Aaron Schwartz and I have both been working as entrepreneurs since 2009. Five years in, we’ve collectively advised over 100 companies (we use the term “advise” loosely, of course). Our advisory meetings range from 20-minute phone calls with first-time entrepreneurs to several face-to-face meetings per month with a founder who’s also a friend.
Recently, an advisee asked Aaron for a quick 15-minute call. After 40 minutes, Aaron hastily ended the conversation. The meeting, like many other advising meetings, had run long. Aaron realized that he needed get back to work for his company, Modify, but he also felt stressed that he hadn’t fully helped his advisee. The interaction wasn’t positive for either of them. Advising is a constant struggle: you want to help others, but time spent advising is time not spent building your company.
Plus, unstructured advising can be dangerous. Ultimately, your co-founders, investors, employees, and customers are counting on you to grow your business — not someone else’s. You need to find the right balance between building and advising. We’ve learned quite a bit about advising over the last five years and wanted to share our tips with you:
- Use the 10x rule. Spend time with entrepreneurs who you can help the most. For each hour you spend with an entrepreneur, they should save at least 10 hours. For Aaron, an hour spent discussing crowdfunding (he recently ran a campaign) can replace 10 hours of research for someone new to crowdfunding. Pro tip: Aaron suggests you use Indiegogo.
- Make intros: Often, the biggest benefit that you can bring to an advisee is your network. Rather than fighting your way through a topic that you’re not an expert on, direct your advisee to someone who is an expert (see 10x rule above). For example, Bhavin often receives requests for help with customer acquisition. Rather than field these himself, he makes an intro to his Director of Marketing who knows much more about the topic (and of course, double opt-in all intros.)
- Ask for questions before the meeting. Asking an advisee to write down her questions before the meeting will do two things. First, it will provide you with a clearly set agenda for the meeting. And second, you often can tell whether you should avoid the meeting altogether (while creating the same value) if you can simply answer the questions over email.
- Point to other resources. We both have created “reading lists” for entrepreneurs. You can see Bhavin’s here. These lists not only give you a quick way to help someone, but also provide an easy way for you to refresh your memory on certain topics.
- Avoid face-to-face meetings (and definitely avoid traveling). It’s often fun to go grab a coffee and “talk shop” with someone. Just don’t forget that a face-to-face almost always requires more time (you might spend an hour when 20 minutes would have sufficed). And if you have to travel for the meeting, that time really adds up — not only the commute, but also the transition back into working mode when you finally return to your office. Instead of face-to-face, try Google Hangouts or Skype.
- Create a time box. Be explicit with how much time you have for a call or meeting. Schedule the meeting for a set amount of time (e.g. 20 minutes). Reiterate at the beginning of the meeting that you only have 20 minutes. And end the discussion after 20 minutes; you have a company to run! Pro-tip: Schedule back-to-back advising meetings, so you don’t “accidentally” let a 20-minute meeting turn into an hour-long one.
- Become a formal adviser. When you start advising a company, you shouldn’t expect anything in return. You should do it to give back to the entrepreneurial community that you likely benefited from. However, if you find yourself creating significant value for a company or spending an hour or more per month with a founder, you should start the formal adviser discussion. It’s not about the equity. After all, most startups fail — it’s a signal (both inward and outward-facing) that you are committed to the success of that company. You also now have a great reason to prioritize time with that entrepreneur over time with others. And if you follow the 10x rule, the entrepreneur’s equity will be well spent on you. Here’s a general framework on how much equity advisers should get.
Advising can be very rewarding, but you need to make sure you do it the right way. At the end of the day, you have a business to run. Plus, you will create more value in the long run if you are still in business and can keep advising!
This article was co-authored by Aaron Schwartz, Founder and CEO at Modify Industries, Inc., which designs interchangeable custom watches known as Modify Watches. He loves working on startup ideas and has spent innumerable (happy) hours advising friends and former students on how to grow their ideas.
Bhavin Parikh is CEO and co-founder of Magoosh, a company that creates web and mobile apps to help students prepare for standardized tests such as the GRE and GMAT. He loves advising startups on growing their ideas and building great cultures.
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.