Navigating the early phases of scaling a software company can feel like steering a ship through a meteor storm in deep space. A lot of things come at you quickly and the path forward isn’t always clear. Without expert guidance, even the brightest entrepreneurs can veer off course. This is why we strongly advocate building an experienced ‘team behind the team’ to provide you and your senior managers with expert advice and an expanded network to accelerate growth. Your investors should be a part of this team, but don’t stop there.

The Power of Experienced Guidance

As you seek to scale, you will need to take quick, decisive action often with imperfect information. Mentors and advisors can add a wealth of experience from your industry or in specific aspects of SaaS operations, and help you build your network, attract and grow talent, and become a better CEO. Here are just a few of the ways advisors have helped our portfolio companies:

  • Filled in gaps in the team’s functional expertise and mentored less experienced team members on key aspects of operations
  • Added to the ‘voice of the customer’ in key product and go-to-market decisions
  • Counseled on ways to speed up product delivery
  • Helped avoid costly legal and HR pitfalls
  • Identified and lowered operating expenses that weren’t contributing to growth
  • Provided perspective on what ‘great’ performance looks in assessing and upgrading talent
  • Helped with screening and interviewing key hires
  • Introduced the sales team to prospects, helped them navigate up within the organization, and influenced important C-level or board level decision-makers

Building the Team Behind the Team:

Knowing the advantages advisors and mentors bring, the next step is start by thinking about the most critical ‘jobs to be done’ in the near term and determine what are your highest priorities:

  • Industry rolodex
  • Voice of the customer
  • SaaS leadership expertise (CEO Whisperer)
  • Go-to-market expertise
  • Product & technology expertise
  • Finance & FP&A expertise
  • Customer on-boarding and retention

Once you know where you want to focus, you can start to consider how you want to get advisors involved in your business:

Board of Directors: by the early scaling phase, most company’s boards have expanded to 5 directors. Seek to fill independent board seats with seasoned SaaS operators and industry insiders that are willing to roll up their sleeves and go to work for the company. While these individuals can make a strong contribution in board meetings, the real contribution should come outside of these meetings with a regular cadence of CEO mentoring and networking discussions.

Executive Advisory Board: you only have so many BoD seats, so expand on this by creating an Executive Advisory Board (EAB). Seek senior industry executives who are excited about the innovation you are delivering and would be willing to open up their rolodex to help. Landing one or two key individuals can help you land even more, as industry insiders will see value in engaging with a high quality, connected group.

Peer Mentors: being the CEO of an early-stage company can be a lonely job, but its not easy for your senior team either. Seek to pare yourself and your senior team with experienced ‘peer’ mentors who have served in a similar role in a company that has scaled up from your stage.

Keys to Success:

  • Work with your board to set aside a portion of your option pool to compensate directors and advisors in these three roles. Where appropriate, consider budgeting additional cash compensation. If you get the right advisors, you will more than pay back these expenses.
  • With each board, EAB or advisor, clearly establish expectations up front, define what success looks like and what contribution you are looking for from them over a 6, 12 and 24 months timeframe. Be very explicit and create a system of accountability to measure their individual contribution just as you would for an internal role. You are NOT just looking for someone to spout opinions and reflect on their glory days. You want someone that will roll up their sleeves on behalf of the business.
  • With board members that have relevant SaaS operating experience, set up a recurring one-on-one call at least twice a month. Be prepared to share the KPIs you use to manage the business on a weekly basis in these calls and be transparent about the issues you are working through. They won’t be able to effectively mentor you if you don’t give them exposure to how you are managing the business.
  • With EAB members, consider setting a one year term to start and assess the contribution over this time period. This will allow you to gracefully let the non-contributors roll off the board (without ‘firing’ them) while inviting back the individuals that are really making an impact.
  • Don’t leave the method of engagement in each of these roles undefined. Create some structure around their involvement with regular meetings and feedback loops. This will ensure you leverage their insights continuously.

Take Action Now

Every startup faces its share of challenges, but you don’t have to face them alone. Incorporating experienced advisors in your business can help you avoid common mistakes, boost efficiency, and accelerate growth. These individuals are not a substitute for your own insights and judgement, but they can be a critical supplement to help you make better informed decisions. Start building your team behind the team today.