Strong Opinions @marksbirch

Most startups have advisors.  Whether it is for advice on product, markets, funding raising, or general business guidance, there is significant value in bringing on people that can provide sound counsel and an outsider perspective.  In addition, advisors can confer credibility, an extensive network, and visibility.  However, most advisory relationships end up being a complete waste of time for both the advisors and the entrepreneurs.

How can you as a founder prevent your advisor relationships from becoming contentious or undervalued?  The first thing you need to understand is that an advisor is different from people you simply ping for advice.  An advisor is a formal relationship outlining goals and commitments and often some compensation, which usually means a small percentage of equity*.  There is a responsibility for the advisor to be accessible, provide thoughtful advice, and to be involved in the startup.  For anyone else that you poll for advice, there is no such expectation or responsibility.

You then need to understand if you even need advisors.  Everyone can use advice and an outsider perspective.  That is not in question, and generally people have a small cadre of trusted relationships to lean on for those gut checks when things get crazy.  What I am speaking of here is whether you really need a formalize structure with a group of dedicated advisors.  This takes effort and care and engagement.  This is where most advisory relationships fall down.

Realize that advisors are sacrificing their own time for no obvious benefit on their end to help you.  They do not generally need to be prodded to get engaged.  While they might be busy or unavailable at times, they made a genuine commitment to assist you in achieving your vision.  By not leveraging this well-spring of good intentions and support, you are wasting a massive opportunity and hurt your own credibility with people that are influential and networked.

The three main problems that come up with advisory relationships:

• Start out energetic and quickly fades
• Actively solicit advice but constantly ignore it
• Use advice as a substitute for own decision making

The effort in forming an advisory board is exhaustive.  Most potential advisors do not want to commit because of worries about the time and social currency involved.  In all the excitement around getting a solid group of advisors onboard however, little thought goes into how to actually leverage this group post formation.  What happens then is that the first few meetings or calls go well, and then things go quiet soon after that.  Without a plan around the type of advisors you need and how to leverage advisors on an ongoing basis, you lose out on an incredible resource.

The second and third issues come down to entrepreneur maturity.  To be an entrepreneur takes a bit of swagger and comes with a bit of arrogant confidence.  You are building a company not just because you see a need in the market, but that you have what it takes to fill that need better than anyone else.  This is not a bad trait.  When an entrepreneur takes it too far however, they lose out on the benefit of sound advice and feedback.  These types of entrepreneurs will say they want advice, but anything that is contrary to their own views gets quickly dismissed.  This is particularly evident with solo entrepreneurs that believe they know what is best, and form advisory boards that are merely window dressing.

The opposite of this is the overly humble entrepreneur.  They are in constant conflict with decisions therefore they leverage advisors to help sort out their thinking.  The problem is that these entrepreneurs are using their advisors as a crutch for making decisions on their own.  There is nothing wrong with taking advice, but becomes problematic when there is no critical thinking that goes into analyzing the advice.  You are the entrepreneur, so it is your job to make decisions and use your own gut to guide the business.  That is something that cannot be outsourced.

Not all issues come down to the founders.  There are plenty of issues with advisors that simply do not work out.  Some are inaccessible.  Some advisors with strong personalities can inadvertently bully startups and become an overbearing influence.  Then there are other advisors that simply do not have all that much to give.  But more often than not, the issues start with the entrepreneur.  If you are the own soliciting advice and reaching out to advisors, then the onus is on you to make the relationship work.

If you are going to get advisors or form a board of advisors, know why you want this and do it for the right reasons.  They are not there to simple make you look good.  They are not “yes-men” to pat you on your back and stroke your ego.  They are not employed by your startup nor are they founders.  They do not make decisions for you.

The role of the advisor is to give you quality advice.  Perhaps they also leverage their own network to help you out or lend their credibility to your venture.  Maybe they even roll up their sleeves and lend a hand on occasion.  But the key reason you have advisors is to have that sounding board and use their knowledge and experience as inputs to help guide and sharpen your own decision making.

*Compensation tends to be equity, which is fine, but it should be a very small amount.