The 1-in-60 Rule for startups |Startup | Sarthak Ahuja

The 1-in-60 Rule for Financial Models and MIS

👉🏼 The Rule has been adopted from the world of aviation, and it states that a 1 degree error in direction will cause an airplane to miss its target by 1 mile for every 60 miles flown.

👉🏼 This framework instills the importance of real-time course corrections as you pursue growth and progress toward your goals. Here's how it applies in business, esp. startups.

👉🏼 Most Financial MIS in business are created on a monthly basis. As they say it in Hindi, "tab tak toh haathi nikal jaata hai". MIS reviews are necessary on a weekly basis, esp for startups to evaluate metrics like weekly ROAS, CAC, Revenues, DAUs, etc.

👉🏼 Your three year financial model for investors is going to be junk, and they know it, which is why, focus on building a financial planning spreadsheet in which you can change inputs each week/month to see what kind of outputs in metrics you'll get if you keep progressing that way - it helps think through revised targets, have real time assessment of variance, and a realistic idea of current burn rates and runway.

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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.

Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.