Episode 8 - Charting a Start-up’s Journey: Financial Models for start-up’s with Zainab Nwachuku

Written By Paul Barnhurst

Show Notes

Welcome to Financial Modeler's Corner (FMC) where we discuss the art and science of financial modeling with your host Paul Barnhurst. Financial Modeler's Corner is sponsored by Financial Modeling Institute (FMI) the most respected accreditations in Financial Modeling globally.

In this episode, Paul Barnhurst is joined by Zainab Nwachuku, who is the Managing Director and the lead Financial Modeler of The Intellectual Plug which is a consulting firm in Nigeria that helps founders get ready for funding with investors.

Zainab is extremely passionate about financial modeling and hopes more women who are fond of numbers choose to join the profession.

Listen to this episode as Zainab shares: 

·      Her journey from accounting to financial modeling

·      Her experience and learnings from the worst models she has come across 

·      Her experience working with founders to help turn there ideas into a financial model that can help make their dreams a reality

·      The horror story of linking workbooks in Excel

·      Her unwavering passion for Modeling

·      Her position on controversial modeling issues, including circular references, dynamic arrays, modeling standards, and more

·      In this episode, Paul shares some great modeling people and companies to follow to stay up to date on modeling.
 

Sign up for the Advanced Financial Modeler Accreditation or FMI Fundamentals Today and receive 15% off by using the special show code ‘Podcast’.

Visit www.fminstitute.com/podcast and use code Podcast to save 15% when you register.

Go to https://earmarkcpe.com, download the app, take the quiz and you can receive CPE credit. 

Quotes: 

“I feel like you actually have to make those mistakes yourself to even get it to understand because otherwise, you know, how do you even know that oh, it's not a model?”

“Simply being able to actually build a financial model has really taught me a lot about communication.” 

“If you're not listening to the founder, whether or not they can implement some strategies if you don't understand that from the founder, the model isn't going to make sense.”

Follow Zainab:   

Website - https://theintellectualplug.com/

LinkedIn -  https://www.linkedin.com/in/mszainababu/

 

Follow Paul:

Website - https://www.thefpandaguy.com/  

LinkedIn - https://www.linkedin.com/in/thefpandaguy/ 

Instagram - https://www.instagram.com/thefpandaguy/ 

TikTok - https://www.tiktok.com/@thefpandaguy 

Twitter - https://twitter.com/TheFPandAGuy 

YouTube - https://www.youtube.com/@thefpaguy8376 

Follow Financial Modeler's Corner 

Must follow LinkedIn Profiles:

 

In today’s episode: 

(00:22) Intro;

(00:51) Welcoming Zainab;

(01:06) The worst financial model Zainab has ever seen;

(02:27) Zainab’s key learning experience from the worst financial model;

(03:30) Zainab’s background;

(05:00) What is fun and challenging about Modeling;

(07:05) About the Financial Modeling Group for women; 

(09:50) Women in Modeling;

(11:17) About The Intellectual Plug;

(12:38) Common Company challenges; 

(14:21) Funding routes for Start-ups in Nigeria;

(16:10 - 16:57) Validate your Financial Modeling Skills with FMI’s Accreditation Program (ad);

(16:58) What does Zainab love about working with these start-ups;

(18:36) Challenges Zainab faced to build a model for early stage companies;

(20:57) Advice on building models for early stage companies;

(24:16) Rapid Fire;

(28:07) Nugget on Financial Modeling;

(29:45) Connect with Zainab;

(30:30) Paul’s best picks:

·      The way Zainab talks about terrible models.

·      The way she communicates her journey of building models.

·      The horror story of workbooks.

·      And her incredible passion for Modeling. 

(32:00) Rapid Fire: The Pattern So Far;

(35:18) Must Follow LinkedIn Profiles

(37:22) CPE Credit

(37:40) Outro

Transcript

Host: Paul Barnhurst

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. This is a brand new podcast where we will talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modelers Corner podcast is brought to you by Financial Modeling Institute.

FMI offers the most respected accreditations in financial modeling. I'm really excited to welcome our guest today on the show. Today we have Zanib Nwachuku from Nigeria with us.

Welcome to Financial Modeler's Corner today!

Guest: Zainab Nwachuku

Thank you.

Host: Paul Barnhurst

We're really excited to have you. So we're going to jump into one of our questions we like to ask everybody before we talk a little bit about your background.

Can you tell me about the worst financial model you've seen in your career?

Guest: Zainab Nwachuku

Yes, I can. In fact, I don't want to call it a financial model because it's been multiple spreadsheets. It's terrible financial projections. I think it is not worthy of being called a model.

Host: Paul Barnhurst

Yeah. I think sometimes it's only projections. It may not even qualify as a model.

Guest: Zainab Nwachuku

Yes. It doesn't even qualify as a model.

Host: Paul Barnhurst

I like that, I'll remember that! I like to call them, when they're really bad, I refer to them as Franken models, kind of like Frankenstein, right? You know, they're just put all together and just a total, total mess. And I've built a few!

Guest: Zainab Nwachuku

Yes, me too! I mean, I feel like you actually have to make those mistakes yourself to even get it to understand because otherwise, you know, how do you even know that oh, it's not a model? It looks amazing, and it's not everyone who has like a good grasp of Excel, so you think you're doing really well.

Host: Paul Barnhurst

Agree! And when you first start, there are things you do where you think it's a good idea, and then you look back as you've gained some experience and you're like, wow, that was awful, what was I thinking?

Guest: Zainab Nwachuku

Yes!

Host: Paul Barnhurst

So I think, I think we're on the same page there. So, you know, from some of those, I'll call them financial projections or models that were just, you know, really poorly designed, what have you learned from that experience of seeing, you know, those poorly designed models? What has it taught you?

Guest: Zainab Nwachuku

Well, it's taught me that you can’t be unorganized. You know, organization is key, and it's because at the end of the day, when you build a model, you're not building it to just give someone some set of formulas with financial statements, you want them to be able to use it. They need to make decisions, from using their models.

You know what? Simply being able to not just do projections and actually build a financial model has really taught me a lot about communication, you know, being able to clarify what I'm saying to other people with a model.

Host: Paul Barnhurst

Thank you for sharing that. And I love the part you said about, how it's taught you a lot about communication. Because I think a lot of people have a misconception that modeling is about spending all your time in Excel. And if that's all you're doing, there's probably something wrong in the process.

Guest: Zainab Nwachuku

Yes!

Host: Paul Barnhurst

Yeah, I really like to emphasize that! So, thank you for telling us a little bit about your worst model. What I'd love to do now is just give you a couple of minutes, if you can walk us through your background, you know, kind of how you got into finance, what you're doing today, and just a little bit about your story, your journey.

Guest: Zainab Nwachuku

Okay, sure! So I got out of University and I studied accounting. And so all I wanted to do was accounting, all I wanted to be was an accountant. I wanted to work in like one of the big four accounting firms, but for some reason it just didn't work out. I kept writing the exams and not passing right, and then I got a job in a tech company as an accountant, and then it was just so boring. I didn't like the job, it was just a repetitive task of going to the bank, doing reconsiderations, it was so boring.

And then I started to realize, oh, wait! I can do something else with Excel. It doesn't have to be just these records. I can put these records together to tell a story with Excel, right? So that was like, that was mind-blowing for me as at the time I was still in my nine-to-five corporate job.

And then I started to do a lot of research. I came across the Corporate Finance Institute and I was improving my Excel skills, learning more, so it was like a blend of my accounting and Excel. It was awesome! I'm so glad that I ported from accountant to financial model!

Host: Paul Barnhurst

Thank you for sharing a little bit of your story, and it sounds like you pretty quickly realized accounting wasn't what you expected and you were bored, you didn't feel challenged.

Guest: Zainab Nwachuku

Yes, exactly!

Host: Paul Barnhurst

So, I'm curious, what is it that you find challenging about modeling? What is it that you enjoy about it so much?

Guest: Zainab Nwachuku

Okay, so, modeling is like creativity for an accountant, right? Because an accountant is expected to keep records and mostly record keeping. Well, modeling is like, I mean, being creative with your accounting, of course, creative accounting actually means fraud, so not that, but being creative with your accounting, like being able to put reports together, being able to tell a story from, you know, all of these records that you put together. That takes a lot of thinking. You would have to be intentional about that.

So that's what really challenges me with modeling. And we use Excel as a tool. Excel is like a whole universe. I feel like, oh, I've learned all these formulas and I can put them together, and the next thing, there are macros, what is macros? So confused! So it's like I have a path in which I keep growing and I keep expanding, that's what I really love about modeling.

Host: Paul Barnhurst

I appreciate you sharing that, and I love the part you said the creativity, cause I like to joke, and I think this applies a little bit to modeling, but I will say, “What's the difference between FP&A, so financial planning and analysis and accounting? And I will always say when an accountant gets creative, they go to jail. When an FP&A professional gets creative, they get promoted”.

You know, kind of like the financial modeler, the creativity is encouraged, whereas when you're doing accounting, it's like, just record the books.

Guest: Zainab Nwachuku

Yes. Just record the books! And if you're creative, you're going to jail. Perfect, and that makes so much sense!

Host: Paul Barnhurst

Yeah, so that's kind of the joke, I mean, obviously there are some areas you can be creative, but it's not the same. You know, modeling, you get that forward-looking. So yeah, that's what I like to joke! Accountants always hate when I say that.

So you and I got introduced through Daniela Stein Fairhurst and her modeling group for women. Can you maybe talk a little bit about that group? Tell me about it.

Guest: Zainab Nwachuku

Okay, so I think I just started to talk about it a bit when I was telling you all my background. I started to think, once I realized what financial modeling was, and I had decided to leave my nine-to-five, I started to think, who else is out there doing modeling?

I literally Googled women in financial modeling and I found Danielle. Joining Danielle's group has like opened me to a whole bigger universe. Cause you know, you can actually do financial modeling in a very simple way with like simple formulas, whether it's a bulky sheets or whether it's like grouping on one sheet, but then being a part of a group and watching the other ladies do Excel World Cup and things like that, opened me up to so many other formulas in Excel and so many better ways to explain things, to explain the logic behind your finances or your model and what you should look for.

Host: Paul Barnhurst:

Gotit, yeah, I'm sure it's opened the world to a lot of opportunities. I like how you mentioned Financial Modeling World Cup. I actually was a direct messaging on LinkedIn with Daniela this morning about that. I just competed in my first Excel Esports and the Financial Modeling World Cup this week, and it was, it was humbling to say the least, let's just say my name mostly stayed at the bottom of the leaderboard. Pretty consistently!

 

Guest: Zainab Nwachuku

I know, right? And it's like, I can't even believe there's like a whole universe out there of people like me and we all want to be able to play a sport together. I'm so glad to hear that you've taken it and it was humbling. I'm looking forward to my own first sport that I'm gonna do! It's, it really looks like a lot! In fact, it makes me feel like, am I really financial modeler?

Host: Paul Barnhurst

Yeah, it can, it can be a little humbling when you see how good others are, but I found it was a great experience for me and you know, like I said, I'm glad, I know Daniella encourages people in the group to do it, and I'm glad you found her and you're part of that group. 'Cause it sounds like it's made a big difference for you in your modeling.

Guest: Zainab Nwachuku

Yes, it has. It has really helped me improve the way I do my models, and I do my models with startup founders, and they want to be able to use these models to speak with investors. They need to understand the logic behind their business. They need to understand the imputes that are driving their business. So, being a part of a group, and learning new formulas and things has helped me to be able to communicate that better with them.

Host: Paul Barnhurst

That's great that it's helped you communicate better with your partners and with the clients that you work with.

Next question I want to ask you about, being a woman in finance and financial modeling, you know, obviously, you're the minority, so to speak, most modelers tend to be male, what do you think it will take to increase the representation of women in the profession? How do you think we get more women to be involved in this field?

Guest: Zainab Nwachuku

Honestly, I feel like this podcast that you’re doing, that’s like one way, right? Because when you know, and you see that there's another woman out there who's doing it, then you feel like you can do it as well, right? But because, you know, you don't see a lot of women, you don't really hear women speaking, Danielle is the like only one who's out there and out loud, but things like this podcast and other women seeing other women doing modeling, I think it would enlighten them to know that, hey, if you feel like it, you can do it!

Host: Paul Barnhurst

I think that's a great point. I think the more they see that, hey, there are plenty of people in this profession, it's a good profession, regardless of gender or anything else, if you like modeling, you like numbers, come join us, you're welcome! It doesn't matter who you are!

Guest: Zainab Nwachuku

Come join us! Yes! And it's going to be fun, yes!

Host: Paul Barnhurst

I can feel your excitement there as you talk, I could tell you're passionate about this and that's what we need is people that are passionate out there sharing why they're passionate. I love that!

So, next question here! So, you are currently a managing director and the lead financial modeler for The Intellectual Plug. So can you tell our audience what that is and what your role is with the company?

 

Guest: Zainab Nwachuku

Yes, sure. So, The Intellectual Plug is a startup consulting firm, and what we do is we help founders get ready for funding with investors. So whether they're looking for depth funding or investors to own their company shares with them, we help them get ready. What that means is relative to messaging, we help them put together their feature, relative to their numbers, we help them put together their numbers. What I do is the financial model, so I do model for founders, which basically helps them figure out what the value of their company is, figure out how much money do they need to even start a business or expand it, depending on what they want to do. So if you need help with that or investor funding, I’m your girl! If you need messaging done, the pitch decks or the company profile, then my husband is your person. We actually own the start-up.

Host: Paul Barnhurst

Fun! That gives you an opportunity to work together a lot. So exciting!

 I'm curious, so when companies first come to you, when you first meet with them, what is that like? What are some of the, you know, challenges they have at the beginning, and how does that process go?

Guest: Zainab Nwachuku

Most times when founders come to us, we see, you know, maybe they want to raise 200,000 $ right? And then it's like, okay, so what do you want to give your investor in return for the 200,000, and they're like, maybe 10%. And I'm like, oh, awesome, so your company's valued at 2 million. They're like, no, and I'm like, well, you actually did say that. Right? And so they don't know what they want to do, the money, they just have like a hypothetical figure in their minds. So you have to start breaking down the drivers of your business, what you spend money on, how do you make money and reviewing these numbers to sort of put together for them a financial model.

Host: Paul Barnhurst

Got it! Yeah, I can imagine a lot of times people are very excited and they don't really, have an understanding of how it works, but they know they want money. And so it's like, oh yeah, I want this and I'll give you that. And then you start showing them the math and they're like, wait, but that, that doesn't make sense to me.

Guest: Zainab Nwachuku

Something’s wrong, yeah!

Host: Paul Barnhurst

 Yeah, exactly! This doesn't add up. And I'm sure it's a steep learning curve for some of them. I imagine some of those conversations could probably be difficult, and some are very educational.

Guest: Zainab Nwachuku

Yes, because sometimes they actually come to realize that the money that they need to spend is not what they want to spend. But they come to realize that, hmm, the industry they're looking to go into has a lot of issues that they don't even have the expertise for, so yeah.

Host: Paul Barnhurst

I could imagine where that would be really enlightening and, you know, very educational.

I'm curious, how does the funding typically work in Nigeria? Are you mostly seeing venture, you see debt? Like what are the typical funding routes for a startup there?

Guest: Zainab Nwachuku

So, we're mostly seeing venture. Most of our clients maybe have already registered. They're looking for venture funding. Sometimes it's debt, but that's very rare, actually. And other times it's even their family and friends. Some people have the family to give them the money for what they want to start because you know, they might not be starting large scale.

Host: Paul Barnhurst

Got it. That makes sense. And is it mostly tech companies that you're seeing, like software or what do you mostly see in the way of clients?

Guest: Zainab Nwachuku

Yeah, okay, so mostly it's brick-and-mortar-based businesses that want to start using tech. I have a client that is in the logistics industry and now they want to build an app so that you can order a ride with your app.

Host: Paul Barnhurst

Got it. Yeah. You definitely see a lot of that where people want to move whatever they're doing to software as a service and have that subscription revenue. Everybody loves subscription revenue, right?

Guest: Zainab Nwachuku

Yes, everybody loves the monthly income.

Host: Paul Barnhurst

It's amazing, I mean, I remember when I was growing up, everything was, you know, when it came to software, it was all installed on prem, you put it on your desktop, you paid the one time license. Now everything, not just software, everything's a subscription, right? I can do a haircut service as a subscription. I can buy my clothes as a subscription.

Guest: Zainab Nwachuku

Yes, groceries, a subscription!

Host: Paul Barnhurst

You name it! Somebody's made it a subscription now. Everybody's addicted. We love that recurring revenue. It's a beautiful thing, but it's been interesting to watch.

Commercial break

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Host: Paul Barnhurst

So what is it that you love about working with companies in that startup phase about helping them raise funding? What is it that you enjoy about that stage of the company?

Guest: Zainab Nwachuku

Oh, okay, so I feel like I really like the conversations with the founders. It's really nice to speak to someone and hear all of their ideas about something you want to start. Sometimes it sounds very revolutionary, and then you show them the numbers and they go, ah, no, I can reach this number. It's quite interesting. And then we work with people from like different industries, so it's nice to see how somebody is doing something in logistics, but it could also be implemented in fashion.

So, I just like different business models and I like the thinking process for figuring out, hmm, how do I represent this person's business? That's just next level awesome.

Host: Paul Barnhurst

I love that, next level awesome! I'll remember that phrase. It sounds like you love just helping them think about the early stage, getting to see a variety of things, and probably unlike accounting where you mentioned it was boring and there was a lot of repetitive work, it sounds like you get a lot of variety, which you thrive on if I'm hearing it, right.

Guest: Zainab Nwachuku

Yes, yes, exactly.

Host: Paul Barnhurst

Yeah, it's definitely nice to have variety. I've definitely had some of those roles where you're just like, all right, you know, you feel like it's Groundhog Day if you know what movie that is. It's a movie with Bill Murray where every day repeats, and he's stuck in a loop. Sometimes that's how some jobs feel where you're like, all right, is it going to be any different today?

So what are some of the challenges you face when modeling for startups? I know there's the initial conversation and helping them understand the funding side, but what are some of the other challenges? Are there some real challenges around assumptions or what are the hardest things to build a model for such an early-stage company?

Guest: Zainab Nwachuku

Okay, so I feel like where I have had a really hard time with founders themselves, because I listen to them and then I understand what they're saying, now I need to translate what they're saying into formulas in Excel.

So putting all those if statements and trying to figure out the logic behind, you know how this person wants their business that's actually challenging that could take me longer than I wish it were if I was building something that I'm already used to and it's that challenge that I really like

Host: Paul Barnhurst

Got it. So it's really, it's the translation process. It's taking their vision, taking their statements and figuring out, okay, how do I turn those into assumptions that allow me to create a model that makes sense? I think we've all been there where you're like, okay, how do I model this part?

Guest: Zainab Nwachuku

It's like, if this is going to change, then this should happen. But then it's like, if this is going to happen, I also need to put in some other variables. How do I do that?

Host: Paul Barnhurst

Yeah, it's like, okay, so in this scenario, I need this, in that scenario, I need that. And how do I make sure I can toggle them and easily update them? Cause if I build it this way, yeah, as I'm hearing you talk, it reminds me of the importance of, so, I had the executive director of Financial Modeling Institute on the first episode, Ian Schnoor, and you know, I love, he has a quote where he says the number one problem he sees with models is design. It almost always comes back to how we design things. And as I'm hearing you talk, it's a real challenge to think through the logic and make sure the logic works and we can design it in such a way that it's easy to update, it's easy to make those changes because sometimes you can build it and then you get done and they come back, oh, well, but I want this, and you're like, all right, I'll get back to you in a week.

Guest: Zainab Nwachuku

Yes. And it's like, aah, okay.

Host: Paul Barnhurst

We've all been there. You finish something and then they tell you what they want, all this other stuff, and you're like, oh, that's not good.

So if one of our audience members out there is looking for some advice about building models for early-stage companies, what would you say to them? What is the advice you'd offer?

Guest: Zainab Nwachuku

If you were looking to actually build for early stage, I'll say, listen to them. You have to understand where they're coming from. At the end of the day, their model is only going to make sense if they can actually achieve what they say they can over the next couple of years with their model. So if you're not listening to the founder and knowing, like their capacity at whatever level they're at and whether or not they can implement some strategies that you think will maybe increase revenue or reduce cost or anything, if you don't understand that from the founder, the model isn't going to make sense.

Host: Paul Barnhurst

 Got it. So I'm hearing, and this is a theme I've heard before, but the most important thing is communication. The advice is learn to listen, learn to understand the business and the needs of your client.

Guest: Zainab Nwachuku

So repeating back to them, and see if that’s how they like it.

Host: Paul Barnhurst

I always try to repeat it back. I think you said it very well, I just want to make sure I understand it and the audience, you know, gets the opportunity to hear it more than once. Cause you know what they say, you got to hear something what? Three, four, five, probably for me, eight or nine times before it sinks in.

Guest: Zainab Nwachuku

I think I hear it like seven times, yes!

Host: Paul Barnhurst

If you ask my better half, my wife, she'd probably say it takes about 20 or 30 times, but that's another story, so…

I'm curious when you're building a model, how much of your time is spent with the customer versus how much of your time is spent in the model, in Excel? Do you know, kind of a typical percentage.

Guest: Zainab Nwachuku

Hmm, with building our model clients we sort of put together a process, right? So, I know that I need to speak to the clients, maybe three 90 minute calls, right? And that just in order to do something. I also know that when it comes to building a model, I need like three times, you know, the amount of time I'm spending with clients.

So maybe I'm building my model in like sessions of three hours. I need maybe two sessions or three sessions or three hours, but then like you said, they usually come back and they want to change something. But yeah, I don't spend time talking to clients when I've already gotten the information. It takes me longer actually building the model that actually speaking with the clients.

Host: Paul Barnhurst

And that makes sense. So, it sounds like the process takes quite a bit of time early on with the client. Then it's really building a model and then there's some review with the client and making sure it works and it meets their needs. That makes sense. I think it's always a little bit of a balance to try to make sure you spend enough time with the client and you understand versus the model, and it sounds like you have a good process that seems to work for you.

Guest: Zainab Nwachuku

Well, yes, and then I'm not doing it alone. I have my husband, so sometimes I'm not even talking to clients. He's talking to clients and I'm doing the building.

Host: Paul Barnhurst

Sometimes you're getting the, you're translating what he tells you.

Guest: Zainab Nwachuku

Yes, exactly.

Host: Paul Barnhurst

Got it. Now that makes sense.

Next up here, we have, this is my favorite section of interviews, cause we have a list of, we call it rapid fire. And we have a list of questions. There's eight of them that we ask, about modeling. And so here's how it works. And I'll give, you an example, you don't need to give an answer yet. But if I was to ask you “a circular or no circular references” you have to pick one or the other. So you can't say “it depends” because on all of these, you could say it depends. You just get to give an answer, and then when we get done, after we've gone through all of them, you can pick one of the questions to elaborate on, to tell us why you picked the answer you did, and if you want to say, hey, here's why it depends, you get that opportunity.

So I'm going to go ahead and list each question and we'll just run through these and you can give me the answer.

So first one is, circular references or no circular references in models?

Guest: Zainab Nwachuku

No circular references.

Host: Paul Barnhurst

 Okay, no circular references.

VBA or no VBA?

Guest: Zainab Nwachuku

VBA.

Host: Paul Barnhurst

Horizontal or vertical model?

Guest: Zainab Nwachuku

Mostly vertical.

Host: Paul Barnhurst

Yeah, that's not uncommon. Excel Dynamic Arrays: should you use them or not? Yes or no?

Guest: Zainab Nwachuku

No.

Host: Paul Barnhurst

External workbook links. Yes or no?

Guest: Zainab Nwachuku

No

Host: Paul Barnhurst

That's pretty common. I almost like, I'm not sure why I asked that one, cause nobody has said yes yet.

Guest: Zainab Nwachuku

No, that's just way too stressful.

Host: Paul Barnhurst

Yeah. That's pretty much everybody's response. They kind of cringe like, no, no, never.

Guest: Zainab Nwachuku

No, no, no, no

Host: Paul Barnhurst

Named ranges versus no-name ranges in your model.

Guest: Zainab Nwachuku

No name.

Host: Paul Barnhurst

Following a formal standard, so like smart or fast, yes or no?

Guest: Zainab Nwachuku

 Yes.

Host: Paul Barnhurst

And then, and I'll caveat this question by saying, I realized there are more choices as everybody likes to point out. What is your favorite Lookup function? Do you like using VLOOKUP, INDEXMATCH, XLOOKUP, or CHOOSE?

Guest: Zainab Nwachuku

I like INDEXMATCH and I also like CHOOSE.

Host: Paul Barnhurst

Fair enough. INDEXMATCH is definitely a common one, a lot of people like. So you wanted to elaborate, so go ahead.

Guest: Zainab Nwachuku

Okay, so I said no name ranges, but I actually think that it's something I'd like to start putting into my model. Like, I like what, what the function does, but I haven't started to use it.

Host: Paul Barnhurst

Got it. So you haven't really used name ranges right now, so you'd say no, but it's something you're looking at using.

Guest: Zainab Nwachuku

Yes, yes, exactly.

Host: Paul Barnhurst

And any horror stories from using external workbook links? Cause you were pretty adamant on that one.

Guest: Zainab Nwachuku

Oh my God! Yes! So when I first started, I didn't know anything. I thought it was amazing that you could link two different workflows until you come in and then everything's all ref and you're trying to understand what's going on. I now have to go back, go to the other sheets, figure out what's going on there, then come back. Ah, this is not what I thought it was.

Host: Paul Barnhurst

I am totally laughing, because I can 100%  relate. I mean, I actually had one where I thought I had hard-coded, I copied something over from another file where I'd done a LOOKUP and I thought I'd hard-coded it all because I was done and it wasn't showing up and it turned out it was giving me ref errors because I hadn't hardcoded it. I was like, oh, why did I do that? You know, you're not supposed to have those.

Guest: Zainab Nwachuku

Yes, and then, it's complicated enough trying to figure out a ref error when all of your sheets are in the same workbook, and then now you want to go and check another workbook.

Hi. This is not what I thought it was.

Host: Paul Barnhurst: I am totally laughing because I can 100 percent relate. I mean, I actually had one where I thought I had hard coded, I copied something over from another file where I'd done a lookup and I thought I'd hard-coded it all because I was done and it wasn't showing up and it turned out it was giving me ref errors because I hadn't hard coded it.

Oh, why did I do that? You know, you're not supposed to have those.

Guest: Zainab Nwachuku Yes, and then it's complicated enough trying to figure out a ref error when all of your sheets are in the same workbook. And then now you want to go and check another workbook.

Host: Paul Barnhurst

Oh yeah, yeah, fortunately, this was a simple one where there was only one area it could be, so it was pretty, it was easy to fix, but oh yes, when you, if you have complex models and you start linking to a bunch of different worksheets or workbooks, ugh, just don't do it is the advice.

So we're coming up near the end of our time. I've really enjoyed our conversation. We have just a couple of questions left for you. First one is, maybe what's one thing you've learned over your career about financial modeling that you could share with our audience, you know, a piece of advice?

Guest: Zainab Nwachuku

Yeah. So, I've learned that financial modeling, it basically brings you clarity, right? It's something, it's a tool. It's just a tool, but then seeing all those numbers put together, it gives you insight. So it's not just for founder, it's not just for big, large, or huge projects. It could be something even, you know, as simple as putting together some template that you use to really calculate your prices. So I think that what financial modeling has helped me to view, to understand it's clarity.

Host: Paul Barnhurst

I really like that answer on clarity, and it made me think of one thing when you said driving insights. I heard somebody say that financial modeling is the number one decision-making tool in finance, and it's so true and that's, you know, that's what you're telling me, it gives you that clarity and helps you drive decisions. I had an interview, I was speaking with someone the other day and the way they put it is, really as a modeler, we're trying to ensure good projects get done, bad projects get rejected. And there's such a simple way to put it, I'd never quite heard it that way, and I just love that. I'm like, boils it down.

Guest: Zainab Nwachuku

Yes. Boils it down. And it's perfect. It's absolutely perfect.

Host: Paul Barnhurst

One last question for you. If our audience wants to learn more about you or get in touch with you, what is the best way to do that?

Guest: Zainab Nwachuku

I'm mostly on Instagram, you can always find me there, at The Intellectual Plug. That's my social media of choice. You can also find us on our website.

Host: Paul Barnhurst:

So Instagram, The Intellectual Plug is where you're typically at. Thank you so much for joining us today, Zainab. I really enjoyed our conversation and having you on the show and look forward to sharing this with our audience.

So thanks again for carving out some time.

Guest: Zainab Nwachuku

Thank you so much for having me. I loved our conversation.

Host: Paul Barnhurst

What a great episode we just had with Zanee Nwachuku. I really enjoyed chatting with her, and there's a couple things that stuck out to me. First was how she talked about terrible models, and she's like, I don't even want to call it a model because it was just spreadsheets everywhere. We'll call it projections.

And the second thing is how she mentioned, I've built my share of terrible models. Just reminds me it's a learning process we all have. And so I really think that's one takeaway is just think we all go through that, we all have to learn, we all make mistakes. And that kind of links back to our second story, where when we went through the rapid-fire questions, and I asked her, you know, linked workbooks, yes or no? And she's like, no, no, don't do it, and she tells the story about how when she first started modeling, she thought, oh, this is so cool, I can link workbooks, and so she went ahead and tried to link a bunch of workbooks and she ended up with the dreaded HASH ref error that we've probably all experienced, you know, and she talks about how she had to spend time trying to chase it down, what file was it in? What caused it? I think that's something we can all relate to. And then the final thing I really want to mention about her episode is just the passion she has. You can see how much she loves modeling and she loves her job, and those are the kind of guests we want to have. People who are passionate about modeling can bring great stories, can bring passion, and can help teach all of us so we can be better modelers.

So next, I thought it would just be fun to do two things here today. We're about, you know, six, seven episodes in here. We've done a handful of episodes, and so we've had enough rapid-fire questions being asked to start to see some patterns. So, I thought we'd go through and just see what we're seeing from our guests.

So first one, circular or no circular references. Clear trend, so far of all the episodes we've released, in this episode as well, the answer has been no across the board. We will have a yes coming, but in general, it's been no.

VBA has been very mixed. It's been about 50-50 on VBA, which doesn't surprise me, VBA is controversial. Some people say you should avoid VBA cause most people don’t understand it, others ay why not use it, it makes things easier, of course we should use it. So that one, you get a mix.

Very similar with vertical and horizontal. You know, vertical's winning, but you have a few that have said horizontal, there's not a clear trend. Same with Dynamic Arrays, you know, some are yes, some are no. And I think, again, that's not very surprising given how new Dynamic Arrays are. Over time, I think that will become more and more yes.

And then, following formal standards. Again, that one's a mix. Some people are yes, some people are no. You know, as Diarmuid Early said, my dirty little secret is I don't know any of them. So the key is following good principles. You don't necessarily have to be following a formal modeling standard is the takeaway I take from that.

You know, when it comes to named ranges, again, kind of split down the middle. I think four so far have said yes, three have said no, but in fairness, one of those who said no is just said, no, I'm not using them yet, but I'd like to use them someday. So it seems like on the whole we lean toward more yes, we should use named ranges, but definitely some different opinions.

And then the last one, LOOKUP function of choice. We give four options there. VLOOKUP, INDEXMATCH, XLOOKUP and CHOOSE. So the first thing we'll say is nobody has said VLOOKUP, which I think what it shows is you advance past VLOOKUP, you realize INDEXMATCH, XLOOKUP, CHOOSE, other LOOKUP functions have benefits and can do what VLOOKUP is doing.

Not that some people won't use VLOOKUP, but as a general rule. And so the number one has been XLOOKUP. Three people have said XLOOKUP, two really prefer INDEXMATCH. One mentioned choose, and then one went in a totally different direction. That was Heidi. She had the INTERPOLATE LOOKUP, which we shared a little bit about in the show notes on that.

So I thought it'd be a little fun to just kind of recap what we're seeing from people. What this really tells me as you go through these questions, when it comes to modeling, there are only a few areas where there's really a clear, hey, don't do this.

And circular references is an area where if you really don't understand them and you're not really, really careful, just don't use them. As a general rule, look for other ways to do it. The other one is, you know, workbook links. As a general rule, just avoid them. Don't do it.

Outside of that, there's a lot of different opinions. And in the future, we're also going to start asking guests, will Excel over it die? I’d be curious to see what they say there. And will AI eventually build the models for us? We've started to ask some and you'll see those in future episodes.

Next, I just thought it'd be fun to share a couple of resources, and those will also go in the show notes, of great LinkedIn follows, if you want to improve your modeling skills, you know.

First, I would love for all of you to follow Financial Modeler’s Corner, you can find that on LinkedIn there. And that's our show page, we release stuff about the podcast and summaries of guests, videos, and those types of things. But there are some others that have much bigger followings and release great content regularly. A couple of these are company pages and some of these are individuals. So I'm just going to list a few.

Financial Modeling World Cup is one, which we'll talk more about in the future. We'll have some great guests from that. So, go ahead and follow them, they put out a lot of really good content about Excel, about modeling, about forecasting, and they're a great follow, they're worth your time. Even if you never plan on competing in a competition, they just provide great resource material.

Financial Modeling Institute provides a lot of great stuff on LinkedIn. You can also obviously follow their webpage.

Chris Reilly is a great one to follow. He shares videos, documents, posts on a daily basis on LinkedIn.

Another great one, Danielle Stein Fairhurst. She has a lot of great content. I really recommend her.

Hedieh, which was, you know, episode six that we had on, Hedieh Kianyfard. She has some great material as well.

And then a couple others I'll just mention. Lance Rubin, it'll be a future guest on the show. He has put together a series of articles they did, nearly 50 articles, has a lot of great content. He puts that on LinkedIn. So he's a good one to follow as does Giles Mel who runs Full Stack Modeller. So, those are just a few people, there are many more, and I'd love for you to share in the comments, other people, you know of, and, you know, feel free to DM me or email me with those and I can add them to a future episode.

So those are just a few of the different people out there that I recommend you follow. Just in closing here, again, I want to thank you guys so much for following and listening to the show, for telling others about it, for leaving comments and reviews.

So as a reminder, you can earn CPE credit for this podcast. All you need to do is go to earmarkcpe.com, download the app, and answer a few questions after listening to the episode. So, I hope you take advantage of that if you need CPE credit, and again, thank you for listening to Financial Modeler’s Corner. Without you, the listener, this wouldn't be possible.

Thank you.

Financial Modeler's Corner was brought to you by Financial Modeling Institute. Visit FMI at www.fminstitute.com/podcast and use code PODCAST to save 15% when you enroll in one of their accreditations today.

Paul Barnhurst
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