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 http://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.
Analytics – We love ’em. Dashboards with drill-down charts and dynamic filters. Whether you are analyzing site traffic with Google analytics, Kissmetrics etc or looking at your sales pipeline in your CRM, top of mind should be, “Why is it so, and do I care?”.
Remembering that metrics are primarily used for guiding our decisions (albeit sometimes we use them for PR etc), be careful not to fall into the trap of measuring things you can’t impact.
Questions to ask when presented with data/charts:
1) Why does this matter right now?
2) What does it mean?
3) What are we going to do differently as a result?
Questions to ask when building reports/analytics:
1) What are the key goals for this period?
2) What are the measurable steps to achieving those goals when broken down as predictive indicators?
If you ask these questions, then when an advisor asks you, “So what?” you can respond with the specific actions you will take as a result of the insight.
Secondly, if your numbers are going in the wrong direction, you will be able to explain exactly why and what you can do to rectify it.
Of course, the best analytics are ones that wave a flag when you need to take action, rather than require you to trawl through data. Over at http://www.whoto.com we have built a sales intelligence tool for busy B2B salespeople that does just that. We have robots that tell sales people about competitive relationship threats and why they should care… Even more to come in the weeks ahead.
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.
Having worked for several very large organisations and been a founder of 3 start-ups, I have found a universal element crucial for success – A means for ensuring that you are executing the strategy that has been laid out. Whether you are running a lean startup or an annual strategic planning process, a shared necessity is a set of practices and underpinning tools for ensuring that the documented strategy is actually executed.
If you are running a business you need to have systems in place to ensure you are executing on the agreed strategy and that you can manage the business to the plan. As part of my due diligence I always ask to specifically see the the systems that are in place to execute on the well constructed plan – Wharton highlighted the importance of this discipline in the well articulated paper, “Three Reasons Why Good Strategies Fail: Execution, Execution…”
My focus is innovation within corporates and startups, so with that in mind I thought to share with you the tools I currently find most useful in executing on a strategy.
I use the following hierarchy of planning today:
The tools I can commend to you are listed below:
I have been a sponge for the latest Customer Development practices and related problem/solution testing for application development. However, today I feel that I have had an epiphany with respect to its universal applicability – The ability to apply the lean start-up experimentation approach to a real world problem.
How do I get people to use a spoon to take the free jelly beans on my desk, rather than their hands?
Problem: People will use their hands to take jelly beans, which spreads germs.
Solution hypothesis: An obvious sign placed in front of the jelly beans will ensure that people use the spoon.
Experiment #1 Sign says:
PLEASE TAKE SOME JELLY BEANS
Use the spoon!
Those caught using hands will incur Sharia law penalty for theft 🙂
Results: 80% of people used their hands… They ignored the spoon and didn’t read all the text.
So I iterated:
Experiment #2 Sign says:
Please take some jelly beans
USE THE SPOON!
Those caught using hands will incur Sharia law penalty for theft 🙂
Results: 100% of people used the spoon.
Thank you Eric Ries and Steve Blank Ash Maurya of http://www.runningleanhq.com.
Anyone want a jelly bean?
Today I want to share a tool with you that is used by professional athletes and high performing individuals from all walks of life – A tip that will make sure you can have a great day every day and be a magnet to people around you.
Think back to a moment when you had just accomplished something awesome – Something that swelled your chest and put a big cheshire grin on your chops for the whole day. There are plenty of situations like this – You completed your first marathon, graduated from University, won an award, won a competition, secured that killer job that you thought was a stretch….
Now, imagine you were back there right now – Remember how good you felt? The looks of admiration and congratulations from your friends and family? Feels good right?
So now it is time to switch it up. You are on to bigger and better things… So, looking forward and upwards, what it the big hairy audacious goal that you have set for yourself? Is it something material like buying a house by the beach? Is it being the founder of a wildly successful start-up? Perhaps being the country manager for your employer…
What would that feel like? Take a deep breath and imagine that you have already achieved that … How would people interact with you? What would your day be like? How would you feel about yourself?
When an athlete doesn’t want to get out of bed at 5am for morning training this simple technique is what drives them to leap up and dive into it. Be the champion now! The amazing thing is that we can trick our minds such that our entire demeanour and feeling of well-being changes.
So if you catch yourself having a day of low motivation or you are in a funk, stop and imagine you have achieved your biggest goal and stick with that thought for as long as you can – For me, it changes my whole day.
This weekend I was witness to something very sad – A young entrepreneur, Michael Dunsworth, had his big opportunity to promote his business on an Australian national breakfast TV program and instead of being able to promote his website he spent the 5 minutes defending an indefensible new service that was being offered (Outsourcing your homework/assignments). As much as this may have appealed to my inner 18yr old, time poor student self from 20 years ago, watching this chap squirm around and use inane arguments to defend the practice really made me nauseous.
The harm this is doing to students and future employers is obvious, but the point I feel compelled to make today is that what this fellow did was to reset the public perception of entrepreneurship in Australia in a way that harks back to the 80’s – The idea that it is all about a quick buck at any expense. This young guy started with a good solid idea – Create an online matching service between students and tutors… Great idea. He then lost his way and decided to chase a fast and very corrupt dollar by allowing students to cheat with the outsourcing service.
Had he a decent mentor, young Michael may have been advised that this course of action has the following consequences:
1) Displaying a lack of a moral compass will ensure that professional investors won’t come anywhere near you (Now or in the future).
2) Potential business partners will not engage for fear of negative publicity relating to unethical practices.
3) The only people that will work with you are condoning unethical practices. Accepting unethical business practices displays a character of flexible morals… Would you want those people for employees?
4) If you ever need to seek employment in the future, these practices will come back to haunt you. No-one will ask you to be the steward of their resources when it is known that you will do whatever is best for you, regardless of the harm you may be causing others.
So, a plea to all entrepreneurs – Let’s agree that although our grandfathers may not understand exactly what it is we are doing, they will always be proud to brag about it at the local lawn bowls club…
Note: I haven’t linked to the website because I don’t want to give him SEO juice 🙂