It happens all the time. A founder surrounds him or herself with a skilled group of advisors — maybe one or two from investors, a trusted mentor from their past, perhaps someone influential who can open doors. But as the company grows and pivots, it becomes clear this is not the best team to create long-term value. Can this situation be avoided by choosing advisors more wisely? Can it be turned around once things aren't great?
As a partner at First Round, Phin Barnes has seen a common problem emerge: Advisors (especially investors) default to removing roadblocks for the companies they support — everything from finding them new hires to good lawyers — but spend very little time offering strategic, tactical advice that could make an even bigger difference.
In this exclusive interview, Barnes contends that it doesn’t have to be this way. Founders can ensure that they don’t miss the opportunity presented by their advisors — they can deepen these relationships, use them to maximize their knowledge in certain areas, and drive more productivity. The following seven tactics can help.
#1 Really Pick the Right Advisors for You
It’s possible to plot most advisors along a spectrum. On one end, you have the person with incredible domain expertise — whether it be in enterprise sales or internationalization, etc. — but they have a really hard time unpacking what they know. On the other end, you have the advisor with less hands-on experience but who is very skilled at the art of advising. They know how to filter and problem solve and prioritize. Depending on your business, you’ll want to draft advisors that are a blend of both poles, but might land closer to one than the other.
“A lot of people’s first instinct is to find an advisor who is really good at something very specific. Their expertise looks great on paper,” Barnes says. “But it’s so important to balance that against how you relate to the person, and their personal style in an advisory role.”
Styles range dramatically from confrontational to encouraging to analytical. Some advisors dive right into what you’re doing and immediately tear it apart in nine different ways. Founders need to decide which style they’ll relate to best before they agree to work with anyone.
“I would recommend looking for an advisor just like you’d look for a co-founder — someone who compensates for a weakness you know you have,” says Barnes. “The best advisor for you will complement your strengths and cover for your weaknesses. That’s the only way they’re going to be able to see around the corner for you and encourage you to think in different ways.”
Finding an advisor who looks good on paper isn’t that hard. There's no shortage of brilliant, accomplished and experienced experts out there to draw from. What you don’t want is to learn that you have conflicting styles once you’re stuck with them. How can you avoid this? Interview them, Barnes says. And be sure to get some backchannel references by asking companies they’ve advised prior too.
Always ask someone about how they engage as an advisor before you commit.
In interviews with prospective advisors, Barnes recommends the following:
- Give them a couple tough scenarios that could happen to your company. How would they help you navigate them?
- Be transparent and tell them about a real concern you have about your business. Ask them what they would do if it became a reality.
- Ask them about their previous advising experience. What worked best for them? What didn’t work? How do they think they have evolved as an advisor as a result?
- How founder-centric do they think they are? Will they actually be on your side through thick and thin? “The best way to get this answer is to ask about some of their past advising successes,” Barnes says. “How much do they talk about the founder versus themselves? Do they say they made things happen or that they helped the founder make things happen? If they tell the story through the founder’s eyes, that’s a good sign.”
- As you ask them about their past experiences, are they always going back to previous examples of their accomplishments or are they talking about how they’d leverage their experience to move your company forward? “It’s important to know if they’re going to be able to synthesize what they already know with new situations, or if they are constantly going to be saying, ‘Well, this is how we did it before.’” The former is much more valuable.
- Ask them if they’ve faced a situation similar to yours before. If they answer by giving an example from a past company only, that’s telling, Barnes says. “You want the person who gives you that example but then says, ‘But your situation seems different because of X, Y, and Z, so you might want to think about it this way...’”
#2 Know When You Need Advising the Most
“If you’re a founder, think about your job day-to-day leading your company. You’re probably making a bunch of decisions fairly quickly or effortlessly, but where are you hesitating?” Barnes says. “Wherever you find yourself balking, that’s where you should engage your advisors. Even if you don’t know it yet, it means you need help.”
These are the areas where an incremental shift in perspective could be tremendously helpful. Seasoned advisors know when to interrupt an entrepreneur’s flow. They’ll see the hesitation even if things are operating smoothly, and they’ll simply ask about it.
“When I was running my own startup, I knew when I had a blind spot or when I wasn’t certain because I just felt different — less confident, more patient even. I would find myself waiting on things, trying to collect more information.”
To be a founder you have to be fearless. When you lose that feeling for even a second, pay attention.
“When you find yourself constantly waiting to make a decision, that’s a great time to ask your advisors to help you clarify the situation,” Barnes says. “You’re probably staring down a problem set with a ton of variables and you’re lost in it. Pulling in someone else with experience can help you boil that down to two things that matter, and then you have a much better chance of solving the problem.”
Good advisors and coaches will reframe the questions you’re asking yourself as a founder so that you find the answer yourself. Their job is to be a filter that also gives you more confidence in your abilities to make good moves for your company.
One caveat: Before you bring an advisor into a problem, you should try your best to identify what is really going on and give it shape. Why is a decision holding you up? Is it intimidatingly big? Does it have a high chance of failure? Do you simply lack the knowledge you need to make the call?
“If your car has ever spun out on some ice, you know it’s best to turn into the skid,” says Barnes. “Same goes for your weaknesses as an entrepreneur. Figure out what’s happening and then steer into them. Really understand them, no matter how nasty or scary they are. Once you understand where you’re lacking, you’ll be that much more motivated to get help. And that’s a strength.”
#3 Break the 80-20 Rule of Advising
As Barnes has observed, advisors usually spend about 80% of their time with a company focused on reducing friction. This includes a lot of logistics, like advising on equity splits, connecting them with the right PR firm, helping with recruiting, and more. And indeed, friction reduction is a very important function that advisors can play.
“There are all these logistical areas where the question has been asked and answered multiple times, so an advisor can just help your team quickly get to the best practice and move on,” he says. “But in a lot of cases, that leaves only 20% of the time for them to help with serious strategic guidance. That’s the harder part of the work but it usually has the most impact.”
To get the most out of both types of advising, Barnes recommends that founders look to work with people who reduce friction primarily through making the right introductions. It’s especially helpful if a connection can be made with a fellow noncompetitive entrepreneur who has gone through a situation before or is currently handling something similar. They're closer to the work and the relevant issues than the advisor.
This way, the advisor can focus more time and attention on core, strategic advising. The challenge with providing this type of guidance is that it has to be very customized to the individual company or specific founders. “Being able to give good advice in this area often requires knowledge of the company from inception through their vision for the future. You have to get the nuances of the market and the interplay of the company and its competitors.”
As you can imagine, this makes many advisors hesitant to dig into this kind of work. So how can you get your company’s advisors to break the mold and leverage their experience to help you succeed?
“Don’t expect your investors or advisors to have the answers to all of your big questions. They might know the basic stuff off the top of their head, or know who to introduce you to, but on the big decisive stuff tell them instead that it’s their job to be a sparring partner,” Barnes says. “Define your relationship this way: You’ll tell them what you’re thinking or planning to do, and their job is to back you into a corner and make you fight your way out.”
When you set things up this way, your advisor has to spend less time learning everything about your company — a tall order when they're probably working with several — and you end up honing and strengthening your own arguments. “The marginal change that occurs when a founder has to defend or explain their position is where the real value is created,” Barnes says.
The entrepreneur often already has the best answer. A good advisor will bring it out by forcing them to walk through the problem again and again.
“When this is how you work together, advisors end up contributing much more strategic, tactical value,” says Barnes. “And actually, if a VC comes in and says they have an obvious answer for you to one of these deeper questions, you should be a little skeptical. Every company is different. Just because they have more experience doesn’t mean they have the best answer.”
When an advisor is your sparring partner, they bring their history and experience to the table in a more complementary way. As a founder, you can decide what is relevant to your company in the present, when to listen and when not to.
Watch out for advisors who talk more than they listen, Barnes advises. Even if it seems like they are bringing more to the table, they make it difficult to disagree. They take the power away from founders, who should always be the ones driving the conversation, he says.
“I’ve seen advisors who make these really broad, wholesale suggestions to founders, saying things like, ‘This is obvious’ or ‘That won’t work.’ It turns out to be way more effective if your advisors choose a specific area to focus on and push you to see slightly different conclusions."
When an advisor tries to supplant a founder's judgment, that's a mistake every time.
#4 Give Your Advisors Permission to Help You
“It’s very easy as an advisor or an investor, especially in the current climate with board meetings, to just show up, spend three hours getting an update, say, ‘keep it up see you next month,’ and leave,” says Barnes. “To be honest, that is increasingly the standard, and founders rarely ask for anything more. It might sound strange, but it's important to give your advisors permission to help you.”
To get the most out of their advising resources, founders need to drive productivity, and that starts by giving people permission to get more engaged and to be challenging. “Especially if you’re a founder who is doing well, you won’t get criticized much, but you need that critical feedback. Success hides all of the potential obstacles and pitfalls that you might not see beneath the surface.”
Advisors are unlikely to intervene unless you explicitly ask them to — and this doesn’t just mean when something is going wrong. You want them to feel like they have your full support to call you out if they need to.
“After you give people permission to do this, you want to set some ground rules around how you want to engage with advisors,” Barnes says. “How do you want conversations to go? Get granular. Do you want them to present their point of view and then have you counter and back-and-forth, or do you want it to be more conversation? Do you want them to bring things up proactively or do you want to just go to them with questions when you need to? Define these relationships clearly.”
In Barnes’ experience, the best relationship is one where the founder is in the role of “creating” situations or decisions, and the advisor is in the role of “editor,” tweaking things slightly where necessary to make sure the company is on the right course.
A lot of founders make the mistake of doubting that their advisors or investors want to be that engaged with their company. For the most part, Barnes says, advisors are hungry for more responsibility, and have a stake in helping a company succeed.
Founders and advisors have one thing in common: Time is their most valuable resource and they are unlikely to waste it.
This means that if an advisor is choosing to spend time with you, they want it to be productive time. “As an investor, if I walk out of a meeting and feel like it was a waste of the entrepreneur’s time, that’s a failure on both of our parts. The desire to make a difference is there.”
#5 Forge a Closer Relationship with Your Advisors Outside of Board Meetings
A lot of entrepreneurs would love to have better, tighter relationships with their investors and advisors but don’t know how to deepen connections that usually start out as fairly superficial. To start, Barnes is a big proponent of founders meeting with their advisors outside the formal context of board meetings. And he has a list of tactics that can make these meetings meaningful:
1) Be as specific as you can about why you want to talk. “A lot of times, people send an email asking an investor if they want to have coffee without being clear what they want to talk about. This is very easy to say no to, or if you get a yes, it may be weeks away because the investor doesn’t know how to prioritize it.”
On the other hand, if you send an email that says, “Hey, I’m really trying to come up with an offer for this position, and I’d really like to talk about it,” or “I was just looking at our dashboards and these three numbers are concerning me,” you’re much more likely to get something on the calendar soon. It’s a good practice to time bound your request too, says Barnes. Tell the person you want to get together in the next week, or the next couple days so they know that an issue is pressing.
Most people will choose to help you if they know what they're getting themselves into.
2) If someone is especially helpful in a meeting, try to serialize it. “If you have a great meeting with one of your advisors, and they make a big impact for you on a certain topic, you need to do two things,” Barnes says. “Remember what they are so good at, so you can rely on them in the future, and try to set up a regular meeting with them so they can help talk you through challenges in this area on an ongoing basis.” This is how you’ll build a strong relationship over time.
3) Go deeper on fewer topics. “If you need to run through a lot of different topics, save that for your next board meeting,” Barnes says. “If you’re in a one-on-one conversation with someone knowledgeable, there’s a lot of opportunity to work through one or two things thoroughly. There’s more rapid back-and-forth and your ideas can change in the span of one conversation. You can solve whole problems this way.”
4) Identify what kind of meeting you’re having. “There are different types of meetings you can have with an advisor — a decision meeting, a discussion meeting or a debate meeting.” Do you want them to help you pull the trigger on a hire? Talk through a plan for scaling over the next quarter? Or debate whether or not it’s time to bring on senior executives? Whatever it is, know ahead of time, and communicate this format and goal to the advisor beforehand.
“If you’re stuck on something, you want a decision meeting,” Barnes says. “Get in touch with the advisor who knows the most about that particular thing and tell them you want to walk out of the meeting with the decision made. Clarify that you’ll be the one making the final call, but they’ll play a critical role in getting there.”
5) Agree on expectations around timing. “Time is often a big disconnect between advisors and founders. Startups operate at a certain speed, and investors and advisors operate much more slowly. They work with a lot of people. They simply don’t maintain that same pace,” says Barnes. “This makes expressing urgency really important.”
In the end, this comes down to setting really clear expectations and holding people accountable. Founders are in charge of managing their advising relationships just like they're in charge of managing their companies. It’s up to them to make sure everyone is on the same page about when answers and actions are needed.
6) Don’t be afraid to give your advisors critical feedback. “You can’t hold back if an investor or advisor fails to deliver on an ask that they agreed to,” says Barnes. “The best way to do this is to state outright: ‘This was disappointing for me because we agreed that this was going to happen, the company was counting on this, and it didn’t happen.’”
At the same time, you should build in some avenues to rectify the situation. “Let’s say an advisor let you down. You should go into that conversation having already created options for reparation,” he says. “Don’t just scold someone. It’s much better to say, ‘Hey, we really needed this last week, but here’s the current status. Based on where we are now, you can help by doing X, Y, or Z tomorrow.’”
If you phrase things like that, you’re much more likely to get a positive response and the help you need. Even more importantly, you reestablish a solid working relationship. If something is broken, make an effort to fix it. Fixing it represents the way you want to work going forward.
#6 Maximize Your Advisors' Super Powers
Entrepreneurs often choose to surround themselves with people who are top minds in their fields. Whether or not they reap the full benefit of this is up to them. People don’t unleash the full force of their expertise automatically. You have to elicit it strategically.
“The way to cherry pick people who will be great in a given area is to be very clear and precise about what you’re looking for,” Barnes says. “Go very narrow when recruiting advisors instead of someone who has broad knowledge.” For example, if you truly need someone with device supply chain experience, don’t go after someone who knows about hardware in general.
“People with specific areas of knowledge usually know about adjacent topics or have other knowledgeable connections in related areas,” he says. Don’t underestimate specialists. This is one area where you shouldn’t be looking for T-shaped people. You should turn that T upside down. “If you choose someone, for instance, who knows everything about design for manufacturing, they probably also understand costing and supply chain. They have hidden breadth.”
One of the biggest mistakes founders make is silo-ing their advisors into very niche topic areas and not understanding their broader knowledge, or the connective tissue they have between their specialty and other areas. They’ll go to one advisor for one thing and to another for something else without realizing they could get more viewpoints in the mix.
In addition to drafting specialists (and appreciating their versatility), the best thing you can do is build your own, personal CRM of advisors, Barnes says. This can be as casual as you need it to be. The important thing is to have a system for capturing personal and professional information about the advisors you work with — with emphasis on tracking what they excel at.
You need to keep people and their skills top of mind so you know who to call immediately when you run into a problem.
“Try to capture this information as it happens. Let’s say you ask a question and one of your investors comes up with a brilliant answer — note that down in your CRM. If you organize all of these topics and questions according to the advisors that handle them best, you’ll eventually be able to run a simple search to see who to call about a marketing issue, or an employee performance problem, etc.”
A third strategy to maximize an advisor’s contributions is to benchmark them, Barnes says. “A founder once asked me: ‘Across all the people you work with, am I getting more help out of you than average or less?’ They were basically assessing the quality of our engagement. When I said they were about average, their next question was, ‘How can I get more?’”
Barnes was really impressed with this tactic, but says it would have been even better if they had set down ground rules for their interactions in the first meeting. He had no idea how much this particular founder wanted to be in touch, but was happy to offer more once he knew.
“Consider starting relationships by stating that your goal as a founder is to get the most out of each advisor, and propose a way you believe you can do that — whether it’s having regular meetings outside the board room, or keeping email threads going. Once you’ve put your idea out there, give each advisor the chance to provide feedback, but the rules of the game should ultimately be yours.”
You don't have time to wait for an advisor to figure out why you need them. You have to tell them what you need and be unabashed about getting it.
This sounds very direct, and even confrontational, but it’s vital when you’re moving at startup speed to determine opportunities and mine them for all their worth. Advisors, especially former entrepreneurs, understand this. To soften this strategy a bit, communicate to everyone that you will be regularly auditing working relationships with each person and that you’re open to change.
“You can tell your advisors, ‘Listen, this is the way I think this should work, so we’re going to try it for a month or two. After that, I’m going to ask you whether I’m getting as much out of you as I could be,” Barnes says. “Above all, remember that they are there because they believe in you and your ideas."
#7 Take Action When an Advising Relationship is Over
When an advising relationship isn’t a great fit, there will always be a debate over what to do about it. “There’s always the tradeoff between the effort to turn the relationship around and the effort to replace it. My bias tends to be toward replacement because people don’t change.”
Barnes’ advice for founders is to try to fix things once if they are not going well, and if it’s still not working it probably won’t. There are of course expectations and contractual agreements with some advisors if they are on your board or if they have equity in your company, but founders shouldn’t shy away from expressing themselves.
“You need to be willing to say, ‘Hey, I can’t count on you for this stuff, so I want to change the way we engage,’” Barnes says. “You can communicate to them that instead of talking to them monthly you’re only going to talk to them quarterly from now on or mostly interact over email.”
What many founders do is simply write off an advisor, minimize correspondence and never really hash out what happened. This isn’t a good approach either because it removes a founder’s power to set expectations and guide the relationship.
Advisors are willing to be much more helpful than most founders think.
“If you can have explicit conversations about what is going well or badly, you end up with a much stronger framework for engaging with an advisor,” says Barnes. “Don’t just start dodging calls. You never know when that person might be the perfect source of information or a solution to a problem.”
Sometimes an advisor seems to have outlived their usefulness — either they have gotten busier in their own lives and less responsive, or the company has moved on to focus on a new area. For example, maybe an early-stage startup was very focused on building its engineering arsenal but now it’s switching gears to more marketing and sales.
“When this happens, anticipate it by several months and tell the advisor in question what it is you’re doing and why,” says Barnes. “Use that to explain that you will probably be less engaged going forward, but that you want to thank them for everything they did. If they're on your board you should feel comfortable saying, ‘We’d love to still have you in the room, but for you to switch from providing actionable advice to just being strategically helpful.’”
The key takeaway is that as a founder you need to be the leader of all of your advisory relationships. Even if these people are more knowledgeable in certain areas, there shouldn’t be a student-teacher dynamic.
“You’re not just showing up and sitting in class with your startup’s advisors,” Barnes says. “This needs to be 100% self-directed learning. Manage that relationship. Own it. Your advisors’ job is to deliver their best to you, but your job is to drive things so you get the most out of them.”