It is my pleasure to introduce Mahendra for an AMA today at 12PM PST. He is the author of The Business of Venture Capital and co-author of Startup Boards, recovering VC and catalyst for security startups. Ask questions in advance.... :)!
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Hunter
@eriktorenberg - VC rock star and co-author @bfeld is joining us today - look forward to your questions on #startupboards
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What if anything is the difference between a Mentor and an Advisory Board Member? Still trying to get my head around this one!!
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@dturneresq I guess I am asking this more as a way to develop myself as a mentor - so I maybe it should read: What makes a good Startup Company Mentor?
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Hunter
@dturneresq A mentor's goal often is to work with you as an individual. This can be one-on-one and often extend beyond the company's dynamics. The Advisory Board member balances your goals with the company progress - it's a broader angle lens.
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Hunter
@dturneresq Being a good mentor is a life long learning process - In working with entrepreneurs, I continue to work hard to (a) listen beneath the surface (b) be a student of human behavior / motivations and (c) ask more often "How can I help?". People engage when they see you are making an honest effort - not necessarily having all the answers, but at least trying.
@eriktorenberg Having co-authored several books with different people, there is no one way to do it. In Startup Boards case, we split things up and eventually got a first draft done. I then spent a lot of time editing while @mahendra_gr filled in some of the gaps. I think kept doing editing passes and asking @mahendra_gr for small bits and pieces until we were done.
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Hunter
@bfeld@eriktorenberg I hadn't done a co-authorship and also wanted to respect the pressures on Brad's time. We started with the Table of Contents, and added some meat as we progressed. Brad offered 20/30 CEOs and VCs we ended up interviewing to add color and context. I'd write some and send it over to Brad - he would do the same and we went back and forth. @abatchelor who is Brad's better half even helped edit my Kings' ...err.. immigrants english ;-)
Hey @bfeld and @mahendra_gr! Thanks for doing this AMA.
Just to paint the picture: We are 3 weeks into a pivot from a product called bookmarq (imagine a prettier goodreads), into a product called streaq, which aims to help people build better reading habits through gamification and social accountability.
Question: While we were early enough not to have a BoD, for the companies that do, are there any cautionary tips or tales when it comes to pivots? Do the dynamics change? Can some BoD block a pivot because they don't see the value in it?
@meidlin First, make sure you are defining pivot correctly. Many people call things pivots that aren't - most businesses are a continuous process of mistakes, iterations, and changes. And, if it's a fundamental pivot, make sure your board is part of the discussion and decision process.
Welcome both! My question is, what inspired the book?
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Hunter
@lejlahunts@bfeld has seen the entire arc of investments (startup to IPO) across multiple companies. I invested in 50+ seed startups via two funds. We both saw an opportunity to help the first time founder / CEO to be better prepared for board meetings. Mostly, startup boards were behaving like "mini version of larger boards" and that needed to change. The focus needed to shift to supporting the CEO.
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Hunter
@lejlahunts (Sorry this answer is for @bentosell's question on crazy stories) - I am sure @bfeld has more that I do. One somewhat crazy board story = first time founder CEO walks into their first board meeting - no agenda or packets were sent ahead of time. The meeting starts with everyone staring at each other awkwardly around the table. The founder CEO says, "Soooooooo...what should we talk about?" Neither the board members offered, nor the CEO had asked on how to prepare for their first board meeting.
@ems_hodge - I am generalizing here. From what I have seen, some investors often do not engage meaningfully. The classic example was one board member who showed up at meetings asking "Can we start the meetings with a reminder on what the company does?' Investors make assumptions on how they can help without asking the CEO and when things dont work, they try to fire the CEO. As @pmarca recently tweeted, then you have 2 problems.
Hi @mahendra_gr! What are the biggest misconceptions entrepreneurs have about how to best utilize their board members?
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Hunter
@melissajoykong The one misconception = entrepreneurs often get into minutae of operational details. Some CEOs get too worried on expenses statements (Should I Spend X on my hotel stay? I had one CEO ask me to weigh in on their logo design and another wanted me to read their blog and edit it. This is all good but the board wants to help with (a) strategy (b) opening doors with customers and investors and (c) financing.
I've observed that some boards take more of a backseat to a startup's growth, offering advice but not necessarily always/significantly changing the company's strategic direction. At other companies, boards are front and center; founders/executive teams will come out of board meetings and make significant changes to the company's overarching strategy, often without communicating to the rest of the company the reasons behind sudden shifts in strategy. How much/what kind of an impact do you think a board should ultimately have on a startup's growth?
@melissajoykong There are good boards, neutral boards, and bad boards. Even good boards often have big struggles between board members based on perspective and personality. Ultimately, a board should try to (a) do no harm while (b) helping the CEO and leadership team be effective, as long as the board supports the CEO. What is needed here will vary dramatically based on the skills and experience of the CEO. And, if the board no longer supports the CEO, it needs to do something about it.
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Hunter
@melissajoykong - Great question - A board can have a tremendous impact on the startup, just like a coach can make a big difference to any team. The CEO should always be front and center - not the board. And it's the CEO's responsibility to gain trust by being open about strategy shifts.
A two for one! Thanks guys. Is there a way to quantify which boards are the best? Another way of asking the same question is who makes up the best boards in history?
@kunalslab I don't know of a way to do this. I've been on effective and non-effective boards with the same people. The ones that are effective work hard at it.
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Hunter
@kunalslab The best boards are the ones we never hear about - we just see successful companies as a byproduct of their work behind the scenes. Not easy to quantify but we included a set of tools on how the CEo can evaluate their board. We used stuff like engagement, value add, responsiveness and request the CEO to grade each board member at least every year.
Q. What's the most significant mistake you see startup founders repeating when constructing their boards? I'm sure there are many but is there one that is more devastating than the others that could be easily avoided?
@erictwillis Believing and acting like they report to their board. This is a huge mistake that comes up, especially with founders and CEOs who have never been in the #1 role in a company.
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Hunter
@bfeld@erictwillis #secondthat A board is looking to help - CEO's who can ask for help in thoughtful ways can often build a better dynamic with their boards.
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