5 Rules To Follow When Seeking Expert Advice For Your Startup
When building a startup, there’s never a wrong time to ask for advice.
However, part of the challenge of being a first-time entrepreneur is “knowing what you don’t know.” This is why second-time founders are typically much more successful than first-time founders—because the first time you build a company, you are so consumed by the journey that you almost don’t even know what questions to ask, or who to turn to for help. And it’s not until your first startup reaches a point of maturity (or you exit the business) that you typically realize all the things you would do differently the next time around.
That said, this isn’t an issue for every founder. As an angel investor, more and more I find myself interacting with humble first-time founders who make it a point to surround themselves with people smarter and more experienced than them from the get-go.
Regardless of where you are on the journey, you should always strive to cultivate as many informed opinions in your life—and put varying degrees of weight behind them based on the context of the situation.
Here are a few rules I like to live by when seeking out expert advice in my own companies.
1. Find the best subject matter experts and make whatever deals you have to make to get the right people involved.
Each situation is different, but when in doubt, it’s better to give up a little bit of your company (or pay out in cash) to have the right people giving you guidance from the very beginning.
One of the biggest reasons startups fail is because they run out of money. And running out of money is the result of making the wrong decisions. So founders who tighten their belts and avoid giving up cash in the bank or equity in the company for the right person to help them along the way can be a dangerous bet. Obviously you won’t always be able to afford each expert’s rates or expectations for getting involved, but it’s always worth it to try—and to err on the side of giving up a little bit extra so they can help save you time, energy, money, and loads of stress over the long term.
It’s worth it.
2. Keep no strings attached until it proves to be a mutually beneficial partnership.
Building on the above, I prefer to start advising relationships as cash only.
This allows both parties to ensure it’s a good fit.
Taking a no-strings-attached approach is what allows you to avoid getting suckered into situations that might seem good on paper but end up not working out very well (or not providing you as much value as you would have hoped). Whereas with cash, you can see what progress is being made, assess whether this person’s advice is truly making a meaningful impact on your business, and then have the flexibility to either double-down on the relationship or move on if things aren’t working.
Especially in the beginning, first-time founders tend to jump to offer board seats or equity in exchange for someone’s input. This isn’t necessarily wrong but just remember: once they’re on board, you have to live with the decision.
Better to take the relationship for a test drive first.
3. Don’t over-complicate the engagement.
Another mistake I see first-time founders make is they rush into wanting to call anyone and everyone who gets involved at the onset a “cofounder.”
This complicates the situation and brings lots of emotion into what could have been a very straightforward exchange of information.
Instead, it’s much better (and easier) to hire someone to do a specific job or provide specific insight when needed. Or hire a firm to take on a necessary component of the business instead of giving that responsibility to another “cofounder.”
Keep it simple. Find people who can do the job you’re looking for and hire them. See if they can do what they say they can do. If they can, keep working with them, give them more responsibility, and let the relationship unfold from there.
If not, let them go and move on.
4. Don’t just take someone else’s recommendation at face value.
Just because your friend introduces you to someone, doesn’t mean you should take everything that person says as fact.
Do your due diligence.
This is something we ran into with my company, Hydros. We got burned by a product development firm we’d hired early on because I had taken the word of someone who was working with us at the time (an experienced industry operator I trusted). He said, he’d had past experience working with this firm, and so I trusted his recommendation without doing my homework. After several months of the engagement going sour, I then learned he hadn’t actually worked with them—a friend of his had, and he’d taken his friend’s word at face value.
So, don’t rush to conclusions. Take recommendations from those around you, sure, but remember that it’s your responsibility to make the final judgement call.
5. Always stress-test other people’s advice against your own gut.
At the end of the day, it’s your business.
Which means the buck stops with you.
Depending on who you ask for advice, you are going to get very different insight depending on that person’s subjective experiences in business. For example, if you ask a product entrepreneur what he or she thinks, they’re likely going to give you advice through a “product” lens. Whereas if you ask a service entrepreneur what he or she thinks, they’re likely going to give you advice through a “service” lens. And so on.
If anything, it’s valuable to surround yourself with people whose viewpoints and perspectives on business, life, and even the thing you’re building conflict. What you don’t want is to be in a room full of advisors who all tell you exactly the same thing.
That, I can tell you, is rarely advice worth listening to.