This post was originally published on Thoughts on Tech Startups and Venture Capital
I am a fan of having a formal board right after the company raises seed financing.
I’ve seen how helpful the boards are and how often founders are lost and disadvantaged without the board.
To put it simply, a good early stage board helps the CEO identify key future milestones, and helps achieve them.
For 99% of early stage startups profitability isn’t possible, so the company needs to raise another round of financing. To get this follow on capital, the company needs to achieve key milestones and prove hypotheses around product market fit, revenue, customers, users and growth.
A good board helps the CEO by focusing on achieving these milestones. However, in order for the board to be helpful, the CEO needs to run an effective board meeting.
How Not to Run Your Board Meeting
Before we dive into how to better structure board meetings, let’s discuss what not to do.
1. Spending the entire meeting giving the board an update and going through the slides is the not a great use of boards’ time.
Why? Because this leads to focusing on details, nit picking and loss of the big picture.
2. Going through the updates slide by slide makes board members not review materials in advance and not think through their questions.
This format leaves no time for strategic conversations and doesn’t leverage the strength and experience of each board member. The format feels adversarial and creates an odd dynamic, because questions keep coming and CEO is seemingly constantly on the defense.
In short, this format is ineffective.
How to Run Your Board Meeting
A better format shifts the focus of the meeting from reviewing slides to a strategy discussion around just a handful of key topics.
In addition, effective board meetings have clear structure, an agenda and allow the CEO to keep everyone on track (and actually accomplish things). Here is an example of a two hour board meeting:
- Circulate materials and agenda three days in advance
- Materials review: 15 mins
- Q&A on the deck: 15 mins
- Strategic topic one: 30 mins
- Strategic topic two: 30 mins
- Budget deviations review: 10 mins
- HR/Open hires: 10 mins
- Board minutes/Wrap up & next steps: 10 mins
Send the materials in advance and also give the board 15 minutes to review the materials in the meeting. This is the strategy that Jeff Bezos uses in his executive meetings. Start the meeting by reviewing the materials. This budgets the review time into the meeting and gets everyone on the same page.
Have people ask clarifying questions about the materials. Keep the answers and discussion short. Most questions will likely be focused on KPIs and financials. You will have more time to address financials towards the end of the meeting. Table longer questions for later, follow up as necessary.
The next two segments are the most important ones — key strategic topics you as a CEO need help with. You have an open forum to engage the board and lean on their experience. Questions can range from go to market strategy, sales, competition, next financing, to company culture and hiring.
Whatever it is, the topic is part of the agenda and CEO engages the board deeply around it. This sort of focused discussion feels productive, helpful to the CEO and satisfying to board members.
Next, briefly review financials. Frame the review in terms of deviations/what is not on track. Don’t make the review too open ended, or it is going to take too long. Remind the board of what projections were and how you are doing against your projections. Explain why you are behind or ahead of the plan, particularly around the burn. Ask for feedback and create follow up as necessary.
Next, talk about open hires. Every company, no matter how early, is always focused on hires – whether it is engineers, marketing folks or any other role, it is important to create ongoing dialog with the board about hiring. Boards can be helpful, particularly when it comes to more senior hires, because the directors have experience and the network that CEOs can tap into.
Wrap up the meeting with a quick summary of takeaways and next steps. Make it clear who owns what items.
This structure should generally work for everyone, but tweak as makes sense for your company.
For example, if you feel like you aren’t getting enough time on finance or HR, you can make them strategic topics. In any case, don’t discuss too many topics per meeting as it will make the board unfocused, and the board members won’t be able to help.
Part of the art of being the CEO is to pick the right focus for each board meeting.
Try a structure like this for your board meeting, get feedback from the board on what is working and what doesn’t and keep iterating until you get to a productive and helpful format that works for you.
Have you ever watched intense video gamers? Their eyes are glazed and they are intently focusing on the screen. They are gripping the controller with both hands, thumbing the buttons and advancing to the next stage of the game.
Did you play video games as a child? How about as an adult? Starting a company is like playing a video game. You have an end goal – whether it be rescuing a princess, overthrowing the bad guy, collecting the crown jewels, or creating a sustainable business. You will definitely encounter obstacles getting to your end goals. Along the way, you may have small wins, but they are all on the way to the grand prize.
You also also have a controller in this video game. As a founder, you use the buttons to maneuver your way though challenges. The important buttons at your disposal are:
- Offense and Defense – Use these as often as possible.
- Competitive Attack – This can be used in conjunction with offense and defense.
- Pivot – This button is used more often than you think, but after using it too much, it becomes inactive.
- Hire – Use this button sparingly, but wisely. It can backfire if you are too aggressive with this button.
- Plans A, B, C, and D – If you have really taken a wrong turn, you can use the different plans to set your path straight.
- Launch – This is the button you use when you are finishing one stage of the game and moving to the next.
It’s not about having these buttons though. It is about how many times you have used them before, the order you use them, how fast you use them, and when you use them and how you use them. Some buttons may have additional functionality if you use them in combination with each other. All of these factors together will catapult you to success.
What are the buttons on your controller? Let us know in the comments below.
This was originally created by Kriti Vichare for #entrepreneurfail: Startup Success
In the first month of starting a business, the most important task is to validate your customer problems and find a paying customer.
For the wantrepreneur, however, the first task is usually something more fun like, logo design. What’s in a logo? Some entrepreneurs have carefully selected their logos, and some have just used simple clip art. Others carefully craft their brand strategy before the logo, and some just choose their favorite colors. And yet others claim their logo is the reason for their business success.
As a new entrepreneur, it is best to find a very simple logo design, as it may change as your product evolves. Some of our favorite logo tips can be found here. 99designs and fiverr are fast and inexpensive ways to get a logo created so you can focus on the most important parts of the business.
What is the vision for your organization?
In any business, the key stakeholders are always trying to anticipate the key decisions and turns. But, who is it that really influences and decides the overarching next steps?
In a large organization, you’ve got your CEO / President / Managing Dictator (misspelling intended) that sets the strategy for the organization – the long term growth plan, the key priorities, the budgets.
And in your own venture, your strategy is constantly adapted. You may attempt to set your own strategy based on your vision and experience. However, as you start, it seems like every new customer sets your strategy, your vision and influences your day-to-day activities! As the key decision maker in your own organization, you soon realize that the influencers pulling you in different directions are your existing customers and potential leads. The best way to focus on a strategy is to develop key relationships and understand what drives your customers and constantly test and validate with the market.
How did you decide your first strategy? Let us know more in the comments below.
(Learn how this cartoon was made! Check out the stroke-by-stroke playback here)
Laugh a little and enjoy the blips on the road to startup success. This comic and post were originally created for #entrepreneurfail: Startup Success.