I belong to an Alumni group of present and former startup CEOs. The organization began in the late 1990s and inducts about 50 startup CEOs each year. There are over 1,000 members of the group and it has an active listserve. It’s a great place to ask for advice, referrals for service providers, and introductions to talented individuals seeking employment. And sometimes… it’s frustrating.
Want an example?
I will paraphrase a member’s question, “Should I or when is the right time to create a Board of Directors or Advisors?”
Almost immediately, some members started giving advice. Other members told stories about what worked for them.
I finally had enough of the nonsense and replied with the following note:
I have tried so hard to keep my inner Mr. Cranky in check on this board and in life for the last few years. For some reason, this thread has risen to the level where my inner-crank has screamed to be released. I’ll try and keep this rant mildly uncranky. Let’s see if I succeed.
If you walked into a doctor’s office and said, you know Doc, yesterday, I had a headache, and without asking one follow-up questions, the doctor replied. I once had a patient who had a headache and we gave him a lobotomy and the headache stopped, so let’s schedule you for surgery. Would you go back to that doctor?
Giving an answer with limited information is malpractice. It’s not a diagnosis, it’s a premature prescription.
Also, telling someone what worked for you doesn’t mean it would work for others. Antidotal stories are mildly helpful and often a simple humble brag. Everyone’s situation is different. The question, “what would you do,” is better answered, “I could tell you what I would do and it would work if you were me, let’s determine what you should do.”
Questions like, “should I create a board,” require a round of clarifying questions and are better served in a conversation. For instance, here’s a list of follow-up questions that might help in a diagnosis.
- Why do you ask the question?
- What’s missing on your team and the current group of advisors that you believe a board could enhance?
- How do you think a board could help you?
- If you did have a board, what would be the background of the people you would seek as board members?
- Can you think of a situation in the past that could have been handled better if you had a board?
- What have you done so far to answer this question?
I could think of about 50 other clarifying questions and based on the answers, there would probably be at least another 100 great follow-up questions.
Answers like, “this is what worked for me,” are great if the CEO has the same, knowledge, skillset, traits, and professional network as you. If his company has the same issues, business-model, is in the same stage, as you. They’re mildly helpful but not the answer.
So allow me to answer the question, as Mr. Cranky (Mr. Hyde to my Doctor Jekyll) would.
Yes, you must form a board immediately. It should have 8 Members. I have suggestions for specific people and some background for some archetypes:
- A construction worker – because you’re building a company and they know how to build things
- A theoretical physicist from MIT with a background in rocketry – because this is rocket science
- A Ninja or a Rock Star – because everyone is looking for a Ninja or a Rock Star
- Chris Rock – Because someone needs to keep the board meetings interesting
- Clarence Thomas – to ensure that you stay on the correct legal path and there are no conflicts of interest
- A Cheif of a Native American Tribe – because startups are like a casino and he will know how to run a casino
- Lady Gaga – because she’s multi-talented and probably could help you raise money
- Elon Musk – because I couldn’t think of another person or archetype to fill the 8th slot
How to structure your meetings:
- You should have meetings at 9 PM on the 6th Wednesday of each month.
- Hold the meetings at the Palm in Tysons, and make sure that your waiter is Mishka (he’s funny gregarious, and will add to the atmosphere).
- Don’t record or take notes at any of those meetings because they are all discoverable in court.
- Give Each Board Member 10% in options for the stock.
Wow, that felt good and I apologize for the length and tone.
The world is populated by three kinds of people. The reaction on the listserve illustrates this fact.
- Those that roll their eyes and say, “what an ass.” – People of superior intelligence and impeccable Taste.
- Those that respond to the entire group, “we missed you, Mr. Cranky” – Those that don’t care if they tarnish their reputation by associating with Riff Raff.
- Those that sent me a personal message of thanks. – Those of questionable taste but the good sense to hide that fact.
I’m not judging, well maybe I am, yet I will say this to all three types of people… you’re not wrong.
Making an important business decision isn’t like deciding where should we go for dinner. Even if there was a Yelp for business decisions, a seafood restaurant may have 5 stars but you like steak instead of seafood, or at least I like steak. Your business, your team, and your business model, all combine to make every business decision as individualized as fingerprints.
There is no quick answer anyone can give you without getting a ton of context. Getting context requires a process, and ultimately you will have the ability to make that decision if you follow a well-designed process. An executive peer group or an executive coach, trained in the decision-making process can help.
I’m an executive coach, If you’d like to experience what it’s like to work with an executive coach, you can schedule a complimentary one-hour coaching session here. I can ask you some clarifying questions and maybe I can help you solve a pressing business issue.