Improving on Instinct

Why Startups Need Fractional FP&A: A Lesson from Daniel Kahneman

I was recently having coffee with the former COO of a publicly traded company. During a period of rapid growth, she explained, everything moved so quickly that most decisions had to be made on intuition. There was no time to prepare analysis—and often, no data. It reminded me of life at many startups.

On the way home, I happened to catch an interview with Daniel Kahneman (Nobel Prize-winning economist). He was discussing the concept of System 1 and System 2 thinking from Thinking, Fast and Slow.

System 1 is fast, automatic, and intuitive—the kind of thinking we rely on when we're moving at speed. System 2 is more deliberate and analytical—and often underutilized when urgency dominates.

I love this framing because fractional FP&A is System 2 thinking for fast-moving companies.

Early-stage and scaling companies are often swimming in uncertainty. But while intuition (System 1) is essential for agility, relying on it alone can introduce blind spots: overconfidence, pattern-matching, and decision fatigue.

A fractional FP&A partner doesn’t slow the company down—they counterbalance System 1 by injecting structured thinking, fresh data perspectives, and analytical clarity when it’s needed most.

Just a few hours a week of targeted analysis—performance trends, scenario modeling, budget calibration—can challenge faulty assumptions, reveal unseen risks, and support better decisions.

Kahneman warned that System 2 often takes a back seat because it’s effortful. But what if, instead of burdening internal teams, startups could borrow that cognitive capacity?

That’s what fractional FP&A offers: System 2, on demand.

If you are interested in exploring what Fractional FP&A Consulting can do to support your systems thinking, feel free to schedule a free discovery call here.

Published: July 20, 2025