Through case studies and experiential courses in business school, I learned quickly that teams are an essential tool to succeed in the business world. This not only includes your management team but also your board of directors and board of advisors.
Uber's most recent issues prove how important it is for entrepreneurs to surround themselves with strong advisors who can provide guidance on how to navigate startup growth. Uber has been a bright star in the venture capital ecosystem from a business and valuation perspective, but we've all seen its recent issues with employee misconduct, intellectual property lawsuits, and a deteriorating, toxic culture.
With last week's resignation of Uber's former CEO, Travis Kalanick, the once-"darling" of the startup world is desperately searching for the next chapter in their future. It's a great time for all of us to revisit the essential questions to consider when building a board of advisors and a strong foundation for the future.
Here are the four questions you need to ask when assembling that board:
1. What are your team's blind spots?
Your founding team has driven your company's success to this point due to your competitive advantage, technical expertise, and industry experience. No startup team is the equivalent to the Golden State Warriors, so you may have some gaps in your collective skill set that if filled, can help your startup reach the next growth milestone.
Take time to think about what domain expertise and strategic partnerships you need to help drive your search for a diverse group of board of directors and advisor candidates.
2. Where do you need support the most?
Being a startup founder or CEO can be a very lonely position. However, great entrepreneurs are typically very self-aware and introspective. I challenge you to think about where you have struggled the most while building your company.
Are your challenges due to lack of management experience or due to the lack of domain knowledge? Regardless of what type of guidance you are looking for, you should seek out individuals who have had success in that specific industry, company stage, or region.
3. What are your expectations for your board?
Before you identify any candidates or offer a position, determine what your expectations are for your board of advisors. Many advisors receive some compensation in equity ownership (typically ranging from 0.25 percent to 1.25 percent on a four-year vesting period).
If you are giving up a portion of equity ownership of your company, be certain that each director or advisor has a clear understanding of how they can contribute to the success of the company. This could be ensuring the securing of large contracts or guidance with development of a specific product or service.
Make sure you understand what each of your advisors has to offer for your company.
4. What is your vision for the company?
Growth is great, but without a strong foundation of culture, values, and internal collaboration, the company will eventually fall on its face. Whenever you bring an advisor or board member into your startup family, you should think about how is this person contributing to the vision you have for the company.
Will they enhance the vision positively or address missteps from the past? It is important to consistently evaluate where you are driving your company and who is riding along with you. Can this advisor help you navigate through this uncharted path or will they sit and simply let you make wrong turn after wrong turn?
The story of Uber isn't over yet, but the last couple of months have shown how it is so important for founders to consider what type of advisors they bring into their organization. It's proof that the blemishes you don't address in the early stages can turn into glaring warts at the growth stage, which eventually need to be removed. It's much easier to address those issues earlier.