I am a Venture Partner at Entrepreneur First, an investment programme for technical individuals looking to build a high-growth company from scratch. Prior to this I have worked with two of the fastest growing companies of the last decade; as general manager of Taboola Europe, and as a member of the management team at Groupon, building out the company in the UK and Ireland.
Recently, I’ve started working with Entrepreneur First, thinking about how best to support the teams I work with and I realized that both advice and advisors come in so many shapes and forms.
I thought it is probably worth trying to explain who to use for what and go through the types of advisors you will likely meet along the entrepreneurial journey.
Domain experts are people who know something you don’t.
These people could be ex-executives, current entrepreneurs, sales experts, marketing experts, etc. Usually their value to you diminishes quickly, i.e. you learn a lot from these types of advisors in the first, second, or third meeting, but then you discover they already passed on to you most of their relevant knowledge.
Tips for working with domain experts:
- Seek them out. These people can turbo-boost your efforts, saving you time and money.
- Feel free to end the relationship; it’s okay to meet with someone a few times and then to move on. Entrepreneurship is full of changes, you will have employees, advisors, clients, and suppliers that will be there in the early stages and then leave, it’s OK.
- Not everything domain experts say is true. You are in the business of creating something new. So listen carefully to what they say, but make up your own mind.
These types of advisors are people that can introduce you to other people, whether they be clients, investors, employees, partners or other advisors.
Tips for working with door openers:
- It is very hard to assess their value to you. Some people are just name droppers and some people can actually change your life with one introduction.
- The real value of these types of advisors are when they can introduce you to people you never knew existed, or when they have real influence on the people they are going to introduce you to.
- By and large, a good door opener will just introduce you to people without asking for too much in return.
- Assess their value as you go. Before entering into a long term agreement, let them make some introductions and see if they are useful.
These people can answer one quick question with a short email or a phone call. They won’t coach you like the domain experts, but they can save you in many critical moments. Examples of these types of advisors could be a CEO of a big company in your space, an academic professor or an experienced negotiator.
Tips for working with golden tippers:
- Keep them informed, add them to your monthly investor update, drop them a line whenever something important has happened.
- Each time you reach out to these types of advisors, ask them only one very clear question. Something they can answer in two lines, a yes / no question; most of them are super busy.
- It’s good to make them part of your team, usually through a small amount of options, or equity. Their tips, like their name suggests, could be worth gold.
These people are people you meet on a regular basis: once a week, once a month, once a quarter.
They usually don’t know the answers, but they are there to ask you tough and sometimes even annoying questions, challenge you and help you think through issues. These types of advisors are particularly important because they won’t tell you what to do but they will try to help you understand what you should do.
Tips for working with mentors:
- They can help with strategy, with managing internal conflicts; sometimes they can support you emotionally, and sometimes they help you to focus and to push yourself (especially in the very early stages when you don’t really have a board).
- Like the golden tippers, it’s important to keep them in the loop.
- It’s good to agree some kind of frequency and regularity of meetings, put them in the calendar and try to stick to it.
- These types of advisors are not there to reassure you. They are there to challenge you, to ask you questions and to force you to think. You don’t need to necessarily agree with them. You can argue with them, you can try to convince them, but in the end, go and do whatever you think is right. It is your company.
Advisors don’t have to fall into one exclusive category though; it’s your job to figure out the nature of the relationship together with your advisors.
For example, EF’s venture partners have many characteristics of mentors, but like any other advisor, they could give you more than just one type of advice.
Another example is investors, who can sometimes be your best advisors. They are often smart, experienced, and well-connected, however, you should always remember they are first and foremost your investors.