Since we sold MyBlogLog to Yahoo in 2007, I’ve regularly been asked to advise startups. I’ve agreed several times and I’ve brought on advisors to help with the companies I launched after. I’ve found the experience to be a mixed bag on both sides of the table. If you’re thinking about becoming or bringing on an advisor, maybe you’ll find this series useful.
- Advisors only work as hard as the CEO drives them
- Advisors usually provide the bulk of their value in the first 30 days
- Advisors are driven by the desire to be helpful (you are here)
- Try a 90-day informal arrangement before committing long-term
Advisors are driven by the desire to be helpful
I feel incredibly lucky to have been given great opportunities and counseling from entrepreneurs who came before me. There’s an obligation to give back that I’m happy to embrace. And like most people, I love to hear myself talk and be made to feel special (Todd says I love this more than most) . Advising magically accomplishes all these things.
But one thing that really deflates my enthusiasm is feeling like all my wonderful advice falls on deaf ears.
BEST PRACTICE: Always find something to act on after talking to an advisor.
One thing I’ve learned from Brad Feld (whom I’m honored to consider a mentor) is to couch my advising as “data, not truth”. It’s up to the entrepreneur to evaluate the content of my ideas and determine what is relevant to their own unique situation. But if, after an hour-long, wide-ranging conversation with someone, they can’t find one tiny thing to implement or act upon, I can’t help coming to one of the following conclusions:
- The entrepreneur doesn’t value my feedback
- The entrepreneur isn’t really listening to me
- The entrepreneur isn’t very motivated
None of these make me feel good about the relationship. The first time this happens, I don’t take it personally. After all, the entrepreneur is super busy and maybe my advice wasn’t relevant. But if a pattern emerges, I’ll disengage.
After a conversation, there’s almost always some tiny feature that can be implemented, or tweaked, or acted upon. I don’t care if it’s as simple as changing the color of a button on your registration page. Do it, then tell the advisor that you did it. It makes them feel awesome and motivates them to think about your business all the more.
BEST PRACTICE: Use this same strategy to engage future investors.
When people see their ideas manifested in your product, it gives them an emotional stake and a sense of ownership. If you talk to a potential investor and you don’t walk away with a half dozen suggestions about your product, they’re probably not a good match to begin with. If you do get those ideas, do whatever it takes to turn one into a reality and get that investor on the hook emotionally.
My partner Todd is the master of this. Whenever we’re in an investor meeting, Todd keeps Skype open and will eventually hear an idea that he knows the team can bang out in a few minutes. At the end of the meeting, Todd inevitably says “Hey, remember what you suggested earlier?” Then he waits a beat, turns the laptop around and says “Were you think about something like this?” It’s magic, baby.
BEST PRACTICE: Recognize that your stock is practically worthless in your advisors eyes.
Given the choice between stock and no stock, I’ll always take the former. But again, it’s not why I’m advising you. I’m doing it because I like you, I like your product and hopefully I’ll learn something new in the process. We know that most companies flame out and we’ve been around long enough to see it happen with our own companies as well as with the people we advise.
We *want* you to succeed and we think that you will, or else we wouldn’t bother advising you. But at the end of the day, we ascribe pretty much zero value to your stock until you’ve sent us a check after you’ve been acquired.
I bring this up because friction can occur when there is a disconnect between founders (especially first-time entrepreneurs) and advisors. Yes, you’ve just raised a Series A and suddenly my common stock is worth $50k in fairy gold. All the above rules still apply — if you don’t keep me engaged, I can’t help you out. And when your company does hit a home run, I’ll be the first to admit that it had nothing to do with me.