- How do my eyes look?
Yeah, shirt is straight.
Dapper.
Alright, collar's popped.
Alright.
iPhone watch is dead.
(upbeat music)
How to build an advisory board for your business?
Now, I get asked this question all the time so here's the deal
if you've ever felt frustrated 'cause it's your first time,
you've never built a company before and you really 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 out your
business, what I love about a great advisory board is it
allows you to get the answers quick.
Like as soon as you have a challenge you can have the
person there ready to answer the questions.
It allows other people to see the credibility.
If you can convince really great people that they know of to join
your team, instant credibility.
My favorite part is a built in network right
of people because
if you try to hire, you know, lead people, C-level people on
your team having those advisors part of that is really gonna
change the game for you.
You know, I've been fortunate enough I teach a framework
called The Dream 100 and part of that is really focusing on the
people that are to be part of your business, right?
If you think that you can climb Mount Everest in your
board shorts and sandals with no support,
you're crazy.
Go get your head checked, it's not gonna happen.
So an advisory board is just one aspect of this but,
you know, when I was building my company Clarity that was one of
the first things I decided to focus on to build the businesses
is get a board of advisors,
people that have been there before.
Areas that I felt like I didn't have as,
I wasn't as strong as.
I mean that to me is like advisors are people that have
strengths in areas you're weak at.
So, you know, one of my advisors was a guy named Carl Jacob.
He actually had built a company
back in the late 90s just like Clarity.fm.
An expert network for entrepreneurs to
get advice over the phone.
I had Keaton Shaw who's one
of the top SaaS experts in the world.
He built a company called Kissmetrics.
He's incredible.
Definitely follow his blog.
Andrew Chen another guy, he now runs growth at Uber.
He's written over 700 essays on startups and technology and
Mr. Eric Ries, yes, the creator of the lean startup.
I was super blessed to have
these four people as formal advisors.
What I want to share with you guys in this video is how to
think about the different aspects of building that team.
How do you think about paying them?
How you think about keeping them in touch?
Those are the different areas and then what's the value of
putting advisory board together, that's the first
that's what I'm gonna end on.
Now curate is the first C.
I want you to write these down.
Curate, leave a comment below, let me know if you have
questions but you want to curate a great advisory board.
So, how do you do that?
Here's my favorite technique.
Okay, I'm gonna share one if you leave a comment below
I might share more.
One is go on LinkedIn, search previously worked at and a
company that you know the role, so if I was hiring,
if I needed expertise in sales I would say well who's got the
best sales team in the software space.
Well Salesforce.com would be a good option. I would search on
LinkedIn previously worked at Salesforce.com.
Role or title would be VP of sales or director of sales and
it would give me the list of the people that used
to do that role at Salesforce.
How incredible is that?
I've had many entrepreneurs do this and find incredible
advisors to join the board because they're not working at
that company anymore.
They're probably more than willing to take a call to give
you advice and if you build that relation over time then you can
get them involved in your company.
Now, the second C for building advisory board is compensation.
How much should you pay them?
Now, I have a big problem.
If you've ever talk to somebody that said,
"Hey man, I love what you're doing.
"I'd love to to help you out but you know my network is pretty
"valuable to me and if I were to help you out,
"I'd want you'll probably 5 to 10% of your company."
If somebody says that send to this video so I can tell them
to screw off because I am not here to have people take
advantage of entrepreneurs. There is no level of networks
and introductions and et cetera, et cetera,
et cetera that's worth that much of your company.
It's actually very irresponsible for you as an entrepreneur to
ever have somebody for an introduction or even a couple
new net customers to take that much of equity in your business.
So, don't, A, stop that.
Compensation comes down to this, first level,
advisory shares.
Usually 0.1% to, at the most, 2%
okay which is very high.
I would, you know, I think 0.1, half a percent,
a percent but I mean these are people that you just feel are
going to be there for you.
Are gonna pick up the phone, you have your cell number.
It's not a two month thing.
It's somebody that's gonna be part of the business for like
next five years, right, and you get the throttle and if you have
three or four or five of these advisors then you might have to
give up total 2 to 10% of your business but they're gonna bring
a lot of value and I'm gonna
share that at the end of the video.
So that's compensation.
Next level, if you have a board and you want to formalize that
you're looking at like $30,000-$2 million.
I have a friend his dad gets paid $2 million a year to be on
a board of a Fortune 500 public traded company
so that's the range.
I think my favorite compensation level is free
and it happens all the time.
I mean people mentor, people give advice and if you're good
person that's trying to change the world and you're on a
mission people will follow you on that.
So I would say that you could spend more time in understanding
the impact you want to have in a positive way and that might help
alleviate the need to just straight up pay
somebody to give you advice.
But those are the key areas for compensation.
The third area is communicate.
How often should you communicate to a board of advisors?
Here's the deal, once a year you want to send
them a strategy deck.
The strategy deck is no different than a pitch deck.
It's really saying here is the business today,
here's what we're gonna accomplish
over the next 12 months.
Here's the high level aspects and in the email to the advisors
you ask them to do some work.
You say hey I'm looking for an introduction to somebody with
this kind of skill.
I need you 'cause I know you have experience in this industry
to get on a call with my team to support them.
I mean one thing I've always done,
even as an investor, was made sure that I help the growth team
of the companies I've invested in execute their plans.
So you need to put them to work, okay?
So that's a communication.
Monthly minimum, once a year in person I think that's really
important and then the monthly is via email.
It's just a quick update.
The good, the bad, and the ugly.
Just here's the trick, man.
Always start with the bad news, end on the good.
Sounds simple, a lot of people don't do it.
Some people just avoid the bad news altogether so make sure you
put that in the email.
Now, here's the four benefits
of having incredible advisory board.
Number one is credibility.
You instantly get credibility if on your slide deck,
when you're talking a potential new employee you can mention
these advisor's names and they're recognizable, right?
Number two is connections built in network.
You have people that are ready to go that
they can make introductions to.
They can help you hire other people.
They can make calls to get reference checks done.
So you get a built-in network connections.
Three is conversations, having those those tough conversations
with advisors that have been there before.
They're gonna give you guidance that are gonna help you get
through those tough times.
That's invaluable so that's the big one connections and then
four, I think where this all comes together,
is confidence.
When you have those people on your team ready to go you as an
entrepreneur can show up in a way that has,
that you just illuminate confidence.
You exude confidence for your team,
for potential investors, for your new customers.
It's an incredible thing so be sure to find an incredible
board of advisors.
You know, curate them, compensate them and be sure to
communicate with them in a way that keeps them in the loop.
As per usual I want to challenge you to live a bigger life and a
bigger business and I'll see you next Monday.
If you like this video, be sure to subscribe to my channel.
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if you're ready to get going I've got a couple more videos
queued up for you.
I'll see you next week.