For some reason, everyone feels legitimate in telling founders what to do.
Great companies are built following non-consensual paths.
By pursuing ideas that seem worthless to others, many founders thrive because of their early, irrational decisions. Yet there are advisors who try to guide early-stage ventures away from the edge. And if founders listen, they give up the very things that make their startup unique.
Bad advice can be deadly.
Advisors come in all shapes and sizes, with extensive - and convincing! - experience, whether as successful founders, skilled financiers, or top executives at larger companies. One thing they have in common is making statements that seem certain and objective:
"Don't focus on revenue, focus on the product. That company raised $20M with $0 revenue." - angel investor
"Hire a C-Suite of experienced people and I'll secure $50M in funding" - financier
"Advertise on national TV, that's what worked best for me"- dotcom entrepreneur (50% of your seed round: gone)
"Don't grow too fast this year, it will be harder to match the same growth next year." - seed fund
"Add more features", "launch in B2B", "lower your prices", "work with distribution partners", "get more grants"... the list is long.
The problems start by following observations derived from an advisor's own experience as universal truths.
As a founder, how can you spot valuable advisors?
It’s about getting leverage. Not being told what to do. A great piece of advice should empower you at every level: ambition, confidence, and speed of execution.
Good advisors know your context - product, market, competition, revenue, team.
Bad advisors don't do their homework.
Good advisors listen and help you decide.
Bad advisors tell you they've already seen it before.
Good advisors ask questions.
Bad advisors give answers.
Good advisors push you to be bolder.
Bad advisors slow down every decision.
Good advisors are accountable, writing out their advice.
Bad advisors never write anything down.
Good advisors don't know everything.
Bad advisors always have an answer.
Good advisors give you energy.
Bad advisors suck your energy away.
Good advisors are aligned with your incentives (or do it for free).
Bad advisors ask to be paid cash.
Good advisors help founders build up intensity.
Bad advisors teach them lessons.
Intensity is the only thing that leads to faster hiring, engineering and sales cycles... and the more cycles, the more founders learn. Founders have to learn lessons the hard way and become better decision-makers.
Where are the good advisors?
In Silicon Valley, many people became valuable advisors because they have been exposed to hundreds of successes and thousands of failures. But those advisors are most useful for companies in ecosystems with access to insanely large amounts of capital, where employees can quit their jobs in the blink of an eye, and where failing isn't seen as a death sentence.
Really, good advisors can come from anywhere, as long as they’ve been exposed to a very large variety of startup cases and cultures!
The good news is that today, the rise of remote has made many advisors more accessible.
Entrepreneurs are facing two types of problems.
Strategic problems: Should I fundraise? Should I go international? Should I increase burn? Should I start investing in that trend I really believe in?
=> These require bold, important decisions.
Operational problems: How should I incentivize my sales team? How can I increase engineering velocity? How can I improve my onboarding process? How should I communicate my company culture?
=> Gathering more information will help you make better decisions.
Build your own support system.
Being a founder can feel lonely and schizophrenic at times. You have to tell the world how everything is going perfectly, yet you spend your days fixing problems.
At the beginning of your startup you want to optimize for speed and intimacy, so start with a very small group of people. You'll be able to add new people as the problems you encounter change.
Advisors, for strategic problems.
Keep a highly-curated handful of good ones you trust. “If you want to make the wrong decision, ask everyone". Often your board members are part of this group but they are not always suited for it. You can't pay for good advice.
Experts, for operational problems.
These are other founders, top operators from companies that have already done it, service providers. You can pay for this type of expertise.
Peers, for day-to-day decision making.
Surrounding yourself with people who are at the same stage, plus some people who are just one step ahead is extremely beneficial. These are the people who will help you call the shots. They are your community and will push you to the top.
I know it doesn't come easy, but the internet helps a great deal in building this system up!
At The Family, we are lucky enough to work with hundreds of founders every year. They operate in different geographies, different industries, and at different stages. We dedicate 100% of our time to them - yes, 100%. We don't hunt for startups, we don't negotiate term sheets and we don't have operational jobs on the side. I like to think that few people have spent more time with entrepreneurs than Oussama, Mathias, Nicolas, Alice and I. We are far from being perfect advisors but we do our best and fight by your side.