It’s Hard for Start-Up Owners to Find Good Advice
A lot of people want to tell me how to run Posse.
At the moment we’re
deciding whether to raise a large capital round and go for growth or
keep things tight and focused. Both approaches have merit, and I respect
all who have offered their guidance.
But people are passionate about
their opinions, and that can prove confusing.
When I started my
business four years ago, I was hungry for advice. I’d never worked in
technology and had no experience raising capital or building a product. I
cast my net as far as I could and sought help from people who seemed to
know what they were doing.
Finding support was
easy. Everyone I approached liked my idea; many wanted to be involved. I
created an advisory board and handed out shares as if they were candy. I
surrounded myself with impressive names, and they all had friends they
wanted me to meet. Before I knew it, I had 50 shareholders, and we were
all on a sugar high.
Everyone had ideas and
opinions, and they all wanted to meet with me. Many gave me books to
read and research to do. I sipped coffee after coffee and read deep into
the night. I wanted to appear grateful for the support, so I reported
back on how I’d benefited from the advice and emailed notes on what I’d
learned from each book.
All of the advice
appeared valid, but much was contradictory. I didn’t want to give
offense by ignoring well-intentioned suggestions, and I burned up time
holding meetings and keeping up with my reading list. I couldn’t make
decisions and had no time to focus on getting work done.
But I was confident
that my roster of advisers would pay off by impressing potential
investors when I went to raise my first round of capital. Surely they
would boost my credibility.
Not exactly. During
pitches, every time the adviser section of my deck came up, I got the
same response: “I’m impressed you got X and Y involved. Have they
invested?”
Well, no, they had
not, which led to a follow-up question: “If experts in the field hadn’t
committed to investing despite knowing all of the company’s details, why
should we?”
Once I realized that
these big name advisers who hadn’t invested were having a negative
impact on my ability to raise capital, I removed all references to
noninvestors from my presentation.
Now I’m four years in,
and I still crave advice. I think being a sole founder increases my
need for reassurance that I’m on the right track. I always find that
having a wide range of discussions, as we often do during fund-raising,
helps me refine my strategy. But I’ve also found that too much advice
can be a distraction and that advisers who want equity but aren’t
willing to back the company are not always the best people to have
involved.
Now the company is
moving on to the next phase of growth. We’ve been a start-up valued at
less than $10 million with good prospects but with a small team and with
very little revenue. As we start to become a serious business with
significant revenue, I’m beginning to move in a different world, one
where I need new advice.
I’m also at the next
phase in my own growth. I used to see myself as inexperienced and in
need of help. Now I make my own judgments rather than deferring to
people I see as experts. I still ask people I respect for their opinions
and ideas, but I’ve developed a strong sense of whom to trust.
I’ve learned a big
difference exists between people who enjoy giving advice and those who
really care about me and the business. There’s also a big difference
between people who think they know how to build a company like ours and
those who have actually done it.
I can think of four
people who have helped me at Posse and without whom we would have
failed. But the new phase we are entering requires a new group of
advisers. Here is some of what I’m looking for:
Previous success in similar fields.
Some of the people I enlisted to my early advisory board sounded
impressive. They’d held high-level positions at big corporate companies.
When we suffered some early start-up bumps, though, they were
unprepared. Their knowledge of how a start-up should grow was based on
watching “The Social Network.” When we didn’t hit it big straight out
the gate, they became concerned. I learned to look for people who had
built a similar company from the ground up.
Focus on the granular.
Many people who want to give me advice start with a discussion about
the potential size of the exit and how quickly we’ll be able to get
there. This always creates distractions such as attending to the setting
up of complicated corporate structures to minimize future tax or
setting up big sales deals ahead of building a product. I’ve found that
the best advisers are the ones who drill me on what we have to achieve
in the next three months. They’re interested in the granular metrics of
the business, how we can improve them and how we can create replicable
processes. >>>
Commentaires
Enregistrer un commentaire