30
JAN
2013

The Death of Excel

Brett Suchor, President

Yep, I said it – after 20+ years of building Excel models for valuations, raising capital, sales metrics, tracking my mortgage…you name it, Excel is dying and its dying quickly. Why? Well, quite simply there has been an unbelievable explosion in web-applications that generate better results.

Let me clarify a bit. Excel’s calculation engines are amazing; their flexibility seems to be virtually unlimited, IF data is fairly static. However, data is becoming more and more DYNAMIC, moving so fast today that the inputs we rely upon are constantly updated. This dangerous combination, of 1) static models and 2) hyper-dynamic data creates infinite opportunities for potentially gut-wrenching mistakes.

That’s it…time to turn in my user license.

So let’s talk about data. Seems simple enough – copy and paste the data into Excel and then point the formula its way. Today keeping up with changing source data and confirming which document that data originated from is increasingly important. Putting data into a spreadsheet and trying to remember where I got it, just doesn’t cut it anymore. Just consider these updates:

  • Revised financials,
  • Restated projections,
  • New option issuances on your cap table,
  • Terms from a new round of funding, and
  • The list goes on.

 

The changes are unending. Anytime I type or copy a number into Excel I lose the source and as we all know source data is coming at us in all forms:

  • Other Excel models,
  • PowerPoint presentations,
  • PDF documents,
  • Audited statements,
  • Word files,
  • JPGs, and
  • Social Media.

 

We are in constant data overload as our ability to generate and share information is at an all-time high. Double, triple checking that I am using the right sales number or employee headcount…its ridiculous…yet required if we want our Excel models to be right.

So let’s assume the data is right…now ask yourself what percentage of the formulas you rely upon in that newly created Excel model are correct. Pointing to the wrong cell, summing the wrong array of numbers, a backward if/then command, less than versus greater than, or in some cases the definition of the Excel model is not as it appears. These all happen more frequently than we like to admit. Assume that your model is perfect. Well almost meaning that 99 out of every 100 Excel formulas you build are correct…hmm. Which one is wrong and how is that impacting your decision? Ask yourself how many times you opened an existing spreadsheet to add new data and rechecked all the formulas…or did you?

So where is this all headed? We are headed to rapid source validation and web-applications that institutionalize even the simplest formulas that we all have traditionally built in Excel (yet the more complex is where the benefit really lies). Think about it…having a direct link to the source document allows for seamless validation of the data you are analyzing and eliminating the flexibility of Excel formulas ensures that your calculations are correct. While our platform solves this for capital raises, term sheets, and cap tables, its now becoming increasingly rampant in everything we do. From downloading your bank statement directly into Quicken to viewing your spending habits on Mint to tracking your sleep cycles with FitBit to simply counting your “friends” on Facebook, data is being linked directly to the source and the calculations are being done for us.

The death of Excel is a similar phenomenon of robotics eliminating jobs in manufacturing plants. Web-applications simply do the job better, are easier to collaborate on, much easier to share, and once built don’t make mistakes.

That’s why I am saying bye, bye to Excel and looking for a fleet of Rosey the Robot Maids (aka the Maid on the Jetsons) to help me process data both in the office and at home.