Organising your venture’s supporters Priscila Bala of Octopus Venture Capital, (formerly Mentor Director at the Yale Entrepreneurial Institute) has emphasised the value of advisers, and suggested how to set up and make good use of them.
Savvy enterprise start-ups understand the power of relationships. When it comes to entering new markets, gaining the support and endorsement of well-connected or local industry players can make all the difference. Advisory board members can fill knowledge and network gaps within your company or your own background – to help with product development or sales strategy or to introduce them to valuable clients, suppliers and investors.
An advisory board can be a bounty when you find the people who are experts at solving a set of problems you have, engage them with clear expectations and rewards, and turn to them whenever you have issues related to that problem. To find the right people, you have to be clear on what problems you want them to help you solve.
For example, Steve Blank [of I-Corps] suggests (1) that there are five primary types of advisory board members:
- Technical advisor: for product development advice
- Business advisor: for business strategy and guidance
- Customer advisor: for value proposition and positioning advice
- Industry advisor: for domain expertise
- Sales advisor: for market tactics and demand creation
Beyond these, it’s important that you identify the crucial challenges in your scaling up roadmap, to determine what kinds of advisors will be strategic to you, and which will complement your team’s skillset.
Go for ‘stars’! Advisory member relationships can work particularly well if the candidates you are courting are well-connected leaders in their space
Clarifying your objectives will also enable you to have you targeted conversations. For example, if your goal is to grow a base of customers in a particular vertical, try the following:
- Ask your customers or prospect customers who they respect.
- Ask your Board of Directors and industry connections for referrals.
- Have a point-of-view related to the industry, and build a profile and relationships based on your expertise.
If you are a first-time entrepreneur or an early-stage entrepreneur, there are often many apparent candidates but who won’t be valuable advisors for your business. Ask for referrals within the industry and spend time getting to know the advisor. Before formalizing any advisor relationship, ask for their input on a few demonstrative issues — how would they approach them? Who might they reach out to? What strategies have they seen in the past? What were the outcomes? Which risks do they anticipate?
Compared with Board members, you can focus the work and input of those advisors much more narrowly to their expertise, there is more flexibility on the time and level of engagement the advisor can offer and you can successfully engage a larger group of advisors within this mandate.
Most companies don’t engage their advisory board in meetings as a group; instead they reach out to specific advisors as needed, and set different frequency for those interactions.
Strong advisors are busy people. Since you likely will only have a limited amount of their time each week or month, be rigorous about setting agendas for each meeting or call, be explicit about actionable items between conversations (your action items and theirs), and send follow-up summary emails after every meeting. Some entrepreneurs find it helpful to use a running Google Doc shared with the advisor to keep track of ongoing notes together.
Ongoing feedback is another helpful tactic to successful advisor relationships. Mention to the advisor up front that you will want to spend 15–20 minutes in your third or fourth meeting talking through how the relationship is going to-date, and how you can improve your collaboration. Advisors are professionals, and should be receptive to feedback. Some relationships will work better with a set schedule of interactions; others might require more flexibility and unfold in “bursts” of support. Work with the advisor to find the style and cadence that works best for your partnership.
Compensate your advisors. In addition to aligning incentives and recognizing that expert time is valuable, compensation will make you more disciplined about the calibre of advice and support you are seeking and getting. It formalizes the professional relationship you expect from advisors, as it does your commitment to receiving their open and honest expert feedback, rather than having them tell you what you want to hear.
Advisory boards can be a powerful asset, accelerating your access to people and solutions that are key to your company’s success. Advisors can make strategic introductions, help you secure contracts or fundraise, attend strategic meetings with you, help you secure press coverage for your company or serve as a reference for your product or your work, and help you recruit other members of the advisory board or your team.
(1) My work at IdeaLondon came up with exactly the same analysis.
See the full article at: https://medium/octopus Ventures/how-advisory-boards…
John Whatmore, September 2017