Here's something not a lot of entrepreneurs talk about: starting something from nothing creates tons of fear, uncertainty, stress and loneliness.
And the whole time, the startup founder is putting on a good face – strongly assuring everyone around that things are great. Creating something from nothing is an incredible and wonderful feeling, but it doesn't mean your days are filled with just the fun stuff.
I like and use a service called Clarity – where people can simply pay (per minute) to ask me questions. I think it's helpful. I find it rewarding. But trust me when I tell you that it's nothing like really helping a startup grow and succeed.
Because you can't build a company in a twenty-four minute (my average) call. Startups take a long time to grow and build if they're going to succeed. And a call for advice doesn't replace the value of a board of directors.
Wait – I'm bootstrapping!
Most people assume (incorrectly) that a board of directors is only created at the point where you take in investors (during a round of financing). So if you're bootstrapping, the thinking goes, you don't need one. But I disagree.
The point of a board isn't simply to protect the financial interests of its investments. The point of a board is to help you grow your company. They do that by:
- Protecting you from your blind spots
- Giving you alternative perspectives based on experience
- Connecting you with their own networks
Everyone has blind spots
Having lived thru five startups, coached ten times that, and sat on several boards, I can tell you that one of the most common reasons startups struggle (or die) is because they've stepped on their own toes.
They make decisions that could have been avoided if they'd had additional experience or insight – in all areas:
- Splitting equity
So does my startup need a board of directors?
By now, you already know my answer.
Yes. Even if you're bootstrapping.
You should establish a board of directors – not just the founders or your partners. But outside folks, a small team, to help you grow your business.
When you go to select someone for your board, I suggest using the following questions (at least to yourself), to make sure you feel comfortable. I'm specifically talking about the board members you pick yourself. If you're in the middle of a fundraising round and it comes with someone sitting on your board the only advice I'd give you is to make sure you're taking money from an investor that is strategic (not just dumb money).
That said, many of the bootstrapped startups I know aren't in the middle of raising a round. So if that's you, and since I'm suggesting you fashion a board, here are some of the questions I suggest you ask yourself.
- Are they able to provide insight without getting into operational details? (you're not hiring staff)
- Do they have experience with startups? (you're not a fortune 500 company yet)
- Do they understand your market? (you don't want to explain this 200 times)
- Do you connect with them? (they may be some of the only people you share that stress with)
- Do they offer expertise you need? (you want diversity – of thought and experience)
I've just told you that everyone (including you) have blind spots. But there's something else that goes on with every entrepreneur I know. They are great at focus. Laser-like focus.
But that creates it's own issue, doesn't it? Because if you're completely focused on one of two things you feel are mission-critical, then there's a chance that you'll lose perspective.
It's a natural consequence of that amazing focus. And it's one of the things a board is best for – helping you see the bigger context or picture, and alerting you to risks you might have missed.
Blind Spots, Focus, Perspective
What you notice, as I share with you my take on startup boards is that it's all about visuals. Blind spots are what you can't see. Focus limits your perspective – again, what you can't see.
And what you can't see can hurt.
Even if it's coming from inside your own head. Sometimes you're your own worst enemy – because the very traits that are positive in one context are dangerous in another.
And you won't see that without external help.
Which is why I'm a huge fan of startups having boards. And if you want to know more about it, here's a great book about them, one I highly recommend.