Startup vs. Corporate Financial Models & How To Build Each For Maximum Strategic Impact - Carl Olson

Their financial model was actually just a download from the ERP.25 workbooks. Each one was about 20 tabs long, going down to $100 at the expense level. Nobody looks at it, not even the FP and A team. Meet the financial architect behind Unity's IPO and scale AI's explosive growth. For 20 plus years, Carl Olson has helped tech companies raise 500 million plus dollars, align product roadmaps with revenue and turn financial complexity into clear growth strategies. From pre IPO scaling to helping founders avoid costly mistakes. And his systems give leadership teams the confidence to execute. Because in high stakes tech, great finance isn't about spreadsheets, it's about momentum.

You've done large company modeling, you've done startup modeling. I'm curious, which do you prefer?

A model is a tool, but it's not the all end all. I can build it from scratch in 24 hours. Funny formula is doing on the back end. Unless you can convincingly talk about how you're going to be different, they're going to mentally discount you down to those benchmarks anyways. The other people on the team didn't know vba.

One piece of advice you would give for our audience. If they want to be better at.

Financial modeling, your financial model needs to be in tune and in line with your business partners. Listen to me curious about what their problems are, how they're approaching things and meet them where they're at.

Welcome to Financial Modeler's Corner where we discuss the art and science of financial modeling with your host Paul Barnhurst. Financial Modelers Corner is sponsored by Financial Modeling Institute. Welcome to Financial Modeler's Corner. I am your host Paul Barnhurst, AKA the FP and a guy and this is a podcast where we talk all about the art and science of financial modeling with distinguished guests from around the globe. The Financial Modeler's Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling and that's why I completed the Advanced Financial Modeler this week. I'm thrilled to welcome to the show Carl Olson. Carl, welcome to the show.

Thank you for having me, Paul.

Yeah, really excited to have you. We start every episode with this question. Tell me that horror story. Worst financial model you've ever seen or worked with.

I had a client one time and I'll call it a financial model. They came in and typical client behavior. They came in, they're like oh, we're having this issue with like effects rates in our model. Can you take a look at it and So I go in and what it turns out is their financial model is actually a series of 25 different workbooks done by each department that were all then uploaded into the reporting part of an old ERP and downloaded. And so their financial model was actually just a download from the ERP and it wasn't, there wasn't anything that they could manipulate. And when you looked at each of those 25 workbooks, each one was about 20 tabs long, going down to $100 at the expense level. And when you talk to the client, everybody's like, oh yeah, there's too much information. We put it together. We spent all this time putting this together, but nobody looks at it, not even the FP and a team. And it was horrible because like the organization's like, oh, it's a huge tax to do this planning process. And then finance is looking be like this planning process doesn't really produce much that's useful. And so they're spending all the, all this time and all this energy to put together something that actually isn't driving the decision making. The company was doing well, there's doing, in fact, it was doing very well, but it was one of the things that I took away. I was like, okay, even despite having not having a real financial model, the company's still making the right decisions, but the model is not the thing that's driving it. So, and it really sort of centered for me, like, yeah, the model, it's a tool, but in the absence of it, like, here's a company that over 20 years is now at $500 million and they haven't had a model yet. They're still making the good decisions that's got them to that place. And so it really reinforced the, the a model is a tool, but it's not the be all end all.

Sure, you can, you can be successful without a great model, you can do planning without a detailed financial model, but they definitely can be helpful and bad model can cause problem. But yeah, no, I, I agree with you. They're not the end all be all right. If they were, we'd be a lot more in demand than we are.

That is very true.

So can you take a minute and just tell our audience a little bit about your background and what you're doing today?

Yeah, so my background is I have about 20 ish years in FPA. I started off my first job out of college was working with a startup. And by startup I mean somebody sketched out an idea for a startup on the back of a napkin at a cafe. And two years later, we were opening a chain of day spots. It actually served as the great starting point for me because the founder was ex investment banker and he was very much about modeling. And so that's where I learned a lot because I was working one on one with him and really got to get up to speed with doing startup models and literally employee number one and seeing it through there. Then from there I went over, I worked on the juice, came up through the ranks in FP and A there sort of focusing on operations, but then moving over to corporate from after Jamba Juice, I decided I wanted to explore my career and so I moved over and did consulting because I wanted one, I wanted to look at what FP&A looked like outside of sort of restaurant retail. And two, I was wondering, is FP and A the right career for me? After consulting for about a year and a half, I came to the conclusion I like FP and A, but really the thing that I'm looking for, it's not technical modeling skills, it's sort of the wider business sense. So I went back to business school, got my mba, and then coming out of my mba, I moved over to sort of larger tech companies. So I worked at Yelp Unity, really understanding the sort of the SaaS and tech business model. And then from there I went back over to startups, worked at a couple of startups, and then most recently I've been consulting both for startups or more established clients, helping them with financial modeling, fundraising, strategic sales, and a variety of other finance things.

Quite a background in there. You got the business you started, you got the two stints of consulting the large companies, the small companies. Sounds like you've seen a pretty good range of kind of how all the different companies operate at different scale and size.

Yeah, and that's one of the things that I took away from consulting, which I really appreciated, was getting to see best practices and worst practices across a wide range of companies in a short time. And I think it really made me a better modeler in that aspect, because going in and picking up somebody's model and then having to to troubleshoot it gives you a different perspective and a different set of skills. And I think it's one of the skills that as you're learning financial modeling, you need to be able to pick up somebody else's model from sort of cold start and just audit your way through it. And in doing so, it gives you an appreciation for how you need to structure your model and make it easy and accessible, not only for yourself, but for anybody else that will come along after you. And so that was one of the things I think really helped me clean up my modeling.

And I'm curious, what percentage of the time did you start over when you inherited somebody else's model and you got into it and said, you know, this just isn't going to work or how often were you able to kind of work with somebody else's model?

Interesting mix. I'd say about 50% of the time there wasn't anything there that was even useful. When I started at one client, it was a public company, almost a billion dollars in revenue. And I started and they handed me their FPA model because their entire department had left. And their FPA model was one tab with headcount, one tab with some revenue numbers and then one tab with everything that people wanted to buy over $100,000. And this is what they were using to provide forward looking guidance to the street. And as you can imagine, there have been a couple of misses on their forward looking guidance, hence why there was some changes happening. So I'd say it's about 50, 50 of coming in and having to inherit somebody's model. Usually I'll go through and rework a large amount of that over the probably three months. But 50% of the time it's coming in because whatever they had is gone. Or you take one look and you're like this isn't. There's no point in trying to update this. I can build it from scratch in 24 hours and it's going to take me 24 hours just to understand what this funny formula is doing on the back end.

Yeah, the super long formula. Like I'm going to spend a day just dissecting this one and there's 10 more of them. Forget it, I'll start over. You know, when you mentioned the company o they had missed some guidance. Right. Not had a very poor planning process. Reminds me what. So I interviewed recently, Jeff Casel, Casale Casselli I think is he's the CEO of board and he mentioned I can listen to transcripts from earnings calls and tell whether company's doing continuous planning or not. Like once they start talking about Mrs. And how they miss some things, it's almost always something wrong in their planning process. And I thought that was really interesting. So it kind of gets to what you were talking about. Right. There was a poor planning process there and it increases that chance of missing. Not that you, you could still miss even if you have a good planning process. But if you don't, the chances are Much higher.

I agree. I think, I mean, planning ultimately is a process. The model is an important component of that process. But end of the day, if the process. I've seen great planning done with very minimal models. I've seen horrible planning done with very complicated models. And this is one of the big things that you need to think about, particularly in startups, and we can touch on it later, is fitting your model and fitting your task to the purpose and the context that you're operating in. Because that's what ultimately is the thing that really drives success, is answering the questions, giving people the answers in insights they need at the time and way that they need them. They don't care what happens in the back end. It's sort of like one of the AI tools. You don't know what's happening in the back end, but you know, it answered your question and it allows you to move forward in the way that you want to. And whatever magic they do back there, that's great hand clap, but we got what we wanted.

Yeah, there's definitely some truth to that. You don't always need to know the sausage making, as long as you can look at it and say, okay, this has helped me, this is what I need.

Yeah. And I think particularly with startups, sausage making just can confuse people and just drag you down into avenues that aren't productive conversations. And so especially with startups really focusing on like, okay, what are we doing and who am I talking to? If it's a founder with no prior experience in FP&A, you do not want to be reviewing exactly how your drivers for this small piece work because you'll spend three hours, leave them confused. And you haven't addressed the elephant in the room of like, revenues not going the right direction.

Yeah. So I want to talk a little bit more about that. I know you've done large company modeling, you've done startup modeling. First, as I'm curious, which do you prefer? Do you have one you like doing over the other?

I think for me, it's interesting. I do like doing large company models. There's a part of me, I mean, the reason I'm in finance and the reason I've been in finance for 20 years is because I. There are aspects of modeling that I love doing and there's nothing more satisfying than sitting down with like a large model, a big data set, and being like, I'm just going to put on my headphones and sort of like bring my vision into reality. So on the larger company, you get into more technical, more complicated Problems that really only finance can solve. And so from the like, I feel as a master of my craft, a large company model is hard to beat. Now on this, on the startup side, I. The thing I love about startups is how it fits into the process and the engagement. You know, you get one, it's tends to be much simpler and so you can do it quicker. It forces you to think at a higher, at a more strategic level, at a business level, and you get a lot more engagement. Like with a small company model or the startup, you're often sitting there with a founder or with somebody and walking through it and asking, answering questions on the fly. And so it's not as complicated, but you can see the real impact. And like when you get, like when you get to the page or you like, you show them, oh, we could use this assumption. Somebody's eyes light up and they immediately start taking action. That's something very powerful about that model because you can see the real connection you made versus a large company model. You do all this great work, you put it together, it goes into a board deck, it goes to the board, and like a week later somebody might say, like, oh, that model was helpful in what we did. But you don't have that clear connection between your impact or like the work that you did in the impact.

Sure, there's a more instant kind of gratification or ability to really see the impact when you're working with a founder directly or a small company versus a big one. There's something fun about just working with a big data set and seeing it all come together, but you maybe don't get to see the impact in the same way.

Yeah, the impact. And you don't get the feedback because like, if you're sending it up through a couple of layers, like you get feedback from your cfo, you get feedback from somebody else, but like the actual, you don't get feedback on how it fit into the actual decision unless they really take time to read you in.

Great point on that. Yeah, I, I agree with you. So I'm curious, I think you did a lot of, you know, large company modeling first. Was it a hard transition to go from, hey, I'm modeling this, you know, billion dollar company doing something really large to I need to do this startup. Right. Because startup, you don't have a lot of assumptions, you don't have data, you're doing a very different process. So how was that trans? What was that transition like?

So I think for me, I didn't find the transition to be as challenging. Partially because my first job had been modeling a startup, very high level there. And then along the way one of the things that I gravitated towards was supporting new businesses. And so even within larger organizations if you're spinning up a new business, it's sort of from it's simple and basic.

There's a lot of similarities.

Yeah, so there's a lot of similarities. But the transition to startup modeling is definitely, there are some differences. And a couple of the things that I think about with all models and I'll walk through how they play out in startups is you need to think about your audience, you need to think about your data and definitions, your time constraints and then what's the actual use and output of that. And so a couple of ways that a startup model differs is like on the audience you're talking to a non technical audience. Like often you're talking to a founder. One the founder might not have a finance background. If they've been running the company, they might have their own KPIs or their own way of viewing and understanding the business. And to be successful you need to be able to understand that and communicate that to them even if they're wrong. Like I had one startup CEO, he had his own way of looking at cash and it made total sense how he was looking at it. Sort of like what cash have I reserved and what cash have I not? But when it came time to going to out to investors, like one thing I had to bridge with him is investors are going to look at it this way, you look at it this way, which makes sense for how you want to run the business. But the out the investor community is not going to, they're not going to understand your metric. And so I need to bridge how you think about this with how we need to present it externally and coach you through it. Because you're the one that's going to actually be on the hook to explain it. So your audience is different. There's nobody to review your work. Unlike in a large company, you got a couple of layers at a startup your CEO might not catch the mistake. If you have a mistake, the first time it's going to be caught is probably by a board member in a board meeting. And that is, that's not where you want your mistake to come out.

Never a good look.

Yeah, never a good look. So you don't, since you don't have anybody else looking over your shoulder, you have to be able to separate yourself from the financial modeling mindset of I'm doing this model and I'm in the weeds. And you really have to be able to step back and take the. I haven't seen any of the model. I'm only looking at what's on this page view. And so that's one of the big differences with the audience.

Makes a lot of sense. You have to be able to look at it not just as a detailed. The big picture. Right. If you're working on a big, huge M and A or operational or even a budget or whatever it may be at a large company, there's going to be multiple rounds of reviews and people will come back and ask all types of questions about assumptions. So there's a good chance that that's all going to be clear, caught. Like you said, you could be with the CEO and maybe, maybe not. It's caught. You know, they may not be financial at all and they really kind of trust you. And then all of a sudden you hear from a board member. Not a good thing. I can remember somebody telling me they were switching their business model and they were going from, I think some. They're going to a subscription model from what they had before. And they had by mistake left in both types of revenue. And it took them a couple months after they'd raised all this capital to realize, why is the revenue not following? And they ended up having to lay off. I think he said it was like 50 or 75 employees. They ended up surviving and ended up eventually selling the company. But he goes, that was one of the most, that was one of the most painful days of my life when I had to stand up in front of everybody and say, basically we made a modeling mistake. We're going to have to let go of a bunch of people.

Yeah, that's one of my worst fears is like having one of my modeling mistakes result in a major change like that.

That. Yeah, I think it is for everybody. You're like, I. You don't want to make some big decision and turn out, oh, that was the wrong decision and it was because I messed up the model. It's one thing if the assumptions are a little off. It's another thing. It was a, a clear mistake in a model.

We've all.

I've made them, I've made more than my fair share, but fortunately none of them have been of that magnitude.

Yeah, and I mean, I think like you said, there's always errors in models and you have to sort of manage those and minimize those. But you're just hoping you're trying to avoid the, the game changing error. The like, oh, we don't have 25 million in the bank error, we're out of money.

Yeah, yeah, exactly. So I'm curious. You talk about the early model and taking the founder through it, it's a lot more simple. How do you go about testing those operational assumptions you're making by the business in an early stage model? Because often you don't have history. You're not getting into a ton of deep drivers. You mentioned you have to get out kind of that 50,000 foot level or, you know, kind of come up high. But what else do you do? How do you get comfortable to say, yeah, I think, I think what we've done here makes sense?

Yeah. So I think with testing the operational assumptions, a lot of it is about triangulation and trying to look at it from different perspectives. So for example, you might have sales model says here's what we're going to sell. But you also need to be looking at that from a sales capacity model. Like what the, what does that look like on the reps? Great, you have a sales plan here, but does this mean that revenue per rep is $2 million a year? Well, if that's the case, like if you can defend that, great. But if you're coming up with each rep doing 2 million a year, probably something else happening there. And so a lot of the operational I find is in triangulating and understanding the linkages between the model, because ultimately that's one of the things you're doing when you're putting together this model is you're trying to understand, hypothetically what would this business look like and what are some of the pressure points. And so you put together a mock up of what you think it's going to look like based on some assumptions, based on industry benchmarks. And especially as you're going through developing a model, one of the things you're doing is saying, here's some things we're using industry benchmarks on, here's some things that we are. Then they're still sort of like tbd. Here's some things we're very clear about. And you're sort of going through and saying, hey, what do these assumptions really move the needle and how do we de risk that there needs to be at least one or two things in the model that are away from the benchmark because that's ultimately your secret sauce and that's what's going to drive your revenue and you should be able to explain those. Like if you're like, hey, our acquisition cost is going to be 50% lower than everybody else, because we're doing X, Y and Z. Great. That is a key assumption and you should test and validate that. But if you're going through and it's like, oh, we did this, we did this and we did this and all of a sudden this productivity number is through the roof and we don't have a clear explanation as to why. That's where you find the operational inconsistencies. And the way that you often use the model is you come up and say, okay, we have this operational inconsistency, so what are we going to do about it? Like in one case we were like, oh, industry average is 30 minutes per customer. Our model saying, we're going to do it at 10 minutes per customer. Why? Well, it's because we redesigned this process. We've done this and we've done that. And so yeah, that is our leverage. Our high volume business model means we need to do this differently. And that is our secret sauce. You can see it right here in this number, like we're going to cut service time per customer in half from the industry average.

FP and a guy here. And as you know, I am very passionate about financial modeling and the Financial Modeling Institute's mission. I have been a huge fan of the FMI for years and I was super excited when they decided to sponsor the Financial Modelers Corner. I recently completed the Advanced Financial Modeler certification and loved the entire experience. It was top notch from start, start to finish. I am a better modeler today for having completed the certification. I strongly believe every modeler needs to demonstrate they are a qualified financial modeler. And one of the best ways to do that is through the FMI's program. Earning the accreditation will demonstrate to your current and future employers that you are serious about financial modeling. What are you waiting for? For visit www.fminstitute.com podcast and use code podcast to save 15% when you enroll in an accreditation today. I really like what you said there. You know, in many places you can use benchmarks if you're not going to be different from others, you know, same call center, whatever, operation, certain things. But then you really need to understand on those areas that differentiate you because every business should have a strategy and that strategy differentiates you from your competitors. So really understanding those operational metrics and what they mean, I think that's a really good way to look at it. It's like you said, hey, if we can do it in 10 minutes. I've seen this again, again, and I think it gets back to your point is so many People, you know, talk sales and go to market. We'll just throw more salespeople at it. It's like, okay, and just assume everybody hits quota. It's like, well, nobody's hitting quota in the past. Why would you assume all the new people hit quota? There's probably something else going on here operationally. Let's dig into it. Let's really make sure those assumptions make sense.

Yeah. And I think that's one of the great things about being a startup model is at the end of the day, this is a business. And a lot of these things are about the linkages between departments and across the organization, which you have a unique perspective to see. And the issues usually don't come up in one area. Like, head of sales is pretty clear on how he's running sales and all of this. But it's the linkages of, like, a common one that comes up all the time. Product. Product roadmap says this sales is dependent on them delivering these features. But then you look and you're like, man, our engineering hiring to deliver that roadmap is way behind. You're like, we only have one recruiter. And, like, can recruit a hundred people in the next six months. You're like, that ain't gonna work if they don't deliver the people. Then all of a sudden you have the cascading effect of, oh, feature delivery slips. Revenue tied to that feature delivery is slipping. And that one little thing can have a rippling impact that really changes the course of the company. But that's where you, by identifying, oh, we have a recruiting capacity constraint. You could solve that problem pretty quickly just by saying, oh, we're going to hire more recruiters. If you catch it at the right time. And you're like, okay, boom, we got it. And so that's how you can use the operational model to sort of triangulate and track your progress as you make progress towards your strategic objectives.

I love the example that you gave hiring, because I think we've all seen that in some area where, like, we're going to hire how many people now? How are you actually going to do that? Or we're this far behind on hiring. Like, I remember going through one and boss was really good going at he would CFO concepts. One of the first things look at is, okay, when do you have all your hires in not realistic. Slide those back a couple months. Do this, okay, we just got our million dollars in savings because what you have here is unachievable. Now then we might have to discuss. But there's Revenue assumptions behind that. Now let's see what the overall impact is. But yeah, you have to be able to do that linkage and have those conversations. Because I think every model, every plan, there's somewhere where there's going to be an unrealistic assumption. And that's where it's important for us to be able to say, to pressure test that and say, help me understand how we can achieve it.

That's what you're. The impact that you're trying to do is by flagging that and driving towards it and making sure that you're managing, executing, managing, executing against it. Because at the end of the day you want to be able to execute like your model. I love modeling. Modeling is great. But outside of the modeling, my biggest role is finance, is making sure that people execute and actually show up with the numbers that we're talking about. Because I can model a million dollars in profit, but if you only deliver 100,000, we have a different conversation on our hands.

Yep. I remember talking to someone that was part of an M and a deal that had fallen apart at the time of the company. And I asked him, I go, how realistic were the assumptions? And his comment was, it was sprinkled with rainbows and unicorns. I just kind of, ah, it was.

One of those deals, I've inherited those before where like they, they come in and they're like, the deal team promised we're going to do this revenue in first year to get there. And you look at their numbers, you're.

Like, uh, oh yeah, I've, I've helped build some models on the deal side too. And there's times I remember being in a meeting with the senior leadership and they're like, okay, these guys, sales are declining and it was supposed to be a high growth company. We put all the assumptions we're going to grow this a ton. None of us believe it's realistic. Why are we still discussing this deal? And the CEO basically said, oh yeah, you're right, let's just move on. And I was really glad because like the last thing we wanted to do is make that acquisition and have totally unrealistic numbers that FP&A has to explain for the next two years. Yep, yeah, I know you can relate to that. So I'm curious, maybe he's talking a little bit. How different is the model when you're raising capital versus the operating model for a startup?

When you're raising capital? It's what you're doing is you're looking at the future and you're trying to convince people that this is feasible and that it's going to be the right long term sort of play. So by definition you're talking about things that you have not yet achieved. It is aspirational. Your operational model is sort of on the other side of it of like, this is what's actually happening. And really one of the things you're going to be trying to do is sort of convince people like, how do we cross the gap from this $200,000 a rep sale to 750,000 or a million sale? Like, what are we doing and how are we tracking on it? So strategic model has a lot of open questions and some big assumptions. And I think coming back to the earlier point, this is one place where I've learned is specifically on a strategic model, you don't necessarily want to make all these outlandish assumptions because investors, they see hundreds of pitch decks, they have a pretty clear idea of what industry benchmarks are. And so if you come in and say I'm going to do 2 million per rep, they'll be like, oh yeah, you got pretty numbers, you have this giant tam, you're gonna, you're gonna crush the things. But like, I haven't seen anybody that's been at that. So even if you put 2 million on the page, they're gonna go back and they're gonna discount it. And so this is one of the reasons why, especially for strategic models, I lean on unless you have a clear point of view, sort of level set on what the industry best practice or benchmarks are. Because at a certain point, unless you can convincingly talk about how you're going to be different, they're going to mentally discount you down to those benchmarks anyways. So don't waste your time in building together all this stuff and try and say we're going to do all this stuff and they have this top level number when they're just going to discount anyways. So focus on the two or three things that you can really make the case that here's how we're different and here's how we're going to do it. And if we win these two things and we're just average at everything else, it's still going to be a big win.

So true. I mean, if you can hit the average benchmarks in a lot of areas, maybe a little better. But if you have some areas you can be a home run in like cost, if you want to be a low cost leader, service, whatever it is, and you can execute on that allows you to accomplish Things that others can't.

Yeah. And this is one of the challenges, particularly with early stage and with like a founder is founders tend to be aspirational. And, and this is the difference. In like a big company, you have the board, you have a bunch of other people that are like level setting, like reality checking. But like a founder, they're out. Their job is sales, they're selling to customers, they're selling to investors, and they're going to be wanting to go for the, the big home run. And so this is the non financial modeling aspect of it, of getting alignment with your team as to what are the numbers you're putting in and how you're positioning it.

Yeah, no, I totally understand what you're talking about. The big aspirations and you're looking at it going, okay, that's nice. Let's talk reality and what makes sense for the investor if we hit those numbers, they'll be thrilled, trust me. But let's, you know, let's talk what maybe a little more realistic at. It's, it's a balancing act for sure. I'm curious. This is a fun question we ask all our guests. What is the most unique or funnest thing you've created in, in Excel or used a model for in your personal life?

So my personal life, funny enough, I was talking about this last night with one of my colleagues. I actually don't use Excel in my personal life as much as you would expect. Maybe because I'm so burned out on it from my, my day to day job. Like I think the most interesting thing I've done recently is done my own. I had to do my P and L for my consulting company. I was like, oh, I've got to dust this off and do it for myself. But I mean, along the way, the one thing that I do use that do it for people might not expect is I use it for project planning a lot just because it's easy. Quick and easy. I have it up and so I'll just do like a project plan and like lay out a timeline pretty quickly or use it to organize documents because I love the fact it has multiple tabs and since I know how to navigate it, I can just like. And then you also have the ability to sort of add numbers together ad hoc, which you don't get in any other platform. So I find it very general purpose for sort of organizing information and anything that involves more than a couple of numbers that works.

I like it. Thank you for sharing that one. What's your favorite shortcut in Excel?

Paste Values.

Yeah, I think that's a very common one. Which, which shortcut do you use for it? There's a couple of them.

So I'm on a Mac, so I. Ah, you're on.

Sorry, we gotta end the episode.

I had to relearn the shortcuts moving from Windows to Mac. Not everything has a shortcut, but that one, thankfully that one does because that was until I found that shortcut. That was probably one of the breaking points. I'm like modeling on a Mac is not going to be the same until I can learn the shortcuts. But thankfully once I learned a couple of the shortcuts, it got me through like 90% of what I needed to do.

Got it. Yeah. I haven't been able to bring myself to make that switch. Even though there's a lot of things I love about Mac, it's the Excel side that's probably the biggest thing that holds me back.

Yeah, well, I think in context, like in several of the startups, like I've been using Sheets much more and it's like, that doesn't surprise me is this whole trade off I have, like, for a while I was very much against sheets. I was like, ah, it doesn't have a lot of functionality. But then I sat there, I was like, man, the engagement I get from a partner on sheets is a order of level different from using Excel. I send them an Excel file, we meet, they haven't even opened the file. I send them a Google Sheet and I can see that they're in there making changes and really engaging with it. And so I've had to bite the bullet and say like. And this is one of the biggest learnings for me is like, meet your business partners where they're at, not where you want them to be. And so despite me thinking Excel's much better if they show up and like, they do the work that I'm asking them to do and they do it in cheats. If they do it over email, I just want them to make those decisions and get that, get those inputs from them. And my job is to do the messy sausage making with the rest of it.

Sure, yeah. And you can do it in either tool there. There are benefits to both of them in that collaboration side. Small companies, a lot of them love Google Sheets.

Yeah. So you sort your way through it. Even if Google Sheets, their shortcuts are completely different and then you're scrambled from like three different systems.

Yeah. There's a tool out there, I think it's called Sheet Wiz. There's One of them that will give you like 10 of the most common shortcuts. I don't know if it works with Mac in Google Sheets, they'll be the same as Excel. It's like a plugin I have a friend that uses. He's like, I can get by with with it now. Because the shortcuts were the hardest part for him.

The thing that I found out was when Google Drive allowed you to upload an Excel document and then the users could look at it as a Google Sheet. That made my life a lot easier because I could work in Excel and then they could consume it in sheets how they wanted. And so we were sort of both. That was like the nice attention of like, both of us are happy in consuming it the way we want to.

Yeah, that's a great point. When you can just, I do it how I want. You see it how you want. All right, so we're going to move to our rapid fire section. So I'm going to explain how this works. This is a standard questions we ask every guest. We don't allow the answer. It depends. Even though we know it does. In some cases you have to pick a side and then you can elaborate on a couple that you're really passionate about at the end. Because we do realize in the real world it does depend, but just kind of for fun here. So circular references and models. Yes or no?

Necessary evil.

Vba. Yes or no?

Yes. With caveats.

Horizontal or vertical model? Do you like it stacked on one sheet or lots of sheets? Vertical, vertical. All right. Dynamic arrays in models. Yes or no?

Yes, when I know how to use them.

That's a good one. What about fully dynamic models? Do you think we're there yet?

What do you mean by a fully dynamic model?

Like using dynamic rays 100%. If you adjust something, the entire model will adjust.

I think it's conceivable. I'm still. Dynamic arrays are a little bit new to me and so I'm still learning exactly what they can do. But there's definitely aspects out there where they can automate some things that were previously involved, like 50 lines of code or 50 lines of Excel to get to an answer you can now do in like one formula.

Yeah, it's pretty amazing, but yeah. So sounds like you're still kind of getting familiar with them. They're a lot of fun. You'll enjoy that. External workbook links.

Yes.

All right. Usually I get a no on that one. I might have to ask you more at the end. Named ranges yes or no?

Yes.

Do you follow formal standards like fast or smart or do you kind of have your own standard you use?

Until last week when I was listening to your episodes, I did not even know there were standards boards. So I have my own standards that I've come up with over the years.

There we go.

My team on that works.

You think financial modelers should learn Python in Excel?

No. And we can talk about this with the VBA at the end.

Okay. What about Power Query?

Yes.

What about Power bi?

I haven't worked in a Microsoft environment for a long time, so I've never actually I looked, I was like, power Bi looks awesome. And then I'm like, oh, I, I, I'm on Mac, not in.

Yeah, yeah. So it's one of those questions I can skip because you're on. Yeah, I get it. So it. Will Excel ever die?

I don't think it will in my lifetime.

That's the typical answer we get. Do you believe financial models are the number one corporate decision making tool?

The model isn't, but the process of getting a good model is.

Okay, I like it. And what's your lookup function of choice? What, what lookup function do you like to use?

Xlookup was a godsend when it came because prior to that I, I was like, ah, look up. And then like I saw I found xlookup. I was like, I am so happy that that eliminated so many. That cleaned up a lot of my modeling.

Yeah, I like xlookup. I'm a fan of that model. So thank you for sharing. You wanted to elaborate on a couple of them there. Go ahead.

Yeah. So with so VBA and sort of Python is an interesting topic. I know I've seen a lot of people with different opinions on it and like so one of the stories that I had from my career is earlier in my career I got so by the way I started off, I had a computer science background very in college and then I ultimately left computer. I was like, I don't know, this doesn't keep me interested enough. And then I found Excel models that sort of took over that for me. So I have a background in coding and early in my career I was really big into VBA because I was doing a lot of operational finance and reporting. So I had to produce like a couple hundred reports each week and I went through and spent a bit of time with VBA and automated it. So VBA is a very powerful tool. But one of the things I found was because I automated stuff and I got it so good it actually I thought I was Going to help my career and all this stuff. I realized at a certain point I'm like, oh, I boxed myself into a corner because. And this is one of the challenges I had is I wanted to, Wanted to move and work on new things other than this reporting. And I tried to offload it to people, but one the other people on the team didn't know vba, so they picked up, they're like, I don't know how to use or maintain this. And so when it came time, there was like, well, it's going to take me 20 hours to do this, but Carl can do it in an hour, so we're not going to keep him doing that. Keep him doing that. And all of a sudden I'm like, but I want to do these other things. And so this was one of my big takeaways, is really matching how you're modeling and matching the technology you're using with your team because you want somebody else to be able to come in and pick it up. Especially if you're thinking of your career growth and being able to do different things, you have to be able to onboard people. And if you've developed, if you've developed a system that works super well but only you can run it, you're going to like, I. I paused my career development for six months because I had to basically undo all the VBA work I did and get it in a way that I could hand it off to somebody else so that I could transition that model. And so I see the same thing with Python. I think one of the things I've come to is I will use vba. This is why it's a caveat. And I had the same conversation when I looked, I was like, should I learn Python or not? And I was like, at that point, I'm like, I want to move in more into management. I'm moving away from this and I think there's other tools. And so one of the things I came to is my screen is I'll use VBA and sometimes Python for certain steps. Like if I need to do a bunch of cleaning or one off, I'll use that. But I don't make it a foundational part of the process in the model. So if you could use vba, cool. Like if you have a template and you want to duplicate this template 40 times to do business partner reports, cool. Use VBA to do that. Because you can do it without. You could just have to. It's going to be a little slower, but you can like copy, copy and switch and so if you can automate that step with vba, cool. But if somebody opens up the workbook, they. And they're like, I don't know vba, they should still be able to go through and do what you do. So my sort of thumb is use it to sort of leverage and scale what's necessary, but don't integrate it into the sort of core operations unless you specifically have a team around you who has that skill set and can transition it and maintain it.

Sure. Unless you're confident there's somebody there who can maintain it, transition it, avoid using it outside of kind of tasks that are not core to it.

Yeah. And I think with AI, that's also changing it because now, like, you don't have to learn in depth for, for better or worse. But there are definitely things with AI like, you can go in and like, you can. You can use ChatGPT and slap together, like, you're like, I got a dirty data set. It's my first time processing it. You can slap together some VBA code and run it through the data set pretty quickly and be like, okay, cool, I. I just chopped out 80% of the junk, and now I'm going to go finish the last 10%.

Very true. All right, well, I appreciate kind of, you know, running through that. I loved your thought on vba. I think you made a lot of good points there. As we wrap up, I'm curious, is there one piece of advice you would give to our audience if they want to be better at financial modeling? Is there one thing you've learned over your career that you would offer as advice?

I think one of the big things, particularly with. So I'll say I'll focus on the business partners, because that's ultimately what it is, is your financial model needs to be in tune and in line with your business part. And the steps being there is one, is listen. Listen to me curious about what their problems are and how they're approaching things and meet them where they're at. Like, ultimately, we do want them to learn more and coach them on finance because I feel my job is, I've been successful. When I walk in a room, they're like, oh, yeah, you weren't here last week, but so and so was talking about the, like the, the CAC and like, LTV ratio. I'm like, oh, finance is happening even when I'm not in the room. Like that is that. Honestly, that's one of the best marks. I'm like, then I've shown you enough that you're using because Finance is a tool. If you're using this tool, even when, when I'm not in the room, then I can focus on other things and we got it. But to get you there, it involves listening and sort of meeting people where that. And helping them take the individual steps to become a more savvy business partner and ultimately getting them to be a better business leader that makes those robust financial decisions when with or without you.

Great advice. I really like that and I like being able to make those decisions with or without you. The example you shared. Oh, great. They covered it when I wasn't there. Well, we're. Our time is pretty much up. I've really enjoyed chatting with you, Carl. I've loved having you on the show. You know, if our audience wants to learn more about you, maybe get in touch, you know, something you're doing in consulting or any other ways, what's the best way for them to reach you?

LinkedIn.

I figured as much. That's a pretty common answer these days. Go figure out.

Yeah.

So, well, thanks again for joining me. It was a real pleasure and you have a great rest of your day.

Thank you, Paul. Thanks for having me. Great talking to you and I really appreciate all the content and stuff you put out over the years.

Thank you. Appreciate that. Financial Modelers Corner was brought to you by the Financial Modeling Institute. This year I completed the Advanced Financial Model Modeler certification and it made me a better financial modeler. What are you waiting for? Visit FMI www.fminstitute.com podcast and use code podcast to save 15% when you enroll in one of the accreditations today.