Dan Martell - January 30, 2017


Building An Advisory Board For Your Business


Episode Stats


Length

8 minutes

Words per minute

203.27245

Word count

1,673

Sentence count

114

Harmful content

Misogyny

1

sentences flagged

Toxicity

3

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, I talk about how to build a great advisory board for your business and why you should pay for it. If you have ever felt frustrated because it's your first company and you don't know what you should be working on, or when you share your idea, people aren't taking you seriously, or you don t feel like you have the network to actually be successful in building your business, this episode is for you.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Toxicity classifications generated with s-nlp/roberta_toxicity_classifier .
00:00:00.720 How did my eyes look?
00:00:03.440 Beautiful.
00:00:03.960 Yeah, shirt is straight.
00:00:06.240 Yeah, shirt is straight.
00:00:07.360 Dapper.
00:00:08.080 Looking great.
00:00:08.640 All right, collars popped.
00:00:10.240 Collars.
00:00:10.880 All right.
00:00:11.920 iPhone watch is dead.
00:00:22.880 How to build an advisory board for your business.
00:00:25.600 Now, I get asked this question all the time.
00:00:27.960 So here's the deal.
00:00:29.120 If you've ever felt frustrated because it's your first time,
00:00:31.860 you've never built a company before and you really don't know
00:00:33.660 what you should be working on or when you share your idea,
00:00:36.260 people aren't taking you seriously or you don't feel like
00:00:39.660 you have the network to actually be successful in building out
00:00:43.240 your business, what I love about a great advisory board is it
00:00:47.040 allows you to get the answers quick.
00:00:48.680 Like as soon as you have a challenge, you can have the
00:00:50.440 person there ready to answer the questions.
00:00:52.320 It allows other people to see the credibility.
00:00:55.220 If you can convince really great people that they know of to
00:00:57.880 join your team, instant credibility.
00:01:00.140 My favorite part is a built-in network, right, of people.
00:01:05.020 Because if you're trying to hire, you know, lead people,
00:01:07.520 C-level people on your team, having those advisors,
00:01:10.760 part of that is really gonna change the game for you.
00:01:12.520 You know, I've been fortunate enough,
00:01:14.460 I teach a framework called the Dream 100,
00:01:16.300 and part of that is really focusing on the people
00:01:19.160 that are gonna be part of your business, right?
00:01:20.900 If you think that you can climb Mount Everest
00:01:23.280 in your board shorts and sandals with no support, 1.00
00:01:26.680 You're crazy, go get your head checked, 0.99
00:01:28.180 it's not gonna happen. 1.00
00:01:29.220 So an advisory board is just one aspect of this.
00:01:32.120 But, you know, when I was building my company Clarity,
00:01:36.080 that was one of the first things I was,
00:01:37.800 I decided to focus on to build the business,
00:01:40.060 is get a board of advisors,
00:01:41.660 people that have been there before,
00:01:43.020 areas that I felt like I didn't have as much,
00:01:45.060 I wasn't as strong as.
00:01:46.640 I mean, that to me is like,
00:01:47.900 advisors are people that have strengths
00:01:49.600 in areas you're weak at.
00:01:50.700 So, you know, one of my advisors was a guy named Carl Jacob.
00:01:53.740 He actually had built a company back in the late 90s
00:01:56.680 just like Clarity.fm, an expert network for entrepreneurs
00:01:59.920 to get advice over the phone.
00:02:01.860 I had Heaton Shaw, who's one of the top
00:02:03.680 SaaS experts in the world.
00:02:05.120 He built a company called Kissmetrics.
00:02:06.900 He's incredible, definitely follow his blog.
00:02:09.060 Andrew Chen, another guy, he now runs Growth at Uber.
00:02:13.220 He's written over 700 essays on startups and technology.
00:02:17.440 And Mr. Eric Rees, yes, the creator of The Lean Startup.
00:02:21.440 I was super blessed to have these four people
00:02:23.300 as formal advisors.
00:02:24.640 What I wanna share with you guys in this video is how to
00:02:27.580 think about the different aspects of building that team.
00:02:31.640 How do you think about paying them?
00:02:32.880 How do you think about keeping them in touch?
00:02:34.480 Those are the different areas and then what's the value in
00:02:36.780 putting an advisory board together?
00:02:38.680 That's the first, that's what I'm gonna end on.
00:02:40.920 Now, curate is the first C.
00:02:42.700 I want you to write these down.
00:02:44.120 Curate, leave a comment below.
00:02:45.760 Let me know if you have questions.
00:02:47.200 But you wanna curate a great advisory board.
00:02:49.040 So how do you do that?
00:02:50.260 Here's my favorite technique, okay?
00:02:52.060 I'm gonna share one.
00:02:52.860 If you leave a comment below, I might share more.
00:02:54.800 One is go on LinkedIn, search previously worked at
00:02:58.740 and a company that you know the role,
00:03:01.940 so if I was hired, if I needed expertise in sales,
00:03:04.780 I would say, well, who's got the best sales team
00:03:06.480 in the software space?
00:03:07.440 Well, salesforce.com would be a good option.
00:03:10.020 I would search on LinkedIn, previously worked at,
00:03:13.220 salesforce.com, role or title would be VP of sales
00:03:17.020 or director of sales, and it would give me the list
00:03:19.960 of the people that used to do that role at Salesforce.
00:03:22.020 How incredible is that?
00:03:23.300 I've had many entrepreneurs do this
00:03:24.780 and find incredible advisors to join the board
00:03:27.180 because they're not working at that company anymore.
00:03:30.420 They're probably more than willing to take a call
00:03:32.180 to give you advice,
00:03:33.000 and if you build that relation over time,
00:03:34.980 then you can get them involved in your company.
00:03:37.340 Now, the second C for building an advisory board
00:03:39.920 is compensation.
00:03:41.280 How much should you pay them?
00:03:42.420 Now, I have a big problem.
00:03:43.640 If you've ever talked to somebody that said,
00:03:45.660 hey, man, I love what you're doing.
00:03:46.640 I'd love to help you out,
00:03:48.100 but my network is pretty valuable to me,
00:03:50.920 and if I were to help you out, I'd want, you know,
00:03:53.820 probably five to 10% of your company.
00:03:56.020 If somebody says that, send them to this video
00:03:58.820 so I can tell them to screw off because I am not here
00:04:01.620 to have people take advantage of entrepreneurs.
00:04:04.020 There is no level of networks and introductions
00:04:07.520 and et cetera, et cetera, et cetera that's worth
00:04:10.020 that much of your company.
00:04:10.920 It's actually very irresponsible for you as an entrepreneur
00:04:13.320 to ever have somebody for an introduction
00:04:16.220 or even a couple new customers to take that much
00:04:19.220 of equity in your business, so don't, A, stop that.
00:04:23.220 Compensation comes down to this.
00:04:25.620 First level, advisory shares.
00:04:27.620 Usually 0.1%, two, at the most, two percent, okay?
00:04:32.920 Which is very high.
00:04:34.720 I would, you know, I think 0.1, half a percent, a percent,
00:04:39.020 but I mean, these are people that you just feel
00:04:40.820 are gonna be there for, you're gonna pick up the phone,
00:04:42.620 you have their cell number.
00:04:43.920 It's not a two-month thing.
00:04:45.820 It's somebody that's gonna be part of the business
00:04:47.820 for like the next five years, right?
00:04:50.080 And you gotta throttle and if you have three or four
00:04:52.060 or five of these advisors, then you might have to give up
00:04:54.760 total, you know, two to 10% of your business,
00:04:58.100 but they're gonna bring a lot of value
00:04:59.500 and I'm gonna share that at the end of the video.
00:05:00.940 So that's compensation.
00:05:01.960 Next level, if you have a board and you wanna formalize that,
00:05:05.380 you're looking at like 30,000, two, two million dollars.
00:05:08.700 I have a friend, his dad gets paid two million a year
00:05:11.740 to be on a board of a Fortune 500 public traded company.
00:05:15.320 So, that's the range.
00:05:17.280 I think my favorite compensation level is free.
00:05:21.300 And it happens all the time.
00:05:22.560 I mean, people mentor, people give advice.
00:05:24.800 And if you're a good person that's trying to change the
00:05:26.440 world and you're on a mission, people will follow you on that.
00:05:29.460 So I would say that you could spend more time in understanding
00:05:32.540 the impact you want to have in a positive way.
00:05:35.540 And that might help alleviate the need to just straight up pay 0.97
00:05:38.280 somebody to give you advice.
00:05:39.880 But those are the key areas for compensation.
00:05:42.380 The third area is communicate.
00:05:44.080 How often should you communicate to a board of advisors?
00:05:46.680 Here's the deal.
00:05:47.620 Once a year you wanna send them a strategy deck.
00:05:49.820 The strategy deck is no different than a pitch deck.
00:05:52.080 It's really saying, here's the business today.
00:05:54.320 Here's what we're gonna accomplish over the next 12 months.
00:05:56.260 Here's the high level aspects.
00:05:58.020 And in the email to the advisors,
00:06:01.040 you ask them to do some work.
00:06:02.500 You say, hey, I'm looking for an introduction
00:06:03.960 to somebody with this kind of skill.
00:06:05.440 I need you, because I know you have experience
00:06:07.580 in this industry, to get on a call with my team
00:06:09.900 to support them.
00:06:10.780 I mean, it was one thing I've always done,
00:06:12.080 even as an investor, was make sure
00:06:13.800 that I helped the growth team of the companies I've invested
00:06:16.400 in execute their plan.
00:06:17.880 So you need to put them to work, okay?
00:06:20.440 So that's the communication.
00:06:21.580 Monthly, minimum, once a year in person.
00:06:26.080 I think that's really important.
00:06:27.440 And then the monthly is via email.
00:06:29.680 It's just a quick update, the good, the bad, and the ugly.
00:06:32.220 Just, here's the trick, man.
00:06:33.420 Always start, okay, with the bad news and on the good.
00:06:37.560 Sounds simple, a lot of people don't do it.
00:06:39.860 Some people just avoid the bad news altogether.
00:06:41.760 So make sure you put that in the email.
00:06:43.300 Now, here's the four benefits
00:06:46.040 of having an incredible advisory board.
00:06:47.980 Number one is credibility.
00:06:49.340 You instantly get credibility on your slide deck,
00:06:52.540 when you're talking to a potential new employee,
00:06:54.080 you can mention these advisors' names
00:06:56.680 and they're recognizable, right?
00:06:58.480 Number two is connections, built-in network.
00:07:00.980 You have people that are ready to go
00:07:02.360 that they can make introductions to.
00:07:03.960 They can help you hire other people.
00:07:05.560 They can make calls to get reference checks done.
00:07:08.220 So you get a built-in network, connections.
00:07:10.920 Three is conversations,
00:07:12.120 having those tough conversations with advisors
00:07:14.620 that have been there before,
00:07:15.900 they're gonna give you guidance
00:07:16.900 that are gonna help you get through those tough times.
00:07:18.960 That's invaluable, so that's a big one, connections.
00:07:21.660 And then four, I think where this all comes together
00:07:24.880 is confidence.
00:07:25.800 When you have those people on your team ready to go,
00:07:30.380 you as an entrepreneur can show up in a way
00:07:32.960 that you just illuminate confidence.
00:07:35.520 You exude confidence for your team,
00:07:38.600 for your potential investors, for your new customers.
00:07:40.680 It's an incredible thing,
00:07:41.820 So be sure to find an incredible board of advisors,
00:07:45.380 you know, curate them, compensate them and be sure to
00:07:48.620 communicate with them in a way that keeps them in the loop.
00:07:51.540 As per usual, I want to challenge you to live a bigger
00:07:53.500 life and a bigger business and I'll see you next Monday.
00:07:56.640 If you like this video, be sure to subscribe to my channel.
00:07:59.140 I would also encourage you to join my newsletter where I share
00:08:02.500 invites to exclusive events and other free training videos.
00:08:05.920 And if you're ready to get going, I've got a couple more
00:08:07.540 videos queued up for you.
00:08:09.340 I'll see you next week.
00:08:11.820 You