(7 minute read / 43 minutes front to back)
Most teams need help with execution, not “strategy”.
The reason is that fast growing organizations quickly outpace even the most seasoned technologists, and CEOs can’t provide the guidance that technologists need when they lack experience with the current stage and scale of the business.
This means advisors must be able to get hand-on when needed.
Use the sample job description below to find the help you need:
The most important thing to remember when developing software is that you need to focus on solving problems that your users actually need solved. Otherwise, you are wasting your time and money building things that no one will ever use.
Key Concept – If You Only Have One Advisor,
That Advisor Must Understand Product Design
This requirement confuses most non-technical leaders.
“Founders are supposed to be the visionary behind the product, and Technical Advisors are supposed to be code wizards – right”?
As a founder you might have the vision, but you can not execute the cheapest product possible without help; whether you consider yourself a “product focused founder” or not. Becoming an expert in solving the right problems requires years of training, exposure to multiple markets, and a deep understanding of technology.
When bringing a product to market, look for people with experience bringing products to market. Likewise, when scaling an established product, look for people with experience scaling established products.
Ask candidates what makes them great at designing products. You’re looking for broad experience in multiple disciplines (marketing, finance, etc.), as well as specific training in designing effective user experiences.
Ideally, candidates should also be able to architect complex software and build effective technical teams, but these are secondary concerns. Remember you can always hire more than one advisor to find all the skillsets you need.
Not many people who experienced with product design are currently focused on working as advisors, especially for early stage teams. This means you will probably have to train a C-level officer that is working somewhere else to become an effective advisor for you.
Key Concept – Look For CPOs, Not CTOs,
When Looking To Cultivate Your First Advisor
Try searching LinkedIn and your local community for CTO/CPO, CTPO, “Technology and Product Officer”, “technically focused CPO” and “product focused CTO”.
And ask them to read this guide to help them understand your expectations.
Investors will tell you that they don’t care who your advisors are, and they’d be right.
Don’t waste your time looking for people with notable brand experience or successful exits unless you are running a large company. These accomplishments usually correlate with “too busy to pay attention” and “out of touch with the challenges small teams face”.
Key Concept – You Want Practical Executors With Recent
Experience Working At Your Current Stage And Scale
Fill your advisory board with prominent figures that expand your network while practical executors assist your team in a hands-on capacity.
It’s extremely unlikely that you’ll find anyone truly experienced who is willing to get hands-on in return for equity alone.
Key Concept – Expect Equity-Based Technical Advisors To
Ask Great Questions, Not Provide Hands-On Guidance
It’s quite possible that you will find a capable technologist to help you casually or infrequently, but experienced technologists are in high demand and this means you’ll struggle to motivate equity-based advisors to pay attention.
Additionally, you’ll probably end up working with someone who doesn’t have all the skillsets required to handle everything you need because beggars can’t be choosy.
At the very least, paid advisors will be motivated to create value in order to continue working with you while unpaid advisors will have the exact opposite motivation.
You’ll probably need to hire someone to fill in the gaps with cash, or cash plus equity… which brings up an important point.
The truth is you can’t completely trust paid advisors. But, then again, you can’t completely trust equity-based advisors either.
Advisors always have something to gain from their recommendations in addition to the compensation you provide them directly. Sometimes they earn referral fees from the people they introduce you to, other times they benefit from representing themselves as your advisor in order to further their own career or leverage some other kind of relationship.
Remember that there are an infinite number of ways that both equity-based and cash-based advisors benefit from a relationship with you.
Key Concept – Even I Stand To Gain From
My Own Recommendations
The bottom line is that it’s unreasonable to expect anyone on your team to always act in your best interest, see all perspectives, and be experienced in all things – including both paid and unpaid advisors.
Ironically, the fact that you can’t trust your advisors is what makes them so valuable.
It’s nearly impossible to spot conflicts of interest when working with developers, CTOs, and firms, but it’s relatively easy when working with advisors.
Key Concept – You Can’t Manage Technologists,
But You Can Manage Advisors
Why? Because developers, CTOs, and firms all earn a living creating code that you’ll never fully understand while advisors only provide counsel and support which you can easily inspect and verify.
I often help the CEOs find and recruit other people.
Sometimes I refer out to development firms, other times I help teams recruit their own staff, and other times I provide subcontractors. The important part is that in each case I usually earn staffing fees or referral fees in addition to my advisory compensation.
While all this is extremely helpful to my partners, it also creates a conflict of interest because I benefit from recommendations which support those revenue streams.
This is why I recommend that my partners find a friend or another advisor to look over my shoulder when staffing income begins to become substantial. If the conflict of interest grows large enough, I’ll even recuse myself as Technical Advisor and transition to CTO, Coach, or Team Builder and make it very clear where my responsibilities lie.
I do this because I’m connected to a community of CEOs, investors, and influencers. This means I care about protecting my reputation and fulfilling my responsibility to protect the companies in my care, and this means I must go out of my way to disclose conflicts of interest.
Most capable Advisors will behave the same way, while Developers, CTOs, and firms will behave very differently because they don’t have the same type of relationships or responsibilities.
This is the value of working with an advisor. You can manage expectations with Technical Advisors without needing to know much about technology.
A common misconception that founders suffer is believing that paid advisors are too expensive.
This is just silly.
The truth is that you can not afford to not hire an advisor. Advisors help you save far more money than they require – this is their fundamental value proposition.
Remember that you’re better off with an experienced advisor and an inexperienced development partner than a semi-experienced advisor and a semi-experienced development partner.
Use the ubiquitous 80/20 rule as a rough guideline to attract the experienced advisors you need until your technical budget exceeds $500,000/yr.
Plan on allocating at least $2,000 to advisors when you only have $10,000 to build a prototype. Later on, allocate at least $50,000 for advisors when your technical budget exceeds $1,000,000.
You’re probably going to need a hands-on advisor, and you’ll probably need to pay your advisor with cash and equity to keep their attention.
Trust but verify. Hands-on advisors allow you manage an otherwise unmanageable situation because you can easily identify where their conflicts of interests lie.
You really don’t need people with notable brand experience or big exits. That said, experience obviously matters, and recent tactical experience matters most.
Remember that there is no school or organization that accredits advisors, which means you are going to have to train your advisors to help you best. The next chapter will help you do just that.