“Get good advice” is probably one of the most self-evident things you’ll hear when building a startup. Of course you want to get good advice. What on earth would be the alternative?
What’s buried under these simple words, though, is the implication that, left to your own devices, you may not be getting the advice you need. Why would that be?
The largest reason I’ve found is that first-time entrepreneurs often have no idea what advice they actually need. The point of the recommendation to get good advisors isn’t so that you can ask them specific questions – it’s to surround yourself with people who will see the warning signs you didn’t know to look for, and call them out while there’s still time for you to adapt.
So how can you find the people who will be best at this, if you yourself don’t know what to look for?
The best way I’ve found is to look at track records. Where have your potential advisors worked in the past? Is it a similar industry; similar geography; and most importantly, similar stage of venture? What role did they have, and what problems were they exposed to? Etc.
Unfortunately, there’s only so much I can tell you here – the best way for you to find good advisors around you will be to crawl your networks and find the people everyone recognizes as the best. But, at the very least, I can recommend what sorts of unknown unknowns you’ll want great advisors for.
You’ll want to make connections in your industry – whether for sales, partnerships, or simply market research. Advisors can be a great help here, but not just because of the direct connections they can help you make. Even more valuable is the cultural knowledge they can share with you – how to network effectively in your field; who the real decision makers are; and how to approach them to pique their interest and avoid wasting their time.
Beyond simply making the connections, it’s crucial to understand the intricacies of negotiations in your field. A handshake agreement can often be summed up in a few sentences, but a real legal contract might be tens of pages long, covering a wide variety of edge cases you’re unlikely to think of ahead of time. What happens if, for instance, you agree to sell your product to a customer, and then they attempt to resell it to another – is this permissible? What happens if you are selling technology and it does not perform as the other party expected – are you liable for damages in some way? A good lawyer can help you work through many of these concerns, but not only are lawyers expensive, they’re also more focused on your ideal terms – rather than where the acceptable compromises might lie, or how best to persuade the other party to agree to your terms. Someone who’s negotiated those contracts directly as a representative of a business, though, will be able to offer extensive advice in this area.
What’s actually the right way to earn money from your offering? And how can you effectively monitor how much you’re making, and where you need to shore up the economics? It may be possible to conceive of a meaningfully strong business plan on your own (though I’d still recommend getting plenty of advice here), but if you’re a first-time founder you almost certainly don’t realize the complexity of bookkeeping, accounting, and higher-level financial management required to actually understand whether your business plan is surviving contact with reality. A good accountant is a must here, but the COO, CFO, or CEO of another company in a similar space may also be a valuable reference point to understand these kinds of issues.
Fundraising is a complex dance of economics mixed with storytelling, and social politics mixed with financial interests. It’s hard, and the more context you have going in, the better. Find entrepreneurs in your area and space who can not only point you to the right investors to speak with, but can also advise you as to how to explain your vision most effectively.
I’ll gloss over questions of how to develop technology effectively as a business – not that these aren’t fascinating questions, but they’re not the domain I’m most focused on today. A separate concern, though, is that the business often drives tech development in complicated ways – leading to requirements for things like authentication, ability to disable functionality remotely, or unique interfaces designed for customers with atypical setups. In order to keep this functionality tied closely into the rest of your technology, you’ll want to begin building it early, which means you’ll want foresight – something advisors with experience in the industry are the best resource to provide.
As so often is the case, this list isn’t complete, but thankfully, you shouldn’t need it to be. Asking for advice is something like getting puzzle pieces – each advisor provides a different, but often overlapping, piece. When in doubt, keep asking for advice, and eventually you’ll get enough puzzle pieces to begin to see the outlines of what’s missing. You’ll never quite finish the puzzle – after all, your business will keep changing and growing through this whole time – but so long as you continue listening to and considering the advice of those around you, you’ll also be able to continue to cover more ground as you do so.