How to be a Good Member of a Board of Advisors
There are plenty of good pieces on the Internet about how to build a good board of advisors. Go ahead, Google them. There is one super post about why you shouldn’t bother to build an advisory board by the smart guys at 37Signals. Essentially, they’re saying that too many supposedly critical things are myths that keep you from building the company and products. But what if someone has approached you to be an advisor to his company? There aren’t very many pieces about how to be a good advisor. So how do you provide value as an advisor?
1. Don’t be a professional advisor. Don’t go seeking to sit on a bunch of advisory boards. Few things deserve your time and attention so be selective – get involved only with companies where you have unique insight and passion to contribute. And I mean don’t be a professional advisor. If you ask for cash compensation, you’re a problem and not a solution, especially for young startups with limited resources. If the management team desperately wants to compensate you, accept a fraction of a fraction of a fraction of equity in stock options that vest over time. Don’t be a resource drain.
2. Get out of the way. Too many advisors want to get actively involved in a company’s operations and tell management what to do. The management team should know more about its business than you do and if it doesn’t – you’ll never be an effective advisor for the company anyway. Being an advisor should never be an exercise in ego. If you have to insert yourself to feel valuable, you’re the wrong guy. Only get your hands dirty if the management team asks you to dive in.
3. Challenge convention. Unlike members of a formal board of directors, you as an advisor cannot be held liable for the company’s actions. This allows you to be more objective and give uncensored advice. This freedom is probably the most enjoyable thing about being an advisor. You don’t have to have all the right answers, you just need to be gutsy enough to question everything the company does and how it goes about doing it. This is where you can have the most impact on the company by helping management to consider different strategies. Focus on strategy, not tactics.
4. Open up your network generously. You’ve spent your whole career cultivating valuable relationships. Connect the company to potential investors, partners, and customers. Of that list, customers rank supreme. Investors and partners will show up if the company has a growing customer base. But potential customers could care less who a company’s investors or partners are. So if you know someone or some organization who could use the company’s products or services, be the leadoff hitter on the sales team. But hold the management team to high standards. Make sure milestones are being met and progress is being made before you haphazardly make introductions. Let management know that if they do their job, you’ll be their biggest evangelist.
5. Get out of the way. Did I mention that already? This time what I mean is to know when the company has outgrown your expertise and ability to contribute. There is a lifecycle to all engagements and you don’t want to be the person to outlast your welcome and usefulness.