Founder Puzzles. Financial modeling for founders and startups

14 mins read time

Founder Puzzles, building better businesses by building better financial models for startups has a release date. The digital edition of the book is scheduled for release on 24-Jul-2020.

The book is now live in store. Founder Puzzles, pick up your copies now. 

Founder Puzzles, the book.

Why should anyone read this book?

Because as founders we often get financial modeling wrong for startups. Most often when we think we have it sorted, we build the wrong models, we ask the wrong questions.

At its heart Founder Puzzles is not a book about building better excel models for businesses. It is a book about building better businesses, right from the start.

Much cheaper to do it in Excel than with blood, sweat, tears and capital. Founder Puzzles shows you how to do all this faster as a founder. How to use simple frameworks in Excel to identify winning choices by asking the right questions.

Live cases walk through modelling revenues, unit economics, sizing markets, investor mindset, valuation land mines and founder risks.

Four years in the making the book summarizes twenty years of experience as a serial founder and as a mentor to startup teams in the region. Twenty years of committing or witnessing every single mistake in the book.

Official release date for the digital edition. 24th July 2020.

Founder Puzzles focuses on answering common financial modeling questions founders face as part of building their businesses. 

Founder Puzzles - Build better businesses
Founder Puzzles – Build better businesses right from the start.

Post launch Price – USD 34.99. Current special US$ 29.99

Payment Options. Online payments through credit or debit cards. Bank IBFT available for local customers. 

On the zen of building financial models for founders and startups. Focus on the questions, not answers. Complex is easy, simpler is harder. 

As a founder I often think about questions that I need to answer for my business. Stuff that often requires me to sit down and build a model in Excel.

  • Who do I build that model for? For myself as a founder or for my investors?
  • How complex should it be? How much time should I spend on building it?
  • What is the one thing I need to get right?
  • What is the question I am trying to answer? How will this model help me do a better job?
  • Where do I start? What do I assume? Who do I ask?

Real world questions. Real world models. Real world answers.

The 14 chapters from the book include:

  1. 7 lessons from finance for founders
  2. Modeling revenues
  3. Unit Economics for startups
  4. Pricing Fundamentals
  5. Value based Pricing
  6. Market Sizing
  7. Understanding Investor Mindset
  8. Revenue Models for content plays
  9. Disney Marvel Case study
  10. Products vs Services
  11. An introduction to valuations
  12. Real world Models. Bringing it all together.
  13. GEMS Education. A private equity case study
  14. Kelly criterion. Founders, Risk and bet size

What are people saying about the book

Founder Puzzles Book review
Founder Puzzles. Financial modeling for founders and startups
Founder Puzzles book reviews
Founder Puzzles book reviews

Who is Jawwad Farid? 

Jawwad Farid is a serial founder who over the last twenty years has run technology businesses working with customers in New York, London, Los Angeles, Dubai, Nairobi, Karachi, Singapore and Bangkok.

Founder Puzzles is his 5th book. Early efforts include two with Palgrave Macmillan on Enterprise Risk and Option Greeks, one on founder failures titled Reboot and one on Portfolio Optimization Models.

He is a Fellow Society of Actuaries, a MBA from Columbia Business School and has an undergraduate degree in computer science from FAST NUCES, Karachi.

Learn more about, Jawwad Farid the author at:

Founder Puzzles FAQ

What is this book about?

A common challenge that founder face is figuring out their business model. While there are a number of great tools available for figuring out visual modeling, when it comes to building a business a deeper dive is required.

Solving a problem is different from building a business. Building a business has many moving parts, each moving part comes with a set of assumptions that need to be tested and validated. Steve Blank describes a startup as an organization in search of a solution to a problem. Steve and many others say got out in the real world and validate these assumptions. But once you have validated the assumptions then what. How do you put them together, how do you mix them, how do you craft a recipe that works, how do you figure out the infinite variations and choices between the moving parts?

Enter Excel and Financial Modeling.  The book is about financial modeling for founders.

Do we need another book on financial modeling?

When it comes to financial modeling there is a great deal of literature out there that shows us how to build financial models, detailed financial models, models that could win the noble prize in complexity

Most literature focuses on learning how to use the tools of financial modeling. It’s tough subject and that time is justified. But we don’t spend enough time learning how to apply that tool for your needs as a founder.

It’s like teaching us how to run but not giving us a sense of direction or telling us how to use running to get from point a to point b.

That is the gap that exists. That is the gap the book tries to fill.

Thesis behind the book

The core thesis of the book is that:

  1. As founders rather than building better more complex excel models, we need to focus on building better businesses using simpler excel model.
  2. We need to build models for founders, not investors
  3. It is easier to test things out in Excel, than in the real world with scarce capital.
  4. Different location pins. Same challenges. Similar solutions.

These are simple statement but one that requires a mind shift. The objective is not to spend days building a model. The objective is to have specific questions and to build models to answer those questions.

Do the math but keep it simple, relevant, realistic and to the point.

Frameworks from the book

Evaluate ideas using well-established frameworks in Excel.

Such as unit economics. Can we apply unit economics as a filter to select between three ideas we are working on? Which one of them is a better business? Is there a simple equation or a test that we can use as that filter? The book walks through a couple of examples of how that works.

Pricing a product or a service? What are the three or four pricing models that are available? Which one is more suitable to your needs and requirements? Valuation models? What do investors look for an investor proposal? What are they thinking when they put together a term sheet for you?

Modeling revenues, estimating market sizes, choosing between monthly or annual projections. What are some of the rules that you should remember? What are some of the common mistakes we all make?

Why is it such a bad idea to quote a number form an industry report suggesting that market size is a few billion dollars? We are not saying we get x percent of that billion dollars. We are smarter than that, but just by using the figure from the report we have shot ourselves in the foot. Why?

These are all common challenges that we face as a founder. But a book focused on financial modeling in Excel is more concerned with the teaching us how to build models in Excel that answer questions we face while tweaking our businesses for product market fit. Answers that help us pick between strategies and choices.

The objective is not to build a financial model that you can present to an investor.

The objective is to help you build a model that you can use to build a better business. A model that allows you to build a deeper understanding of the business you are building. One that helps you answer everyday questions you face as a founder with the investment of a few minutes. One that helps you make you take decisions and choices that will have a significant impact on profitability

Modeling revenues

A simple example may help understand the point.

One of the first cases founder puzzles looks at is that of a business that sells a product online. Their core revenue driver is traffic. They are evaluating choices to generate more traffic and grow. They have four options. Invest in faster servers. Invest in better long form content. Invest in SEO. Improve conversion rates on their landing pages. Four simple choices. Four simple models. If they have the money to spend, they should do all four. But it they don’t and can only afford to do one, which one should it be?

How do you go about answering that question? Now this a question that does not require you to get an MBA or a PhD in Finance. It just requires you to answer a simple question. What are the primary drivers of my revenue and how do the four strategies impact them?

You could build a simple model in ten minutes and answer it. But before you build the model you must understand the core drivers for your business. You must have that data? Where does that data comes from? What do those drivers look like?

The origins of Founder Puzzles

Founders Puzzle is a book that came out of 5 years of running the financial modeling boot camp for Founders at the Nest I/O technology incubator in Karachi. 200 teams across 11 cohorts from 2015 to the summer of 2020.

During the boot camp we struggled not with theoretical frameworks but actual challenges at work that founders at the boot camp faced. Several chapters and live cases in the book are inspired by these conversations. Real world problems shared by real world founders solved by real world models.

Who should read this book?

Founders obviously. It was written by a founder for other founders.

Founders in the making or founders on the side who have had an idea on slow burn for a while and need to decide if the time is right to take the leap. Before you commit capital, run a few variations in Excel to see if your idea is worthy?

Founders in the real world struggling with profitability and scalability challenges. If you are wondering why things are not working out, try out some of the suggestions and frameworks applicable to your world. Perhaps you are making the same mistakes we made.

It is cheaper to model things out in Excel than burn capital in the real world.

If you start out by saying that you are you going to feed yourself by selling advertising on a site dedicated to growing lemons in your home garden, perhaps it would be useful to model traffic trends in excel before building the site or investing in a home gardening lemon growing kit.

Do the math. Sometime the math is in alignment with your expectations. Sometimes it isn’t. But it is cheaper and faster. It will also good for your sanity if you do this math before taking a leap of faith into a business that has no hopes of making things work. Before you blow a few years of your life and all your savings on a model that has no hopes of working.

Founders in the process of raising a round. Spend some time understanding investor mindset and valuation landmines. Not cap tables and pre and post money terminology. Rather what is driving the discussions behind the terms.

How big is the book?

There are fourteen chapters in the first edition. There will be more in the 2nd edition planned for next year. Most of the chapters either have a short case study in them or are based entirely on a case study. Three chapters provide context and commentary.

Founder Puzzles. Buy Now

Who are you?

I have been a serial founder for twenty years. Before the twenty spent eight years with technology consulting in product development, technology outsourcing and enterprise consulting roles.

Five ventures under the belt, went to market to raise funding seven times. Made it work 5 out of the seven times. Raised 2.8 million dollars in total across thirty years. Doesn’t sound like a lot in valley terms but respectable when we consider that 4 out of the 5 rounds were raised in Karachi and the last one was raised in 2015.

But I am also a teacher I have taught Entrepreneurship as a Professor of practice and a practitioner for 17 years.

Founders Puzzles is my 5th book. I have written and published four before this one.

  1. Two on Enterprise Risk and Options Greeks with Macmillan.
  2. One on failing and rebooting again as a founder – the source of inspiration for my twitter handle.
  3. The last one on portfolio optimization models in Excel.

Here is the original preface for the book written in 2016 when it was originally commissioned.  It speaks  about the inspiration for the book and the series of events that lead to it. 


My name is Jawwad Ahmed Farid and I am the founder of

I have been building spreadsheet models since I was 14 years old. I was one of the few teenagers on this side of the planet who were fluent with macro programming in Lotus 123 in 1989; who could dance along with Symphony (the first “office” package, not the sound track) and who hated Excel to the core when Lotus lost out in the spreadsheet wars.  Thirty two years later I still use Lotus shortcut keys (my secret super power) and it has the desired reactions in class rooms across the world – “WTF, How the hell did you do that?”

While spreadsheets may have been my first love professionally, startups come a close second. I have done nothing but build or contribute to building new technology focused businesses for the last eighteen years.

The first one got shut down in the fall of 1998 after an eventful six months. The second business lasted a while and gave me a chance to put those modeling skills to work again. It helped that I was also a full time student at Columbia Business School while working as a full time founder on the side. As things got serious for venture number two (named Avicena) I began work on building a detailed financial model. The objective was to answer investor questions and supplement the business plan for the idea. By the time we were done two years later we had pushed 58 editions of the financial model out to the world.

I had never worked as a founder for a startup before. Raised in a financially conservative family we were always encouraged to plan things out. This conservative streak was exaggerated by the years I worked as a consultant. By the time I got to Columbia and started work on idea number two, I had bought into the concept of planning this one thing to death. I understood that this was the riskiest thing someone had done in my family across three generations by choice. My approach to manage that risk was to plan it out.

With that spirit I took four courses on financial planning and modeling as part of the MBA program. Managerial accounting, Valuation and Financial Statements, Entrepreneurial Finance and Tax factors. All four were taught by world class faculty who rocked both inside and outside the classrooms. All four played a part in ensuring that I understood what I was doing.

Managerial accounting introduced us to activity based costing, product cost allocation and profitability. Valuation and financial statement covered financial projections and the ability to correctly drive enterprise value using a number of methods. Entrepreneurial Finance, the course taught by Glenn Hubbard, the current dean of the business school, walked through one entrepreneurial case a week.  We blazed through themes of raising funding, the mechanics of convertible debt, investor term sheets, product finance, financial projections and decision making under uncertainty. Tax factors the most practical and applicable course of the lot and the one that actually saved me quite a lot of money in the end walked us through the US tax code as business owners, managers and founders.

Given the fact that we hadn’t written a single line of code, didn’t have a product, weren’t sure if we would be able to raise funding, hadn’t hired any employees, or locked in clients, customers, suppliers or vendors, our financial model was in pretty good shape. With ten odd tabs and a few thousand interlinked cells it was equivalent to the Spanish armada on steroids out to hunt an errant fisherman in his flimsy wooden leaking single oar boat.

Founder Puzzles. Financial modeling for founders and startups

Despite the sophistication of the model and the amount of effort we had put into it over the year, when a customer first asked me about how much our product would cost his company on a monthly basis, I didn’t have an answer.  This was a question my multi-tab, ultra-sophisticated model with a full decade worth of projected financials was not designed to answer. It could tell me projected revenues for next month, the average price per ticket per customer per year but it didn’t tell me what to say to Steve who was waiting on the line for me to answer that question.

We also had detailed projected statement of cash flows breaking down our cash needs on a month on month basis for the next 5 years.  Yet as we ran out of cash a few months later in May, I wondered what good did that section of the model actually do?

I am being too harsh. There was one thing the model did exceedingly well. It was designed from the ground up to answer the valuation question and that is a question it answered very well. Too well in fact. A few months after we started, armed with nothing but a basic prototype, a business plan and our financial model, an angel investor offered us a term sheet in May 2000 that put in US$ 2.5 million for 30% equity. Fresh off the boat with me still on an OPT visa we were worth between USD 7 – 9 million depending on how you sliced the equity. We turned the angel investor down politely because accordingly to our model that valuation was too low.

I hope you can see the irony and humor in this. I couldn’t.

Founder Puzzles. Financial modeling for founders and startups

My major at Columbia was finance. I divided my time equally between building the product, finishing my course work, completing the business plan, reaching out to customers, tweaking the financial model, talking to investors and building a team. I was a reasonably well grounded, clued in, experienced consultant turned founder working twenty hours a day in the relatively hot e-learning space. Two years later when we finally failed I was so traumatized by the experience that I had to write a 284 page book to get it all out of my system.

There were many reason for our failure. We got a lot of things wrong. But the one thing we didn’t expect to get wrong was our model. It was the one thing we had always been sure about. Unfortunately while our model was technically right and academically sound (collective scores of two B+ and two A across the courses it grew out of), it was hopelessly out of sync with the real world. The model wasn’t at fault. Nor were the professors. I was. The model only answered the questions I had trained it to answer.  If the model was off it was only because I had been asking the wrong questions.

Avicena, venture number two was followed by AnnuityNet (Order entry platform selling tax advantaged savings vehicles), Alchemy associates (training and actuarial services for financial industry), Alchemy technologies (Enterprise risk and treasury software for banking customers), (the site you are on right now) and Sunoida Insights (Enterprise risk for Africa). Much as I hated building valuation and operational models, I built them for all five ventures.

Side by side with working as a founder I also taught entrepreneurship as an adjunct. I tried to ensure that my students didn’t make the same mistakes I did.  Then the technology industry association (PASHA) came along and I taught the same concepts first to members of the PASHA delegation competing at the Asia Pacific ICT Awards and then to startup teams incubated at the technology incubator in Karachi.

But like me, many of the teams I worked with also failed. Despite their intellect, their experience, their work ethic and their promising markets they ran into trouble. I am not talking about the also rans, the ones that didn’t stand a chance. I am talking about the leader board, the ones we were sure would reach escape velocity and transform themselves into role models and getaway stories.

For the longest time I felt that if we got the product market customer fit right, if we could sell and collect revenues, if we could pick the right market and price it right, everything else would work out. After all these were the most difficult dimensions of building and running a startup. If you could get these out of the way the hard part was behind you. I was wrong.

You could get all of that right but if your model kept on asking the wrong questions you could easily run into trouble.


To a large extent this book is focused on asking the right questions. Or asking questions that are too mundane and boring to ask. If the real meat in your business is building cool technology why should anyone care what a customer support call costs. Even if you did we are more interested in getting right down to the valuation question rather than thinking through all the drivers that trade valuation off for things that really matter.

Every few months a team I am mentoring comes along and says we are not sure how to do this, can you help? This book is a collection of those, yes I can help question and answer sessions.  And getting approximately right, fast crude answers as quickly as possible.  So the next time a customer like Steve asks you how much the product is going to cost, you can give him a rough ball park figure that is not going to sink your ship.

But before we do that lets take a step back. I would like to get something off my chest.

“Multi tab, super complex financial models are over rated. We spend too much time building and tweaking them – time that could be better utilized elsewhere – reaching out to customers, fixing operations, prioritizing product features or going out shaking hands and closing deals.”

There we are done. I said it.  I am not going to teach how to build complex financial models. This is not what this book is about. There are some really good ones out there if you fancy an orchestra of a million cells and I would be happy to point you to them.

I would just like to focus on using modeling to answer the collection of small problems we face as founders that merge to form our businesses.  So questions and answers. Find the one that is pestering you right now and jump right on to it.

Start with correctly pricing an actual resource. Could be a member of your development team or a rider you have sourced to make deliveries. Roll that up into logistics. Add margins for profitability, cycles, downtime, overruns and supervision. Map that to a transaction. Link that to a customer. Plug that into your model. The final model is still not going to be related to T-Rex but at least it would be built up on real data and real assumptions.  Once you have it up and running, calibrate it against actual numbers, performance and figures. Double check and see if you really are clocking in that 30% margin you have been so proud of. That in essence is the book.

If that sounds right sign up for the mailing list here. We will drop you a note when the book is ready for release.

Founder Puzzles. Financial modeling for founders and startups

Founder Puzzles. Buy Now

Can’t wait to get your hands on the materials – take a look at the following posts – the original writing prompts for many of the chapters in the book to get your models flowing.

  1. Where do valuation multiples come from – MSFT-LNKD transaction
  2. Balls or barrels – The zen of building risk models.
  3. Unit Economics for Founders
  4. Estimating Market Size
  5. Modeling revenues
  6. Products versus Services
  7. Disney Marvel Case Study
  8. Revenue Models for content plays
  9. Jeff Bezos and Washington Post
  10. Excel Data Analysis
  11. Better Excel charts
  12. Pricing Models for startups