's capital intensity shapes Claire's role as CFO and the financial frameworks she leans on to manage massive long run investments. What went into raising nearly 14 billion at Rivian's IPO and how she determined the right level of capital to fund product launches and expansion. The art and science of capacity planning. How you optimize production ahead of demand for vehicles like the R1 and R2 and whether the bigger risk is overbuilding or underbuilding. How working capital and cash conversion evolve as production scales. Plus underrated levers like prepayments on deliveries in the EV space. We also touch on why federal tax credits matter to EV pricing, consumer demand, and how you explain that in simple terms. If you like the show, please remember to like it and subscribe. It helps us with the algorithmic overlords. And if you're looking to hire the best finance and accounting talent, I'd love to help you. I have a recruiting service that will pair you with qualified and amazing candidates from our WARM database full of podcast listeners and newsletter readers who self select into learning about CAC payback periods on weekends. If that's of interest, shoot me an email@talentostlymetrics.com onto today's episode with Claire Claire, thanks for joining me on the podcast today.
- [03:11]
B
Thanks so much for having me, C.J.
- [03:13]
A
I have to say you're the first French pastry chef I've ever had on my CFO podcast.
- [03:18]
B
Always good to have a first.
- [03:20]
A
I've been a huge fan of Rivian for a while and I followed your career. So you were at JP Morgan in investment banking for quite some time and you helped out on some amazing business models as these companies went public. And what struck me looking into Rivian is just the sheer capital intensity of the business. And outside of running the business day to day, I would guess that capital allocation is a core pillar of your job. How do the capital requirements of your business model shape how you think about the role as a cfo?
- [03:52]
B
We're an American automotive technology company, so we vertically integrate a lot of the key technologies that go into each of our vehicles. So that starts with designing all of the electronic control units. So you can think of those as really the computers that power every core system in the vehicle themselves. Where we have a full in house software stack. We design and develop all of our drive units in house. Amazing work that happens with our vehicle chassis program that gives you all of the amazing adventure dynamics of the vehicles that we have in market. And then one of the really exciting areas that we've stepped forward with additional vertical integration is centered around our autonomy stack. We announced in December we're building our first in house Silicon that will be going into our cars at the end of 2026. And then we've built through our data Flywheel, a full large driving model. So similar to the LLM world, you can think about that as you know how we're taking data from the real world, the universe of physical AI, and translating that into reasoning that's powering the vehicle and beyond the core technologies, obviously we have the product roadmap itself and have to build the manufacturing plants to produce all of the vehicles themselves and the core technologies that go into them. And beyond being a vehicle oem, we're also a direct to consumer business. So we have in house sales network service, we have a charging network. So there's many components into Rivian that creates the central calculus of capital allocation here within the business. Which is as you mentioned, given the capital intensity and multi year product development cycle of each and every one of these core parts of the business, makes it a very significant part of my day to day job and operations.
- [05:56]
A
One of my favorite books, it's called the Innovation Stack, it's written by Jim McKelvey and he was one of the co founders of Square back in the day with Jack Dorsey. And what he describes is that Square was vertically integrated across the software layer, the hardware layer. And if somebody wanted to come in and try to copy them, it's like no, no, no, you got to copy these other 17 things we did. So I'm just reflecting live, Claire, that when I hear you say vertical integration and you go through each of these things, it's like it's a lot of stuff. It's a big investment, but that's a.
- [06:23]
B
Moat and drives huge long term structural cost advantages when the business scales. You were just in the early parts and that's what makes 2026 such an exciting year for us because we'll be bringing to market our more mass market priced product with R2. That's really the key to our long term growth and profitability as well.
- [06:44]
A
I'm pumped for that. I got a couple of family members who are waiting for that to drop. I want to go back to the IPO. So you raised nearly 14 billion, which by my count I think it was the largest IPO for a US company at the time. This may come across a totally stupid question. How did you get to that number, Claire? Can you take us into like the room of, of how you figured out how much capital you would need to fund the business?
- [07:06]
B
If you look back, the original prospectus that we filed suggested a range of proceeds to Rivian that was in the 7 to 8 billion zip code. We were really fortunate to have such a great group of pre IPO investors. And so we, we launched our IPO on the COVID of the prospectus. We had 5 billion of that $78 billion accounted for from our pre IPO investor base. And so it just put us in great footing to go out, tell our story to new investors, build a really high quality book of demand. And ultimately we're able to price our IPO sort of north of 30% above the midpoint of where we started with our filing range. So there was a lot more focus originally on, you know, the minimum that we needed, which was really the $7 billion, which was the bottom end of our initial range. And so it was really through the momentum of the process and some of the execution that enabled us to reach the $14 billion.
- [08:11]
A
That's really helpful perspective. I think a lot of people just with the hype that IPOs get, they forget that it's fundamentally a fundraising event, just in a different format. It was cool to hear you go through, well, this was the minimum amount. And then I don't know if opportunistic is the right word, but basically based on the demand for it, you're able to upsize it.
- [08:29]
B
We had so many new initiatives in our approved view that we could deploy additional capital towards and so wanted to use. The momentum of the IPO and ability to increase prices is part of the process to help us fund, you know, deeper into our longer term roadmap.
- [08:47]
A
Are there any frameworks that you would impart on younger CFOs or aspiring CFOs? Just around how to plan for how much capital you would need here it sounded like you had honed in on like a minimum range, but then you said, hey, we got all these other initiatives we can do, we can fund those too.
- [09:03]
B
Beyond capital allocation, capital roadmap in a capital intensive business like this one is a big part of, of the job and role. It's always looking ahead and also thinking through risk mitigation opportunities as well. So the, the challenge with capital raising is it's not just determinant on your own company's performance, it's also determined based off of the market conditions in the broader capital markets arena. I would encourage everyone to really think about, you know, taking opportunities always when you don't necessarily need capital. So be raising off of, you know, front foot, so to speak. Make sure that you're building deep relationships with investors, both your existing investors and new potential investors. As you think about the building blocks of building a really robust cap table.
- [09:56]
A
For the business, I want to segue to talk about forecasting new products for a bit. And I know that capacity planning is, it's a huge unlock for future revenue. And so you have the Illinois plant, it delivered over 50,000 R1s last year. And with R2, it sounds like that can scale to over 200,000 units. Plus you got this exciting new Georgia plant In the works, how do you think about optimizing capacity ahead of demand? Especially when you're launching this new product.
- [10:23]
B
It'S really important to optimize and sweat the assets that you have. And we actually made a call a couple of years ago to build R2 first in our normal, Illinois plant to ensure that we're fully utilizing the installed capacity that we had in our existing facility before we went on the building blocks of our our new greenfield facility that will break ground in 2026 on once fully built out, have 400,000 units of capacity in Georgia. And so certainly encourage everyone to say, how do I maximize what I have? As you think about a manufacturing facility, these are multi decade types of investments. And so you always want to make sure that you're getting the full return on the invested capital that you've deployed from the get go. The other area that's really important for us is as well. And you see this with, you know, our R1 platform. It's the same issue with R2. We've built a lot of flexibility in terms of the opportunity to add additional variants onto our line. So our R1 line, it's the same manufacturing line that produces our truck as well as our three row suv. And so as we think about the new Georgia facility, R2 is situated on what we call our midsize platform. And so it's a lower cost, smaller form factor platform. But R2, R3, you can imagine additional variants that can be built on that same manufacturing line. And that gives us a lot of flexibility as we continue to launch new products, understand consumer demand, understand the opportunities for us to not just sell domestically, but also export product from our manufacturing facilities internationally as well.
- [12:13]
A
Hey, thanks for listening. We'll be right back after a word from our sponsors. Ali and the team at TABS are building something that directly addresses one of the biggest headaches I see finance teams deal with today. Pulling data from your erp, your CRM, your FPA tools and your usage systems and actually making it all work together. If you're running usage based pricing or complex contracts, you already know how this usually plays out. Contracts live in one system, usage data lives somewhere else. Billing happens in another tool. Revrack gets layered on top at month end and finance ends up just reconciling everything by hand to close the books. This is exactly the problem TABS was built to solve. TABS is an AI native revenue platform built for controllers and CFOs. It brings together data from your ERP, CRM and real product usage into a single system of record. From there it automates billing, collections and revenue recognition without finance having to duct tape workflows together every month. If usage based revenue is core to your business, this is the future of how billing and Revrec get done. Go check them out@tabs.com run that's tabs.com run we've all been burned. We've all bought that enterprise planning tool that promised the world, only to realize six months later that we've basically taken on a second full time job just to keep the software running. I want to talk about a company that was built specifically to kill that cycle, Abacum. I actually remember my very first conversation with their founder and CEO Julio Martin Martinez over three years ago. Back then they were just starting out in Spain. Fast forward to today. Julio moved the home base to NYC and they're the engine behind finance teams at Strava Replit and JG Wentworth. ABCOM doesn't turn you into a software admin. The integrations are actually self service. You don't need a $300 an hour consultant to plug in your ERP or HRIs. And they're doing AI in a way that actually impacts the things FP and A teams are doing every day. Things like creating variance summaries, building formulas and modeling scenarios. If you're scaling fast and you're trying to avoid that legacy platform trap, ABACOM is the move. They're building the future of our tech stack and they're doing it with a CFO's perspective. Go to Abacum AI to see it for yourself. That is Abacum AI. Well, well, well. Here's what nobody tells you about being a CFO. You'll spend four 50% of your time on stuff that is killing your momentum. The best CFOs I know are business leaders who know how to drive growth in heroic fashion. But most of us end up spending our days buried in manual work. I'm talking about collecting receipts, reviewing expenses and manually reconciling spend. It's painful. That's why CFOs need Brex. Brex built an intelligent finance platform that pairs corporate cards with built in expense management plus a team of AI agents to handle the manual finance tasks for you. That way CFOs have more time for the high impact projects that drive growth. You know the shit actually worthy of your CFO time. Bottom line, Brex is automating hundreds of thousands of hours of manual finance work every month across 35,000 companies like Anthropic, Coinbase and Doordash ready to spend Less time buried in expenses and more time driving results. Check out Brex app brex.com metrics it is brex.com metrics please guys, how the hell do I have three kids in daycare? Brex.com metrics there's definitely a tie into other aspects of planning capacity. Whether it's headcount and staffing a project or really anything that requires the foresight to say how much do I need of something? I just want to pull on the tension of sweating the capacity you have. Is the existential risk underfunding something or overfunding something.
- [15:53]
B
You always want to shy on the side of how, how can you actually get more out of what you've built?
- [15:59]
A
Yeah.
- [15:59]
B
And so even as we've worked within our existing lines, there's opportunities to add additional automation, robotics to accelerate the speed in which it takes to build a vehicle, for example, that can allow you to take what was, you know, one install of capacity and increase that over time. So it, it's not necessarily definitive in terms of the capacity that you've installed. There's certain trade offs and investments that you can keep making to ensure you can get more out of what you've put in place. And so would certainly sort of err a little bit on, on the side of, of caution as, as you think about the overall capacity that you want to put out in, in market. But at the same time you do need to make long term bets as well. And so it's how you build confidence in the market opportunity, the market share potential as you're underwriting additional capacity overall.
- [16:53]
A
Are there any rules of thumb here that you lean on for capacity planning? And this is where I kind of just am trying to get into the inside baseball of like, do you say, like, oh, I know we can do this many vehicles in a day here, or like the back of the envelope stuff that you always carry with you.
- [17:07]
B
There's certainly efficiency cliffs that exist within automotive manufacturing. If you think about sort of the ideal size of a mass market market vehicle line, it's typically, you know, spanning within 200,000 to 300,000 units. And so if you were to say I want to reduce the size of my line down to 150,000 units, you're losing a lot of the value of the investment by shrinking it down a little bit. Now as I mentioned before, there's opportunities to over time add additional automation to increase line rates and, and things of that nature. But by and large there is a little bit of a sweet spot in terms of some of the operational Efficiencies that you get and then diminishing returns as you go, you know, significantly higher than that.
- [17:56]
A
That's a really cool thing to hear because you're trying to also forecast what's the TAM for something like this and where in the adoption curve are you? Because I'd imagine a lot of the people who are big Rivian fans, they're the people who put their hands up at the very beginning, like I'm so excited for this, this is like part of my identity. But then you also have to figure out over time like how many other people are out there who may not have been as forward leaning but will be convinced over time that it's the right fit for them.
- [18:22]
B
In our ethos has always been centered around the opportunity for Rivian is not how do we take share from other EV players, it's how do we go after the 90 plus percent of consumers today that are buying combustion engine vehicles and you know, show them the utility capability, performance, technology advantages that they can get with a Rivian product.
- [18:47]
A
That's such a subtle mindset shift, but it's like that's a, that's a way bigger market.
- [18:51]
B
That's what we're driving towards. We're trying to help accelerate EV adoption and electrification.
- [18:57]
A
In a business like yours, inventory can tie up a lot of cash. Has your approach to cash conversion changed as production has scaled over time?
- [19:05]
B
So especially as you're starting out a new product launch, there's certainly a cash consumption cycle associated with building up your raw materials for a new product. You know, the existing inventory as you get to finished vehicles on the end of the line and the time it takes to get those, you know, end of line vehicles out to customers as well. Key area of focus for us is how we're driving efficiency across every single phase of the process. So whether that's the, you know, number of days of raw materials that we have on hand, which is, you know, a sliding scale based off of where the part is coming from, how in time delivery can be of that part, the consistency of that supplier, and then also, you know, tying up it very closely how each of the vehicles are matched to an end customer when once they're completed as well. And then we can get onto rail and out into customers hands in short orders as well. So it's been a big focus of ours over the course of the last couple of years that we've been able to have significant cash generation from working capital. But now as we launch R2, it'll swing a little bit the other way as we build up some of our inventory for the new launch.
- [20:21]
A
It's amazing how it's multi dimensional matchmaking.
- [20:24]
B
Right.
- [20:24]
A
You're matchmaking with the suppliers, can I get the part I need and is it the quality I need? And then you have all these exogenous things from the outside like tariffs and taxes, but then you're also matchmaking with the customers on the other end, especially with the direct to consumer business.
- [20:38]
B
Exactly.
- [20:40]
A
Just to get inside your mind again here, are there any working capital levers that you think are maybe underrated or underestimated in the EV space?
- [20:48]
B
As I mentioned, I think it's really just centered around a focus on efficiency at every step in the process and taking, you know, days out of the system or understanding where you can run tighter or just in time from an inventory standpoint and where you may have certain parts that are more challenging or have greater levels of geopolitical risk or longer time on water. It's something that we're always managing. And again, you never want to be short apart because that's the most costly issue you could have is actually to stop production.
- [21:24]
A
I was a CFO at a small, much smaller startup was vertical software for the automotive sector. And we were the marketplace that helped garages get the equipment in the, in the aftermarket parts to repair a car. And we also got into the tire space. But something we had to learn about the tire space in the garages, that they don't keep like any tires on site because they take up so much space. And like you learn these nuances of a business that has physical stuff and how to best serve that end customer.
- [21:53]
B
You have that sort of times, you know, many hundreds of parts. As you think about some of the larger components that we, we stock on hand to build our cars.
- [22:02]
A
Yeah, you can keep a lot of air filters on site, but I mean, tires and mufflers, not so many. Claire, Federal tax credits, they're a big variable in the EV industry. Sometimes they exist, sometimes they don't really exist. It all kind of depends on the administration. This is going to come across as a really basic question, but can you just explain in layman's terms how federal tax credits impact the consumer buying part of the equation and, and then like how that impacts how you think about pricing and packaging.
- [22:31]
B
There's a couple of different components of the tax credits within the broader EV space. There's both consumer based credits, so you can think about those under the inflation Reduction act bill as being a $7,500 consumer benefit. You can think about it as sort of a discount to the, the vehicle's purchase price that the, that consumers is able to extract as is part of that incentive program. And then beyond that there are, and, and were, you know, additional programs centered around regulatory credits which were more emissions based. You can think about this as sort of its own capital markets of trading between different OEMs who were working towards, in the case of Rivian, getting to buy our credits that we're earning, since we're obviously very low emission standards as a hundred percent EV player in market to offset some of the higher emission vehicles that they were selling as well. And so both have impacts in the market from a pricing perspective because at the same time as you have the consumer benefit through some of the federal taxes, you can think about it almost as a tax on combustion engine vehicles or an incentive for those OEMs to orient more of their production towards lower emission vehicles as well. One of the dynamics that we think will continue to happen in the space is, is we'll also get to more rationalized pricing because you may be a more traditional oem, you're going to get a benefit by selling an EV vehicle that may be multiple thousands of dollars. And so you're also factoring that into unit economics for the products that you're bringing to market as well. So we expect there to be, you know, some, some impacts as we are past the federal tax credits for EVs and seeing, you know, pretty significant changes on the regulatory credit side as well.
- [24:32]
A
In the long term. Do you price the vehicles in a way that it's like this is attractive to people regardless if there are any credits on their end. And then it's just kind of icing on top and better for them if there are.
- [24:42]
B
It's just icing on top and better for them if there are. If you look back, the, the thesis behind the original IRA credits was, was basically to create more pricing parity between combustion engine vehicles and electric vehicles. The mantra of a company like Rivian is find avenues and opportunities through vertical integration, through technology, through the scaling of our manufacturing to constantly find ways to reduce the cost of our product so that we can more naturally provide that pricing parity to the end customer. And if you look at an ev, for example, the total cost of ownership of an evolution, you know, really trumps an ICE vehicle because there's so much less maintenance required. With an ev, you have huge savings as you think about swapping out, you know, fuel for charging or energy that you're putting into your vehicle's battery pack. And so even beyond sort of the initial, what today has been historically a little bit higher pricing at point of sale. There's huge lifetime savings in in EV ownership as well.
- [25:54]
A
And people don't realize how many fewer parts EVs have. It's multiples and multiples less than than a combustion car.
- [26:01]
B
Exactly. No oil changes required.
- [26:04]
A
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- [29:38]
B
R2 is a key driver of our long term growth and profitability at Rivian. If you think about it, we're first introducing R2 into our manufacturing facility in Normal, Illinois. And so R2 doesn't just provide incremental unit economics on the standalone basis. It also provides greater fixed cost leverage for our commercial van and our one vehicles that are being produced in the same facility. So it has a big amplifying effect on our longer term profitability. Now out of the gates, there's always inefficiency associated with ramping up a brand new product, a brand new supply chain. The opposite is also true as we think about the benefits that R2 has being dropped into a running skilled manufacturing facility as well. So it has a much, you know, faster path to profitability than it would have had if it was, you know, in a standalone greenfield site.
- [30:33]
A
Just to make it more broadly applicable to other CFOs out there, especially those who may be operating in AI companies. And now they're investing in all these this capex. How do you think about that? Fixed cost scalability, or you used a cool term for it there of how you think about how it gets better over time.
- [30:50]
B
We think a lot about fixed cost Leverage, because of our large capital expenditures, have large depreciation expense core advantages. You think about the impacts that it has on our unit. Economics is we now can spread investments that we've made in our plant over many more vehicles each year from our production and volume standpoint.
- [31:11]
A
In the software world, you can put out a beta version of a product and you keep turning the screws until you get it right. You're in the car business, you can't really come out with something that's 90% baked. What's that do to your mentality?
- [31:23]
B
As you can imagine, there's so much coordination that has to happen across each and every one of our engineering teams within the business. When you think about designing a car, you may love the exterior design, but then you need to make sure, does the packaging work, does the battery pack, is that going to fit into the design that you've, you know, looked at and you're constantly refining and honing into the full, complete, you know, set of, of parts that needs to go into the vehicle. And the trade offs associated with some of the decision making you made, you may make on, you know, design versus vehicle parts and attributes and how you want all of those components to ultimately fit together. We use a lot of technology in the process because as you can imagine, getting something wrong is incredibly costly. To make a late change in something like a vehicle program, it's great to just look at the advancements that have happened with, you know, CAD based technology where we look at, examine, zoom in on every component in part, can do lots of simulation, even, you know, outside of the physical form world before we've ever built a prototype. And we do the same as well as you think about designing and building manufacturing plants. So we build fully digital versions of our plant and we look at a line layout and sequencing and staffing and you know, each of the pieces of equipment that will go into those environments as well. So certainly there's a lot of advantages with both AI and technology that goes into the development and design process.
- [33:05]
A
So when you're working backwards from a product launch date, where does the timeline usually get tight? What's the long pole in the tent or the hardest constraint that you have to control for?
- [33:14]
B
The hardest constraint for us is, is the supply chain as you think about not just the design and development and work, but you also need to make sure that your suppliers are building the right infrastructure to, to launch and ramp and scale production on your behalf and that they're scaling with very high quality in mind as well. That's the most Challenging piece is through the orchestration of hundreds of suppliers that all need to be on the same page, operating in parallel with us. And you know, if there is a later change in terms of the product itself, it can create a lot of risk in the overall program. And as we talked about, as a chef, you can swap an ingredient or part, still make a wonderful meal. Unfortunately, in automotive manufacturing, you need every single part to be there when you're building a car. And so it's really, you're only as good as your weakest supplier.
- [34:14]
A
I feel like it's kind of biz dev on hard mode because in just the pure software world, you come to an agreement, swap API keys, you build something together, you have to get the deal done, but then you have to constantly monitor and be working hand in hand with these suppliers over time to make sure it actually gets done.
- [34:31]
B
Absolutely. No. They're huge partners of our business and critical to our success.
- [34:37]
A
You're investing in bringing key capabilities in house. You mentioned silicone. What's the finance lens on build versus buy in a business like yours? For something like that?
- [34:47]
B
It starts with first and foremost the business model to understand what is the timeline for payback for an investment like building your own chips. As you think about the opportunity set, it goes far further. What are the advantages that we can deliver in our cars or our vehicles? They're enabled by our ability to do this ourselves. So what's the customer differentiation that it provides? What is the speed potential advantage? And in house silicon, you know, speed is certainly a key driver in terms of the core advantages it provides. Rivian beyond the cost and of course, you know, which dovetails with the, the customer value proposition is, is really the performance differential that you can have as well. So all of those are really key factors. We also have to evaluate do we have the right leadership, do we have the right team? What's the risk of hiring the right talent to deliver a program like this? As you can imagine, building an in house chip team is certainly a highly competitive, sought after, you know, talent pool as well. And we're really fortunate to have just phenomenal leadership in that arena. That gave us a lot of confidence in our pursuit to go after our very first in house autonomy processor.
- [36:08]
A
I can't imagine what your annual headcount planning process must be like. And you can correct me, maybe not may, maybe it's not annual, but I mean, damn, you're planning for hardware engineers, you're planning for AI engineers, you're planning for all the GNA folks to support it. How do you possibly wrap your head around this? Because I know there are parts in your business that wraps up a lot of capital, but people are expensive too.
- [36:29]
B
We really try to self invest or reinvest, so to speak, in areas of differentiation. So in a company like ours, there's so many different avenues that we could invest capital that could drive significant value. But you need to be really judicious in where are you deploying your resources, where are you deploying your capital, how much can you take on at one point in time? And how do all of these programs sequence together as you think about your broad based product development roadmap? All of our capital and human resources allocation always starts first and foremost with the product roadmap because that is the biggest driver of capital allocation and human resource allocation across the company and then creates, you know, the avenue of what do we need from more of the SG and a side of the house as we think about sales volumes, as we think about service, as we think about, you know, the additional end to end services that we provide our customers as well. But with that we've, we've been able to drive a lot of efficiency in the business. So one of the things I'm most proud of is if you look back, our cash OpEx in 2022 was the same as our cash OpEx in 2024. But we 3x the business from a revenue standpoint over that period of time built out a ton of new infrastructure to support our growth and you know, support the much larger car park we were servicing as well. And that again is just back to this mentality and mindset of how are we going to find savings that we can redeploy into strategic areas of investment like AI and autonomy or you know, the customer experience as well.
- [38:17]
A
Claire, is there an atomic unit that you plan headcount around to give you an example, in many of the businesses I've been at, you plan around the account executive as, as like this is the person with the quota and you build the resources around them and then you kind of link what they can sell off the back of the truck. Nope, no pun intended there. It sounds like it's almost backwards here where you plan around the product roadmap and staffing that. Right. And then you kind of figure out the channels in which you distribute it.
- [38:43]
B
That's right. And so it's both. You need to also start with what can we afford as well.
- [38:49]
A
Okay, that's a good spot.
- [38:51]
B
We start with some of those constraints, use those constraints as trade offs. As we think about Decisions we make across our product development, roadmap timing with new vehicle programs and products. You also want to make sure that you're not creating, you know, these spikes or needs where all of a sudden you have the need for excess headcount, but you're not going to need that headcount a year from now as a program cycles off and you start a new vehicle program later. And so you're trying to also optimize how you're using the labor force that you have where you may need to augment or supplement that really sort of smooth out the needs of the business as well. So it's, it's definitely multi dimensional work, but you know, centers around the initiatives and the product plan that we're trying to, to deploy.
- [39:41]
A
So if you'll hear me, I want to take you back to some of your banking days and you helped raise capital for Peloton during its breakout growth and then you helped take them public. What stuck with you from that journey with Peloton?
- [39:54]
B
The piece that stuck most with me, you know, from the Peloton experience was just a lot of the excitement that we had around, you know, storytelling similarly is, is a hardware and software story and narrative and business. And there's a lot of investors you can imagine out there that, you know, don't love hardware businesses. And so how are we really reshaping people's perception of the Peloton opportunity? And importantly, which is really very similar to Rivian, how are we highlighting the engagement and community that was being built around the brand as well, which was such a big piece of their flywheel of customer acquisition and growth and retention. Those were some of the things that certainly stick out to me as we thought about that experience back at Peloton.
- [40:43]
A
Yeah, the storytelling around Peloton has been amazing and like you said, it all links back to the community. I know a Peloton weighs a lot less than a Rivian truck, but it sounds like there were parallels to today.
- [40:55]
B
I mean they were vertically integrated in terms of being direct to consumer, having their own sales channels, service network at the time and building their content, so to speak, which, which was, you know, very different than what other players were.
- [41:09]
A
Doing in market during your banking days. I think you also helped Walmart and business legend Marc Lore on the acquisition of Flipkart. Can you take us into that process? That must have been exciting.
- [41:20]
B
It was a really exciting, fast paced deal. Probably one of the most intense deals that I worked on in my decade on Wall street. And I was about six months pregnant at the Time with my second child. And so I wasn't able to fly with the team to India to do a lot of the due diligence. So I zoomed into the calls, so to speak, around the clock, overnight and then was liaising a lot with both the team that was on the ground from the Walmart side on in Indian as well as our own JP Morgan team and then the team that was stateside as well. One of the things that really stood out as part of that process was because I was sort of operating in both time zones. Unfortunately. I had done a lot of work with Mark and his team centered around the, the cohort model dynamics of the Flipkart business. And this was back in 2018 in India. Most of the digital commerce world was just selling only cell phones and fashion. That was really Flipkart's business. The thesis was that they were going to be able to go into more of the, you know, everything store, so to speak, and sell full assortment of products to consumers. And so we were very focused on both looking at it from sort of a market share opportunity lens but also important to, you know, Mark and his team was looking at it through the lens of the cohort analysis. So how many new customers had to be acquired in each year, you know, how much did the basket have to expand? So how many adjacent new categories would they have to be able to be successful at to achieve a financial forecast that was robust and associated with, you know, Walmart's expectations for the long term? And the core challenge was our teams were working around the clock. And so when I sort of suggested let's redo the model and focus on more of a cohort based analysis, people were like really Claire? You know, that's. That seems like a lot. I convinced the team to do it but ultimately was was really critical to look at the business through multiple different lenses and angles which was what was able to get everyone really comfortable with the investment from at least the outside looking. And seems like it's been a really successful one as well.
- [43:42]
A
So Claire, I'm going to take you into what we call our long ass lightning round. So you've had an illustrious career, but I ask every successful person who comes on the show, can you give us one thing you've messed up on the job before could be here or any previous role.
- [43:56]
B
My biggest mess up was when I was an associate investment banker. I attached the wrong attachment to an IPO working group list and sent it out. So this, there are many, many people copied on this email. It was mortifying experience. I've never done that again. I am now neurotic about opening attachments before I send anything. So it was just a great lesson on both folder management and making sure you have really clean folders with very explicit naming conventions on all of your documents.
- [44:34]
A
You're not the first person to say that either. And I've had a mortifying experience like that saying the wrong thing. And to this day, I mean I could be sending like my kids Christmas list to my wife and, and I'll double click on it twice and open the file just because I still feel that one day that I sent the wrong thing.
- [44:49]
B
Exactly.
- [44:51]
A
If you could tell your younger self something, knowing what you know today, what would you tell her?
- [44:54]
B
I would tell her to grab the mic, you've got something to say and be confident and take it over.
- [45:03]
A
Speaking of grabbing the mic, can you take me into like how you found your own voice on public earnings calls? Like you're at a high profile company, you're coming into a model that has a lot to explain. Was that natural for you? I, I know you were on Wall street before, before, but can you just speak to finding your voice there?
- [45:20]
B
Definitely a learning curve for, for me to step into this role. It's, it's very different to advise someone or give them feedback on their narrative and approach versus being the, the one to craft it and deliberate yourself. The big piece for, for me as, as well at Rivian was making sure I fully understood every single element of our business, which is a very complex, a broad based business is as well. And so that certainly took a huge amount of effort. I was new at the time to the automotive industry and as you can imagine, the research analyst community are very, very big, passionate gearheads and advocates. And so I knew I, I need to know everything about our cars, our technology to really be, you know, a capable partner and you know, selling and telling and the, the Rivian story is as well as one of our core leaders out there in market.
- [46:16]
A
Do you remember the feeling of going into the plant for the first time, like in looking around, was it kind of like a holy shit moment, like this whole thing exists.
- [46:24]
B
So the first time I went to our manufacturing facility was back in November of 2020 as part of my interview process. And the amazing piece was I RJ took me on a tour of the facility, but at the time it was literally, it just had a concrete floor. The scaffolding of our paint shop was being put in and the tour was about three hours long because it was just him communicating his passion of what was to come. And that was what really sold me on the Rivian opportunities. Just seeing, you know, the meticulous detail and passion that, you know, he and the entire team had.
- [47:03]
A
When me and my wife were buying the house we're in now, it was being built by the builder, we bought it on spec and I remember her taking me around like this is where the counter is going to be. I was like this is a big risk. I cannot visualize this in my mind.
- [47:14]
B
I mean this is a 4 million square foot facility. So it's yeah, very, very large, more.
- [47:21]
A
Of a technical one. Can you walk me through your finance software stack? What tools does your team use to get the job done?
- [47:26]
B
Our primary ERP and finance systems are SAP, which is traditional for the the broader manufacturing space and sector. Beyond that, our data lake is centered around databricks platform that we're able to transition all of our data over to over the course of the last couple of years. We have a number of both in house solutions. So all of our digital commerce stack as well as what we call Basecamp which is our interface for all of our supplier partners and is all homegrown solutions that we utilize and integrates into SAP. And then beyond that we have Blackline, we use Workiva, we use Workday, we have an Oracle EPM program as well.
- [48:14]
A
What do you use for expense management? Do you remember that one?
- [48:16]
B
So we use Coupa for expense management and then also for tne we use Navon.
- [48:22]
A
Last one I got for you. What's the craziest thing you've ever had someone try to expense?
- [48:26]
B
We had our facilities team and marketing team expense. It was 1600 yards of recycled concrete to build an electric joyride off roading course that they built in Austin, Texas. We got the bill and we're. What are you guys doing with all of this? It wasn't part of a, you know, construction project. We built this amazing off road course to showcase the, you know, capability of our product.
- [48:54]
A
That's so badass. Claire. This has been a bucket list interview. Thank you so much for carving out time for us.
- [48:59]
B
Thanks so much for having me run the numbers.
- [49:01]
A
Is a mostly media production yelling an intro by Fat Joe. Artwork by Meg delesandro. Show is executive produced by Ben Hillman. Nothing said on this podcast is intended to be business or investment advice. It's the sole opinion of me. A guy who feeds his dog way too much ice cream and has a history of net operating losses. Lol. If you like this podcast, hit subscribe and give us five stars. It will take, like, two seconds. And our algorithm overlords love it. Drink water, call your mom, and have a great day.
- [49:29]
B
Peace.