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Board and Advisor Communication: Keeping them in-the-know

6 Jun

I’ve had a couple of people ask me how I manage communication with our board and advisors as well as how I structure the board meetings we have. I figured instead of sending the same email over-and-over I could just do a post and then refer to that. Ha. 🙂

Board v. Advisors

First off, its important to know the difference between someone who is on your board of directors and someone who is on your board of advisors.

The board of directors has fiduciary responsibility for the company. The job of the BOD is to hire, train and fire the CEO. That’s it. And you are reading that right; if you’re the CEO you work for the board and they can (and should) fire you if you screw up. That’s how its supposed to be and its been like that for 400+ years. Like it or not, that’s the way this works. If you’re an entrepreneur/founder and you’re not comfortable with this my advice to you is to get over it. Its actually for the best.

The board of advisors is something you setup to get feedback, raise awareness of your company and generally leverage the “star power” of folks you ask to participate. You usually compensate the advisory board with a small equity stake and list them on your site. At Urban Airship we’ve got 7 advisors ranging from people experienced in operations, engineering, evangelism and product.

Keeping in touch

How do you keep your board and advisors in touch and in-the-know on your business? There are a bunch of ways to do this but my current favorite is Thinkfuse.

Thinkfuse is a tool that allows you to manage communications with teams and I use it for our advisors and the board. Basically you setup a “report” and pick the frequency to file it. I do a weekly report and have been doing it now for the last year-and-a-half and its been great. And yes, you read that correctly. I send out a weekly report and have done it every single week for the last 70 weeks. No exceptions. Even if I’m traveling or taking a Friday off I still send this report out. Its that kind of discipline that makes a huge difference and fortunately Thinkfuse helps with that. It will send you a reminder via email until you fill out the report. That’s the kind of bugging I need.

What I like about Thinkfuse is that the format is pretty easy. I do the following:

  • How do you feel (one word)? – Yep, one word … I have used words like “Delighted”, “Exhausted”, “Jubilant” and “Angry” to describe how I’m feeling.
  • Progress / feeling good about… – This will be several paragraphs and covers the good and the bad around the business.
  • Business unit updates – Each week I have my direct reports send me 3 pros and 3 cons about the week … I curate that and share here so people have a view into marketing, sales, corp and engineering.
  • Challenges / working on… – What am I *really* struggling with? This goes here and can be short or long depending on the week.
  • Need help with… – This is where the ask goes. You’d be amazed at how responsive your advisors and board can be if you actually ASK for something. I don’t ask for something every week, only when I need it.

That’s it. Really simple and most reports are only a screen or two in length at most. It should be easy and not a chore for you.

How much should you share? Well that’s up to you but I’m a huge fan of being transparent. I talk about revenue, cash, people problems and just about everything in between. Its not all good either. Too often I see updates coming from CEOs that are far too Polly-Annish; running a business is hard and there will be challenges and you should feel comfortable sharing those. Bad things happen to every business and its your job to make sure that people are in the know and more importantly what you’re doing to fix it.

In terms of distribution I have about 30 people on the list that I share with. This is the BOD and the advisors as well as people close to the company such as shareholders or outside investors. For example, folks that became part of Urban Airship from the SimpleGeo acquisition are on this distribution list. I send out this version to everybody and then I have one with all of this content plus a few board-only bullets that I send out as well. This might be covering things like the status of fundraising, serious people issues and any M&A activity. Again, Thinkfuse is great at handling the distribution and discussion around these updates.

What I love about doing this on a weekly basis is that everybody associated with the company is ALWAYS in the know. When I run into a board member or advisor I don’t have to bring them up to speed. They know exactly what’s going on and I can dive into questions or issues that I’m struggling with. It also keeps your business top-of-mind with those people. Odds are your company isn’t the only one they are invested in or advising. If they get a regular reminder they are more like to be thinking and/or talking about you. That’s the kind of value you want from your board and advisors.

One other approach that I’ve seen that is quite effective is to have a “Friend-of-your-company” email list. This is a bit broader and its a great place to put analysts, potential investors and other people interested in the business. You can send out a quarterly update and its obviously going to have a positive spin to it.

Board Meetings

We do (about) quarterly board meetings at Urban Airship. These are usually in Portland (our HQ) but we also do one once a year in Boulder, CO (Our series B lead Foundry Group is based there and put that as the most awesome item ever in a term sheet – once-a-year BOD meetings in Boulder … obviously we do this when the weather is phenomenal). The one thing I do know is there should NEVER be any surprises at a board meeting. If you have bad news to deliver you will have done it ahead of time with the board. If there is a surprise at the board meeting then personally I think you’re doing it wrong.

The agenda I use is simple and has a few variations and while I used to drive this meeting I now have my CFO prepare the materials in close coordination with me:

  • Resolutions – approve options, signing authority, etc.
  • Overall Progress – this is a set of slides that talks about highlights, metrics and KPIs that are important to the business … same format every time.
  • Past Quarter review, Current/Next Quarter Plan – Self-explanatory.
  • Updates from business units – this varies and I don’t do it for every unit every time. This is a chance to get your exec team or other people in front of the board talking about specific areas of the business.
  • Private board session – This is in two parts. One with just the board (no observers, CFO, etc) in the room and then another with the CEO (me) out of the room. The board can discuss any issues as well as talk about the CEO candidly and then give me that feedback when I come back into the room. I don’t care who you are or the status of your business those 10 minutes you’re out of the room are nerve racking. Ha. 🙂

I’ve sanitized one of my board decks so you can review here. Again, this should be something that is pretty easy and its good to keep the format the same so the board knows what to expect.

Conclusion

Getting the most out of your board and advisors is critical to the success of your company. Hopefully these tips/tricks are helpful but I’d love to know how you communicate with your board and advisors. We’re always learning … 🙂

How much money do you *really* need to start your company?

23 Sep

I keep hearing startup entrepreneurs tell me “We need funding. If we just had $XXXk of investment, we’d be killing it right now.” I press them with one question: what would you do with the money if you had it? Inevitably the question is met with a blank stare. Most of the time people haven’t thought about it. The answers that do come feel a little half-baked:

  • “Buy a bunch of ad words to get people to our site – that’s all we need”
  • “Build the product”
  • “Finish the product”
  • “Hire a bunch of sales guys”

Sure you have an idea and investment is flowing right now. Unfortunately, your idea is totally worthless. I repeat: your idea is totally worthless. If you can turn your idea into a product that people want to pay for, that’s a different story.

Having started my last two business with my own money or debt I’ve learned one thing:

Bootstrapping is the only way to build your business.

Bootstrapping means you REALLY have to want it. Quit your job and use your own money to start a business? You have to be insane. It’s why only crazy people start companies. Yes, I’m a little crazy; my closest friends know this well.

While Urban Airship may have raised a few rounds of funding, we bootstrapped the business for the first 9 months. Adam, Michael, Steven and I got together in May 2009 and had a minimum viable product (MVP) in the market just 30 days later. I used some of my savings, took out a few no interest credit cards to buy laptops and the rest of the guys took little or no pay. We had to scrap for every single thing we need to build the business.

The first version of the Urban Airship platform was really simple. We had a rudimentary SDK, a working, well-thought-out API and documentation. Lots of great documentation that we iterated on constantly. We also had what was quite possibly the simplest website in the world. However, we had product that worked and was (relatively) easy to use and we were hyper responsive to users of our platform. It was this formula the ultimately led to our growth and early success.

9 months later we had revenue that was well into the 5 figures a month and we had a clear roadmap of features (even if it was just scrawled on the whiteboard) for the platform that people wanted to buy. How did we know? They were already paying us and told us what they wanted. When we raised our first round of funding in January 2010 we knew exactly what we’d do with the money to grow the product and build the business.

An interesting side effect of all of this is that its led to setting a tone for the company. When we build product at Urban Airship we ask ourselves if it 1) helps drive and understand engagement or 2) helps monetize mobile apps. If we can answer yes to either of those questions, its something we should be working on. Is it cool technically but irrelevant to 1) and 2)? We won’t do it.

Looking back a couple of years ago when I started Bac’n with Jason Glaspey and Michael Richardson, we did a lot of the same things. How can we get to market quickly? Took about 21 days. What features can we add to the site that will get people buying more product? Help them share their love of bacon? Again, it was a bootstrapped business so we had to be capital and time efficient failing quickly and iterating even faster.

My advice to entrepreneurs is simple; burn the ships, bootstrap your business to an MVP, tweak until you find a formula people will pay for and THEN go fundraise. It’ll be a lot easier than you think when you have traction, revenue and a clear path. While it might not be the right path, it will show potential investors you know how to find-your-way through the toughest situations and build a product people want to pay for.

Burn the ships

19 Aug

One of my all-time favorite movies is “The Hunt for Red October”. There’s something about Sean Connery as a Russian talking with an English Scottish accent. One of my favorite lines from the movie:

“When he reached the New World, Cortés burned his ships. As a result, his men were well motivated.”

Over the last couple of months I’ve had several meetings with aspiring entrepreneurs that are thinking about making the leap and starting something on their own. They come from all walks; agencies, stable jobs at big tech companies, young, old, men and women. Just about every instance they tell me about how they are trying to ween themselves off a client to become a “product company”. IMHO, making the transition from an agency or services business to a product one is hard enough as it is.

You have to burn your ships.

When we started Urban Airship pretty much all 4 of us were jobless. The company we had worked for had run out of money and so we were faced with unemployment or consulting. I had an interim gig for a local advocacy group but the reality we were all on a short timeline. Panic started to set in and I know all 4 of us thought hard about doing consulting as a cushion so we could start the business while still pre-revenue. I firmly believe that Urban Airship would never have had a chance if we’d gone down that path.

Michael, Adam, Steven and I made the conscience choice to go hard at building a business. Technically we didn’t burn our ships but the fact is, we had no cushion. Failure was not (and is not) an option. At the time I thought to myself, what’s the worst that can happen? I’m not going to be homeless. I’m not going to go hungry. I can always find a job in the tech world. That’s even more true today.

Spin down your clients quickly. Ween yourself off the services income and focus 1000% on your product and getting it to market as quickly as possible. Stop trying to “work a deal” that will give you a couple more hours during the day to build your business. The absolute worst thing that will happen is that you will fail.

Be like Cortés; burn your ships.