Some naiveté is an important part of doing a startup. Startups are fueled on unrealistic dreams and contagious optimism. The uber-successful entrepreneur always do things that no one thought would work. Their pure insistence to do things their way becomes a new standard for how things are done.
And we entrepreneurs know this. We're so used to people telling us that something won't work that we have developed a little voice that continually tells us 'They just don't get. I'll prove them wrong." It's a healthy mindset.
The problem occurs when entrepreneurs take it to an extreme and fail to get any good advice because they want to do everything their way. When I started my first company, I couldn't figure out how to split equity with my co-founders. I hadn't read any good blogs and had never done this stuff before. None of us were full-time yet and none of us had put money into the company. We all had wavering levels of commitment. We came up with this insane plan where we would track our time contribution each month and adjust equity dynamically. We built a spreadsheet, talked through the variables, and mutually agreed that is was fair. Each month, we would self evaluate our contribution as full-time, partial, or limited. New shares would be authorized each month to take into account the varied work performed.
It was just insane. We were being idiots.
What would an investor have said if they had seen this insanity? Eventually, we switched over to a normal equity split with vesting schedule according to standard docs, but it was a pain in the ass to convert over and involved some awkward talks amongst the co-founders.
What was really telling about our equity spreadsheet insanity was that no one told us that there much better solutions available. We didn't have anyone to ask.
I think about that first equity spreadsheet whenever I talk to an entrepreneur with some dumb ideas about how to run their start-up. As a rule, I never give product advice because I know for a fact that I'm horrible about predicting the future of industries. As readers of my blog know, I give very strong opinions about process though. There are many parts of the start-up process that don't need significant innovation. An entrepreneur's education is to learn all these conventions that work well and then innovate on their product. One of the wonderful parts of our Hacker News community is that we're educating each other on all these conventions that work.
In addition to being a good reader of great blogs and books, you need a great group of advisors. Many people have covered the value of having an advisory board to help you with introductions, investor credibility, insight into an industry. I'm not addressing that here.
My recommendation is to find a 'Start-up Advisor'--someone that will advise you on the tactical and strategic parts of running your start-up. At Openvote, we had some incredible senior advisors at the point that I came up with our idiotic equity plan. However, they were either too senior to ask them about day-to-day execution details or too industry-focused to know how to help with start-up matters.
Do you have a great Start-up Advisor that is helping you paddle through the currents?
Attributes of great Start-up Advisors:
Only a few steps further down the path
A great Start-up Advisor gives advice that is undoubtedly relevant. A entrepreneur that is several steps in front of you will still remember the challenges you are facing. They can warn you about issues that aren't yet on your horizon. My best Startup Advisors often seem to use the phrase, "then what's going to happen is..." because they're tuned into your exact stage of development. Be careful with respected BigCo experts that are trying to be Startup Advisors. Despite good intentions, their Google/Facebook/Amazon/Salesforce perspective may be wrong for start-ups at your stage.
Happy to help with the small challenges
You'll have big strategic questions with your startup. Hopefully, all your advisors will help you with these big ticket items. Meanwhile, you'll have a thousand small executional issues that will all be important in some small way and all cost you time to figure out. How do I set-up an office? What's an 83b? Should we develop our iPhone app internally? How do I write a terms of service? A great start-up advisor will help you make good decisions on all these small items. The aggregate of getting all this small stuff done right upfront is what becomes executional excellence.
Willing to call you out on idiotic stuff
There are times when you're just wrong -- When you prevent getting good advice because you're in stealth mode. When you dream up crazy equity vesting plans. When you go way past your minimum viable product without launching. A great Startup Advisor will give you advice with enough authority, credibility, and directness that you see the error of your ways and adjust without wasting too much time.
Is respected by your co-founders
A great Startup Advisor can break deadlocks or prevent them from even happening. Co-founder relationships take so much work to maintain, especially during the trough of sorrow, that it's relieving to have someone that can quasi-over rule everyone. When a Startup Advisor weighs in on a dispute, small or large, that's one time when no one needs to win or lose the argument.
Cares about you more than your startup
My best Start-up Advisor on both of my last companies is a childhood friend who has always been a few years ahead of me in start-up land. He's a great friend first and a start-up mentor second. When other advisors lost interest because we had failed to find product-market fit and it wasn't as fun anymore, he was always there with support and guidance. Absolutely invaluable. By the way, Paul Graham and Jessica Livingston are this way. They support their YC entrepreneurs first and the startup second.
One of the great parts about being in the Y Combinator community is that we all serve as Startup Advisors to each other. It's an incredible advantage. If you don't have easy access to great Startup Advisors like the YC alumni network, you need to find one anyways. Until you do, you'll be making small idiotic decisions, never knowing that you're slowing digging your own grave.
As always, if there's anything I personally can do to be helpful to you, please do let me know.
Find discussion of this post on Hacker News