May 28th, 2021 | By: Wil Schroter | Tags: Strategy
The idea of bringing on a "Superstar Advisor" is usually a total sham.
This isn't because the advisors themselves are a sham (they may be), but more so because our expectations of what these superstar advisors can do are way out of line.
The cost to this notion is giving away valuable equity or creating lob-sided revenue deals without really thinking through what these folks can realistically contribute. It's so easy for Advisors to make bold claims about what's possible, but like the rest of us, it's incredibly hard to back them up consistently.
But again, this normally isn't the fault of the advisors — it's our fault. We lull ourselves into expectations of these heroes that are totally unrealistic, and in many cases, not even what these folks explicitly committed to.
Of course, we're hoping they are going to open their Glengarry-gold Rolodexes (so many 90's references there) and fast-track us to all of the movers and shakers that will 10x our business overnight. Given who they know and the connections they can make, it'd be a crime for us not to get that kind of access!
Except that's not how it really works. There are two big problems with this expectation. The first is that it's as easy as just sending an email and "we're in." It's not that easy. As someone who has built up a contact list of over 10,000 people, I can tell you I'm hyper-protective of that contact list. I'm not going to make an introduction unless I'm 200% convinced it's the right time, and that person actually wants the intro. There’s a lot of social capital cost in making intros, which means any good Rolodex is protected like gold.
This leads to our second challenge — just because we want those intros, doesn't mean those intros want us. I may know 100 top-tier VCs, but that doesn't mean 100 top-tier VCs want to know you. No matter how connected an Advisor is, they cannot magically make their contacts want our product. It's not that simple.
We want to believe that this new advisor is going to be a virtual trip to Dagobah, where we will learn the ways of the force by Yoda and come out a Jedi Master on the other end. But we're missing a few really key components of that mythical training.
First, their advice is only as good as it is relevant to our situation. We're often making a very broken assumption that their advice is still relevant to our industry, our challenges, or our way of approaching the world. Warren Buffet may be a god at investing, but that doesn't mean he also knows how to help me build Startups.com (although Warren, if you're reading, I'd still like some stock advice...)
The second challenge is assuming that once we've obtained a few choice learnings, that there is more after that. Sometimes our best advisors have a few key teachings, and that's actually it. There's no epic geyser of genius that continually sprouts, yet by virtue of handing over our equity, we're essentially paying for that geyser for life.
Our next assumption is that by having this genius on our Board, it will tell the world that we're legit. In our minds. that association will look something like this: "Holy shit, Sara Blakely is on your board? Well damn, shut up and take my money!"
While having some brand names associated with our startups helps, it only helps so much. Yes, it can sometimes be the thing that helps differentiate our pitch or convince someone to lean forward, but that's about where that ends.
No credible investor is going to think "Well, this isn't that good of an idea, but I heard Sara Blakely is involved, so we wrote a check!" Brand names turn heads, but that's about it. 99% of the heavy lifting still gets done by the Founder to make stuff happen, long after that ounce of celeb status greases the skids.
This isn't all to say that "Superstar Advisors" are a bad idea, it's just to point out that the amount of cost we attribute to luring them into our startup is rarely worth what we think we're willing to pay. The sham isn't created by the advisors — it's created by us, the Founders!
How Do I Get People to Take me Seriously? (podcast). Join Wil and Ryan as they take a deep dive into why it takes so much work to be taken seriously as a new Founder and what we can do to thumb the scales in our favor.
How to Manage Expectations with a Growing Team. As our Startup accelerates toward our desired destination, we must let go of the management reins by building specially-designed teams with smaller-than-normal numbers. The result yields less frazzled managers and staff members who are focused on carrying out the tasks at hand.
The Benefits of Emotional Intelligence. Performance is about more than technical expertise — it relies on our ability to relate to people. Leaders who can recognize their own emotions in relation to how they affect their behavior are better able to control their own impulses and handle change.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.