You know that you need to get advisors to fill the gaps and you have a vague idea that the more prestigious the names you have, then the more impressed your funding partners will be.  Two things to get straight here:

1) Sophisticated investors know that entrepreneurs have started collecting ‘advisors’ like baseball cards in an attempt to get credibility from having the highest value assortment.  They are also not stupid – Listing someone as an advisor because they agreed to take a call from you occasionally does not provide value in either social proof or contribution.

2) If you want to get some validation from the social proof of a valuable advisor, then you must demonstrate their engagement and how they are helping you chart your course.

3) You actually DO need real advisors, so engage  them and  take their counsel in a structured fashion.

If you are happy with the above assertions, then read on and I will tell you how.

Advisory Boards with a capital ‘B’

You should form and operate an advisory board with a discipline and process of a normal board of directors.  This means that as CEO you play the role of company secretary and schedule monthly board meetings and distribute a formal agenda in advance (at least 2 days).  There has been enough written on the topic of board agendas so you can google them, but it is worth repeating the role of the board.

Job #1 of a normal board is to hire and fire the CEO… The good news for you is that this doesn’t apply for advisory boards

Job#2 is to challenge, improve and approve strategy.  You should look for advisors that deeply understand your business model and market and most certainly your stage of company (in particualr for first time entrepreneurs).

The informal role of the board includes CEO counseling, introductions (biz dev, funding, key hires).  All of which you should look for in an advisory board also.

One big departure from the standard board is that you should have a constant stream of feedback from your advisors in between meetings.  The best way I have found to achieve this is to use a tool like www.leanlaunchlab.com othat allows you to track your customer development process and to provide advisors with operational metrics in real-time.  This encourages adhoc feedback and advice every week.

Getting them engaged

If you are thinking that I expect a lot from my advisors, then you are correct.  The reason I receive it is because all my advisors have equity in the business through direct investment or vested grants.  The mistake I see made often is that people either don’t give meaningful slices of equity, or they dole it out haphazardly and don’t get the value back.

My firm opinion is that if someone is going to be a committed advisor, then they must believe in your vision and therefore should be prepared to invest (even a token amount) to be a part of the team.

The characteristics of a good advisory team

You know that you have got it right when the following is true:

• You can get the advice you need from you board (directly or through an introduction)
• Advisors risk their social capital by providing introductions to high value connections
• Your advisors proactively suggest introductions due to gaps they see you have’
• Your advisors are asking informed questions because they are staying across your business

A final note – Remember that this is a two way street.  You should seek to help your advisors with their personal and professional objectives at every turn.  These are key relationships and deserve nourishment.

I wish you luck in finding your consigliere’s – I feel very fortunate to be working with mine.

Ideation – a term that had a few Australians scratching their heads at this week’s Founder Institute workshop in Sydney. In typical Australian no-frills style, Benjamin Ranck and Ben Chong of the Sydney Founder Institute (F.I.) chapter broke down the process of idea generation for an eager crowd of aspiring entreprenuers. As the precursor to an inaugural F.I. Sydney intake in March, this event was undoubtedly a spark that will ignite many entreprenuerial fires.

I had the privilege of sharing my journey since completing a fantastic 5 year ride with Salesforce.com to return to my passion of building businesses – For the first time in the software space. Rather than talking about all the things my co-founder and I did right, I took the time to explain that it took two pivots for us to accumulate enough learning to arrive at the promising results WhoTo.com is now delivering.

The key points I shared publicly or in side conversations were:
1) If you are in a corporate role you are most likely terrified of making mistakes. With start-ups you know with certainty that mistakes must happen to afford you
the learning you need to ultimately be successful. The key is to learn and adjust quickly enough that you don’t hit the end of your runway.

2) The angst of not building a successful business and having to return to a normal day job will last a matter of months – The angst of not having attempted anything and wondering, “What if?” will last a lifetime.

3) If you think about your start-up as an experiment to test an hypothesis, then you will have the right mindset – A disproven hypothesis is not a failure… You successfully learned something.

One of the most valuable moments of the evening for me was a question I was asked at the end of my talk. I was very candid during the discussion and subsequently was asked how I coped with the fact that I had previously spent the vast majority of my personal assets on a disproven hypothesis – IE A business model that didn’t prove to be viable. I responded by saying that it didn’t bother me in the slightest… and I meant it.  Money to an entrepreneur is merely fuel in the car – The more you have, the further you can go and the more interesting things you can do. The point is that most successful entrepreneurs get very little happiness from having a large tank of fuel – It is more important that they are driving the car.

This is the reason that entrepreneurs cannot stay working for large organisations – The money flows in (plenty of fuel), but they are merely passengers in someone else’s vehicle.  So, if you are ready to start driving the bus (A nod to Elias Bizannes), then I commend the Founder Institute to you as a way of ensuring that you learn fast and can execute using the best practices of the tech titans in Silican Valley.