Millennial Media just gave a really valuable talk at the International Startup Festival in Montreal titled "Investing in Your Influencers." Palmieri talked about how startups can get the most value out of their advisors and friends.Paul Palmieri, Co-Founder and CEO of mobile advertising service
Prior to founding Millennial, Palmieri was a mobile advertising and data executive at Verizon and Advertising.com. My notes from this very interesting strategic talk follow below. I've posted them without comment as I think they speak for themselves, but would love to know what you think of this advice, readers. I'll tell you one thing: hearing these thoughts articulated so clearly makes me think that anyone thinking about joining a new company would benefit greatly from asking about that company's relationship with its advisors.
- When you have advisors, there is an expectation of an exchange of value and you need to overcompensate the value you give back to them. That will serve you well in the long run.
- Palmieri drew a pyramid diagram to illustrate three groups of influencers. The top and smallest group was the Inner Circle. If you're a person who has a large Inner Circle of friends and advisors, he said, you've got to work to limit that so as to not lose focus. The next, larger layer of the pyramid are advisors who offer a soft value exchange. These are people with whom you can share some type of value, but not tangible value like stock options or payment.
- The bottom layer of the pyramid, presumably the people furthest from your inner circle but the largest in number, are the people with whom you offer tangible exchanges of value, like payment. These exchanges need to be closely accounted for, Palmieri says, so that everyone keeps feeling good about the balance.
- "I draw a map of where my influencers are and if i'm traveling somewhere with an advisor nearby, I schedule an extra half day there. Not just lunch, but more time than that. As your company becomes more successful, your advisor may want you to give advice to one of their friends - that's a great thing to be able to do."
- Advisory boards: "Many people create an advisory boards and some companies never have an advisory board meeting. At Millenial we have an annual meeting at a retreat-like setting. Have people arrive at noon and leave noon the next day. Your advisors can't help you unless they have a deep understanding of what you're up against and that can't be communicated informally."
- "Do you need a rock star advisor? My belief is that a rock star advisor can be useful but doesn't belong on the advisory board. That board should be people who have the time to be focused on you. I do not find that rock stars fit in very well to an advisory board situation. Are they useful interms of introductions? Yes, but put this person in the bucket of clear value exchange. If the relationship becomes a soft value exchange, that won't work for them. If they are a rock star they need to get value for their time - and if it's a soft exchange, the balance with a rock star risks going bad."
- "Your CEO coach is a very important source of influence and advice. No one else should know who they are, you should meet with them twice a month and tell them exactly what you are going through. Is your head of sales an asshole but growing your company 2X a year? Who will you ask that question of? Your advisory board? No! Things become very personal and a CEO coach is very important."
- "People who are your advisors, on your board and other influencers... constantly write it down the value of your exchanges, keep your own private balance sheet on those interactions. The worst thing you can do with a friendship is to quantify it, but you really should quantify the value that each advisor is bringing to you. That's because you want to know how to budget your time when time gets tight and tough. You need to know from a budget allocation perspective who to spend the most time with."
- "Advisory board members should have good, informal access to your employees so they have one more piece of information. Pick your advisors carefully. Investors only in the rarest cases are appropriate to be your advisors."
- "Business partners, co-founders, top executives - it's critical that you stay together in the important things you do. You need to prioritize collaboration between the executive team."
- "It's ok if you're not in Silicon Valley but who is your emissary? Someone needs to be there. It's not that someone needs to go and take a trip there - someone needs to be there all the time, in the coffeeshop overhearing things."
- "It doesn't cost a lot to write a thank you note, to put two cigars in an envelope and put them in the mail. Almost no one in business really does the really important, finer detail stuff. Just do that and it will have incremental impact on your business."
How does that advice strike you, readers? Does it inspire any related advice you'd like to share? Let us know in comments below.
Disclosure: The city of Montreal paid flight and hotel expenses for me to come to this event, get smarter and learn how to advance my career. Of course they were hoping I would write it all up and share it here with you here. I'm happy to be able to do so.