by • October 14, 2011 • Best of, Listening, Talking about your startupComments Off30

Getting and giving good startup advice

Good people end up giving bad startup advice in two ways.

First, it happens when the advice is given irrespective of which stage of the startup lifecycle[1] the company is in.

Second, it happens when opinions are given about whether the whole idea is “good” or “bad”. Experts can often provide excellent insight about the practicality of a specific element of the business model, such as the channel. But since any number of those pieces may be swapped out along the way, it’s very difficult to judge the business as a whole. Even VCs, who do it professionally, are generally wrong.

Fortunately, although these problems appear in a lot of exchanges, either party has the power to prevent them. That means that as a founder, you can take control and start getting good advice. Left unchecked, these problems create confusing and frustrating conversations full of worthless advice.

How to get good advice

Most founders will start with a pitch, and then stare blankly waiting for some sort of feedback. It’s very hard for mentors to give meaingful advice based on that, so you’ll get something wishy-washy which matches their mental model of the “typical” startup. It won’t be useful.

To get good advice, you need to do 2 things:

  1. Skip the pitch. At most, tell them which industry or general business model you’re using. “Hey, I’m starting a SaaS company” or “Hey, I’m starting up an ecommerce biz” The pitch doesn’t lead to good advice. You want to get to how they can help ASAP. If they care about your segment at all, they’ll ask follow-up questions and you can get to the fun stuff once they’re engaged.
  2. Tell them how far along you are.
  3. Tell them where you’re stuck. Nobody can pinpoint your questions from a visionary description — it’s your responsibility to focus in on a specific type of problem they can help you with.

The entire opening to the conversation with a friendly expert fits in a couple sentences and looks like this:

Hey, I’m Rob and am starting a B2B tools company. We’ve got 50 beta companies who use it every day, but nobody converts to paid accounts no matter what we try. How can we figure out what’s going on?

Hey, I’m Rob and I want to start a marketplace business for the developing world. It’s still just an idea and I’m really struggling with what to focus on first to figure out if it will work or not. What do you think is our top priority?

In both cases, that introduction is going to lead to a more productive conversation than if you just pitched the idea. For example, without zooming in on the first example’s progress & problem, you’re liable to get someone saying they don’t think that’s a real problem for small businesses (even though you know it is thanks to your beta users). They’re just assuming you’re at a different stage than you are and are asking the important questions — for a younger company.

That’s basically it — don’t pitch them, and do tell them how far along you are and where you need help. Meeting people will mysteriously become extremely productive.

How to give good advice

I start most advice conversations with the same three questions:

  1. In a sentence, what are you guys working on? They’ll usually tell you this whether you ask or not, but it’s helpful to explicitly time box it so you can cut them off and avoid wasting the whole conversation here.
  2. Which pieces of it do you really care about? This is used to constrain the advice I give. If the whole reason they started the company is because they really care about helping a certain customer segment, then advising them to make more money by switching industry is not relevant.
  3. How far along are you? The goal here is to be able to zoom in a specific part of the business which is a current priority. If they’ve already got sales, then being skeptical about their value proposition is a non-starter and you energies might be better spent prodding their channel or supply chain plans. If it’s all just an idea, then talking about marketing optimisations is less useful than helping them figure out which questions to ask that industry advisor at their meeting next week.

So in conclusion

If you read both sections, you’ll notice they take the conversation to the same place: this is where the company is at and this is where it needs help.

Either party can steer the conversation onto this more useful course. You can be a “good” mentor by being able to help most companies you talk to via creating a useful conversation structure. You can also be a “good” mentee in that you tease out good advice from a disproportionate number of the people you get a chance to talk to.

[1] In Blank’s customer development terms, the lifecycle is customer-problem-solution discovery, then validation by getting early customers, then scaling the channel, and then you establish the processes to stop being a startup. The marmer stages classify it as discovery, validation, efficiency, and scale. A meaningful advice conversation should focus on different questions based on which stage the company is at.

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