May 22nd, 2019 | By: Wil Schroter
There's a ton of risk in taking startup advice from "advisors".
It's not that the advisors themselves are bad people — they tend to be very well-intentioned folks. It's that most advice tends to be dispensed out of context, with very little digging on behalf of the advisor, and delivered in a way to assume what they have suggested is the gospel.
It's time to stop simply taking startup advice, and instead start calibrating whether the advice we're getting is even relevant to begin with. Because more often than not, the advice we're getting from our trusted advisors is just flat out wrong.
And what’s worse? We don’t even think to question it.
The likelihood of finding advice that is absolutely aligned with our situation is, well, pretty unlikely. Unless the person giving advice was previously doing our job, at our company, with our product, and somewhat recently, it stands to reason that the advice we're about to get is out of context.
And that's a dangerous place to be.
For example, let's say I'm your advisor and I suggest you should spend the bulk of your capital on Facebook marketing. I might explain that it's how I grew my business quickly, and therefore you should do the same. By default, I'm 100% right about how it worked for my business. But that doesn't necessarily mean it applies to yours.
Here are all the ways this falls apart quickly:
At first glance, you may think my advice is great. But it isn't until you start unpacking all the subtle nuances in a context that separated my business and moment in time from yours. Now all of a sudden my advice seems pretty off the mark.
And frankly, it usually is.
For every piece of advice, we have to constantly calibrate the source of the advice with our own present situation and decide if any of the advice we’re getting should even be considered.
No advice should be considered absolute.
There's something incredibly empowering as an advisor to say "You must do this! I hath decreed it!" — then watch your humble Founder servant do your bidding. But once again, that's just the sign of a shitty advisor.
A good advisor will lead with a few consistent caveats:
It's not the advisor's job to direct a Founder like an employee. A good advisor, one with a bit of rightful humility, will recognize that everyone's path is a bit different and that it’s their job to simply empower the Founder with more options to choose from.
The moment an advisor feels compelled to force their will upon you, or gets offended that you don't simply take orders accordingly, it's a sign that you're dealing with a bad advisor.
The only way to give good advice is to ask lots of questions.
A good advisor is like a doctor trying to diagnose as many potential symptoms as possible (re: asking good questions) before arriving at a prognosis. Most advisors, unfortunately, don't do this, out of either laziness, lack of sincere interest, or pure ego — and sometimes all of the above!
If once again you've called me in as your advisor and explained your business to me, and within 5 minutes I'm already telling you how you should run the company — you should run for the hills. If I were your doctor, and you came to me with a cough, and within 5 minutes I told you that you've got terminal cancer, you shouldn't seek therapy, you should seek a better doctor!
It's absolutely fair and responsible to suggest to an advisor that there are probably some additional questions they may want to ask, or volunteer more context whenever you're seeking advice. If they don't have any interest in digging in, it's a sure sign that they aren't ready to give complete, targeted advice.
As a side note, investors are notoriously bad about this.
They have a nasty habit of looking at a business in an industry they’re totally unfamiliar with and dispensing absolute outcomes as if they were Nostradamus. If they aren't asking good questions, they aren't delivering good advice — no matter how big their checkbook is!
Our job as Founders isn't to seek advice that we can simply apply unfiltered. That's irresponsible. Our job is to seek as many data points as possible and then unpack those data points so that we can compare them.
We need to question every bit of advice and we also need to question the source. We need to be sure that whom we're seeking advice from is exactly the right fit for the problem we’re trying to solve, and weight that advice accordingly.
The onus is on us to constantly ask "How qualified is this advice?" We need to overlook whether the person dispensing it has amazing credentials and ask ourselves whether they seem to have done a solid investigation on our business. If not, we need to factor that into the quality and reliability of the advice.
The only way to truly take great advice is to question all of our advice thoroughly. It's not our job to take orders from advisors, it's our job to learn from them and determine our own marching orders.
That's why, you know, we're the Founders.
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.
Naturally this opinion excludes "owners" that hire you as the subject matter expert, then somewhere along the way decide you should become an "extra pair of hands" that will do all the extra work to implement. Consultants (advisors) and owners are often guilty of mis managing the relationship. Always easy to blame the advisor, and just as easy to blame the business owner. Neither approach is productive.
An excellent article. To begin with, Wil uses a word seldom heard on the venture circuit: humility. A wonderful metric to use in assessing the worth of advice is whether or not the advisor shows even some modicum of humility; if not, then they might just fit in the arrogant asshole category and should be largely ignored. Lest you think I'm some new-age touchy-feely type that thinks timidity is cool, let me just say I spent 25 years as a career army officer - I get the tough guy thing. But even in the military we greatly respect the importance of humility - it tends to help keep guys alive. The most insightful observation in this article is the emphasis on context. This is indeed where most advisors drift way off the path; they simply don't want to do the homework required to offer contextually correct advise, but rather to simply present some tenuous analogies to their own experiences with the sweeping (and specious) assumptions that surely this advice must apply to the current set of circumstances. Advisors (e.g. investors, board members) typically don't want to do their homework because they are either semi-retired or completely retired, and really don't like work (and who can blame them). But, it doesn't change the fact that understanding the nuances of a business requires very serious hard work; and without that research and study, phrases like "I strongly advise you to do ___" should be dismissed as devoid of any factual backing. I would also point out that in this "game" it is the nuances that matter; if the founder can't get the big picture items right, then the company is going to fail no matter what. So, the only advise that is germane is that which addresses nuances. Again, almost be definition this surely implies the need to do very, very exhaustive research and study before offering advice. Again, the kinds of advisors we are talking about are typically out enjoying life -- heck they earned it. But they shouldn't be spouting off directives unless they are willing to put in the time and energy to get it right.
Wil, I usually don't read many blogs but our partner Archel has passed on your email to me and I felt I had to reply to you. First, I think we should not mix "mentors" with "advisors". There are two totally different ecosystems. Second, usually (not always) advisors have "skin in the game" when it comes to dispensing advice. Thus their suggestions, recommendations and "herding" must be at the least "good" in order to benefit not only the startup but also the advisor. Mentors on the other hand, well that's a totally different universe since they do not have skin in the game. Third, if founders are not smart enough to properly vet and select the best advisory match for their needs (to fill the gaps of their startup team, model and process), well, it's their fault. (Maybe we should have a college class about how to vet and select the best advisors for your needs?) Forth, we always recommend founders and entrepreneurs to make sure to select the best possible advisory match to fit the gaps their business model have. Plus we urge them to seek advisors from the trenches that have "real" business acumen in their field (The ones that have operated real businesses and not the ones that sat behind desks pushing pencils and managing other people!) And finally, what research data do you have to be able to freely state: "...Because more often than not, the advice we're getting from our trusted advisors is just flat out wrong..." That is pretty profound and you need to stand behind such a statement with facts, figures, data and research, especially when you are addressing millions of founders as an "expert". You may be doing a disservice to the new generations... From what we can tell (delivered to us by founders that suffered the wrath of the business gospel incubators, accelerators and business gurus!) the more criminal culprits in the advisory world are the "academic" advisory ecosystem gurus (University incubators and technopark academics) that dispense 20th century "regurgitated info-packs and templates" instead of coming to terms with 21st century solutions. These are my personal opinions and do not reflect the views and principles of Startup Port or any other institutions I am involved with (as an advisor!) HT
eminently sensible comments here. excellent article. I have spent part of my career as a consultant / advisor and rarely did i feel that clients were as demanding, or questioning, as they should be. And the higher up the golden rainbow you went -- to the McKinsey's and Bains of this world -the less they would challenge - they all listened like nodding donkeys .. well If McK says it is - it must be. I am reminded of that excellent book - "Dangerous Company" and how consultants completely destroyed viable businesses. In fact, one of my colleagues "turned gamekeeper" and made a good living being the consultant baiter and interrogator - making sure they delivered relevant advice. Companies get the advisors and advise they deserve to have ... if it is wrong, dont always blame the advisor. Do your work - set the parameters, check the advisors underlying assumptions and experience. Bill Lewis, follow me at thisisbilllewis.com