Advisors can be so much more than social proof and tactical advice
“Can we include you on our deck as a consultant? You don’t even have to do anything and we will give you justice. It would be of great help to our fundraiser. “This was the suggestion I was offered surprisingly many times in my pre-homebrew days. As you can see, the demand for “startup consultants” experienced a small boom.
AngelList was just getting started, and their company profile page had a number of “advisor” slots that were displayed in the same visual design as investors and team members. This subtly led to a pressure of social evidence to fill the available spaces in the most impressive way possible. Never underestimate the power of the default settings!
Anyway, fast forward to 2021 and it almost feels like the roles of startup advisor have gone a little out of style with everyone trying to be an angel investor, scout, or solo capitalist. Many of the people who may not have had access to capital before can now invest their own dollars or those of others and this has much greater social evidence for both the company and the individual. Most of the companies we support figure out how to use consultants in a compelling way. It’s just not as public as it used to be.
That said, there are three types of consultants that I don’t think are widely used by early stage startups – at least the ones we don’t recommend 😉
The advisor “I will recruit you later”
Great founders always recruit. Often for open roles, but also for the long game to build relationships with passive senior candidates who are either not ready to leave their current job or are more interested in the opportunity when you get a step further. Instead of just taking a note every now and then to have a coffee, I suggest hiring her as a consultant. It doesn’t necessarily have to be a large commitment (or significant equity), all you need to do is give them some bond with your startup and an incentive to keep the relationship going. Of course, this won’t work if you’re currently employed by a competitor, but otherwise it’s half a step in the right direction. Try each other before buying and give them the opportunity to better understand the company.
The consultant “Setting up my functional leads for success”
I’m a big advocate of startups that hire talented high-level people who are earlier in their careers and who haven’t necessarily done the job they’re hired for. For example, if you meet someone who has been PMM at Google for a few years on a high performing team and is longing to take on a role that will allow them to spread their wings more, grab them. Don’t worry that she didn’t have a senior title or whatever. Just get them on board and prepare them for success. One way to help her is to make sure she has a mentor. Not only within the company, but also outside of it.
Ask them if there is anyone in their career who has been a great manager, and if so, hire them as an equity-compensated advisor to your company. Don’t make it your business to convince them to keep supporting them and give them some skin in the game. You will establish the new mindset for success and this should pay off in multiples. I have also found that telling a candidate like this that they are receiving an “advisor equity budget” to bring people closer to the company who can be of use is a signal of confidence and agency.
The adviser to the customer council
This works especially well if you’re selling in a non-tech industry, as it’s even more novel and exciting to bring a bit of equity into a startup. Try to put in place a sales and marketing tactic (or even more) than a customer development tactic, and set up an advisory board of the customer council. For relatively small amounts of equity, you can assemble a group of 3 to 12 people from your industry who are mutually committed to contributing to success. It’s a great group for networking, press quotes, product feedback, and the like. Of course, avoid direct conflicts of interest – that is, these people may not (most of the time) be your current buyers, but they can certainly come from customer organizations (if their own policies allow) and from larger customers that you target only a few years later.
Hopefully you can use consultants in new and interesting ways! Remember that the standard agreements run for two years, have a lock-up period of 3 to 6 months (monthly thereafter), and each party retains the right to terminate. Have you managed to use consultants in a non-traditional way? Let me know!
Notes and more
Give the vaccine to everyone! Of course, try to prioritize the people at risk first, but let’s also focus on the speed of the rollout. Everyone who gets vaccinated makes it safer for everyone else.
📦 Things i enjoy
Etta + Billie soaps. SmartSweets sugar-free gummy bears. This essay on the widening economic gap between technology and almost everything else.