The board is there to help overcome the inevitable obstacles
Venture Investor, VenRock Partner, Waterfall Evangelist
It is about transparency and meeting the issues head on.
Make sure that Sales does not consume all your BoD time.
Board meetings change over time.
Lesson: BoD Management with Brian Ascher
Step #5 Topics: The board is there to help overcome the inevitable obstacles
I think often times first-time entrepreneurs with their first investor board have a tough time calibrating on what issues can I bring to them. And they may seek the advice of advisers feeling like, oh that's a tough one, I don't want to go straight to my board members. And ultimately for me that's a situation. I'd like to have the trust from day one with my entrepreneurs and that trust has been built over diligence and investment, you know, a closing process.
But it's understandable if they want to seek a little advice for some hairy topic that they are a little scared about. Hopefully the adviser they seek is going to recognize that ultimately it's about transparency and hitting the challenges head on and can advise them how to bring it to the board in as transparent a way as possible and tell them what to expect the board to respond with, hopefully in a constructive fashion.
But the notion that I need to package it or spin it or hide it is a dangerous one and leads a lack of trust. A healthy board can handle any challenge because that is what they're there to do is help overcome the inevitable obstacles. Hopefully entrepreneurs develop the confidence that there is really no challenge that they shouldn't bring to the board and they get a good sense of the strategic issues and reporting issues and all that.
But ultimately it comes down to attitude. I have literally had the same company have a CEO turnover issue where the prior CEO had kind of a tense, sub-optimal relationship with the board where it felt like there was always defensiveness and a sense of no one is having fun here in this board room. The same company with a new CEO who was very experienced, boom. All of the sudden the same board members are having a great time, adding value, the management team is more relaxed, the CEO is happy as can be and ultimately performance follows that kind of curve.
But there was really only a change in attitude, which happened to correspond to a change in person in this case. But I think you can change your attitude just by accepting that you're all there for the same common goal and it's not about any one individual. It's not about an investor, it shouldn't be about a CEO and their personal agenda, it should be about the company.
Examples of a really meaty topics that you definitely want to cover are what's happening in terms of key customers, if there are customer satisfaction issues, if you're struggling in a particular phase of the go to market funnel, if you're generating a bunch of leads but they're not converting or if you're signing contracts and it takes a long time to deployment, or in a consumer model if you have a bunch of turn, or you have issues with sustaining engagement, but the real fundamental problems of a company are the things that are going to matter.
As well as some of the detail things that maybe don't feel strategic, their tactical, but they're really important. We got sued by a disgruntled employee or we need more office space and we need to figure out how long a lease and how big a space and how much we're going to spend on this sort of thing. Expense control is important but you don't need to be in the weeds. Nobody needs to look over your shoulder about how you're spending on office supplies or food for the employees. But as it bubbles up, when it comes to important headcount burn-rate issues, that is strategic, that is important to discuss.
Ideally, you want to have a nice blend of the things you need to cover every time and the strategic topics. And some of the times, the strategic topics present themselves unexpectedly, something has just changed we need to cover, or sometimes it's a natural cadence, whether it's the annual plan or the product road map or the hiring plan that needs to come at a certain time of the year.
There is one topic which is right on the bubble. You need a little bit of it most meetings, but it can go too far and that's sales. Sometimes the sales section can go account by account in excruciating detail and you really lose the forest for the trees.
And all of a sudden, you look back over the course of a year, and you realize you've spent a ton of time going through pipelines, etc., and you've lost sight of the product and how it's being used and where else the market is going. So I like to try and make sure that you don't spend more than 20, 30 minutes on sales and that you provide lots of feedback in both directions to make sure it's really productive, well-used time.
I think you need a healthy mix. You need to have some good reporting. Standard topics would be financials, sales, you need to know about new hires, not in any great detail but key hires of course, and then the total. Then you really need to know the current challenges and then as much as possible look towards the future, the solutions to the challenges and strategy. Where are we heading over the next year to couple years? What are the long lead time investments the company needs to make to get to the ultimate goal?
I think that board meetings change over time. The composition of a series A stage company board meeting from a mid stage to late stage are totally different. I think an ideal early stage board meeting is really centered around the early stage issues of finding product market fit. So it's going to be a lot about the road map, the early beta customers, what you're hearing from those initial customers or users. Maybe in the finances, it's really just going to be about expenses and how you're setting the burn rate and then key hires.
Mid-stage you've got some product market fit. You're starting to develop a business model and go to market. There's going to be a lot more about sales, and pricing, and partnerships.
And then later stage where you kind of have a bunch of those things licked, you can get more into a standard routine of you've got finances to report on, revenue side as well as expense side. You've definitely want to get into a cadence of the scaled-up side of selling. How are we doing against plan? How many of the reps are making quota? How many reps are we hiring in what geographies or in the business units?
Then you might get to a point where you're starting to plan out strategic topics either as they come up or certain topics take on an annual cadence. There's always going to be the annual financial plan typically towards the end of the year. That needs to be front loaded by more of the strategic plan. Where are we heading? Maybe the product plan happens early. There's usually a well worthwhile session on competition. All these things can get mapped out against the four to six board meetings you might have in a year.