A Large Advisory Board Can Help Your Company Grow Faster
about.me started as a four person company -- with 26 advisors.
When Ryan Freitas, Tim Young and I founded the company, we met with all of the people we respect and trust, sharing our ideas and helping to build a community around the product we wanted to create and the company we wanted to build.
Somewhere in the middle of these meetings, we got in the habit of inviting these people to become advisors. We weren't always certain of the ways in which they would be able to help, but we loved the idea of bringing people we respected around the table of a company we were creating from scratch.
When we reached 26 people, many of our contemporaries started to think we were losing it. Why did we have so many advisors? Nobody does that. They were right, but then again, why not? So our response to them was simple -- when you bring intelligent, credible and inspirational people into the fold in a way that makes sense economically, you not only receive their blessing and advice in return, but you also gain credibility, and from there the potential for magic happens.
Advisors help set the tone. One of the best things about advisors is that they can act as your initial user base. When we launched, our first pages were created by people on our advisory board, including Veronica Belmont, Om Malik and Dick Costolo -- people who are credible in the social web and understood how to participate in it.
This was the group that believed in us as founders and the vision we shared for our company, which meant that they also understood what a beautiful about.me page should look like and achieve. It completely set the tone for what the site looks like today.
Because we created an initial user base with advisors, we were also able to extend into their networks and reach a group of users we never would have thought we could reach so early on in our company’s existence. Often, social products in the Valley can exist only for the Valley itself, but by inviting advisors into about.me who had broad reach and diverse networks, we were able to cross over to an entirely new audience.
As an example, Om Malik has 1.38 million Twitter followers. Those 1.38 million followers live in San Francisco, Indiana, India and many other spots in the world. He introduced 1.38 million people to the possibilities of our platform. That's powerful.
Of course, there are two obvious questions about this strategy. How much does it cost? What if I don’t have access to high-profile individuals who have powerful networks?
The cost of the board. Our 26 advisors ended up owning about 2.75 percent of our company. Economically, by virtue of having so many advisors, we were forced to make the equity grants smaller for each person than what is considered the norm.
Typically, a startup allocates 1.5 to 3 percent of its equity for advisors. We granted each of our advisors a very small piece of equity, somewhere around a tenth of a point in the company. Anticipating some push back, we made their option grant fully vested shares, which took all the friction out of the deal and shifted the conversation from "what percent of the company am I getting?" to "that's great, happy to help out."
The advisors aren't burdened with unclear expectations of what they're supposed to do, and they get compensated no matter what happens. On our end, we benefitted from 26 brilliant minds, all with various backgrounds and expertise, regardless of the degree they were able to commit time to our company.
My board isn't as high profile. This strategy is not about getting the most connected or influential people around the table, it’s about getting your community of people around the table -- people you want to have involved in your company because they are potentially going to give you a nugget of an idea, broaden your reach, and, most importantly, endorse your vision.
It could be someone who only has 112 followers on Twitter, but that’s 112 more opportunities to reach new users than you had previously. You have to start somewhere.
In this case, you could technically have 100 advisors and give them a tenth of a tenth of a point. It’s about harnessing your community to generate broader awareness that crosses outside of wherever you’re based so that you can eventually reach mainstream users, and then even move abroad. Not to mention, if you don’t have access to someone who you consider “high profile,” it never hurts to ask for advice or help -- you’d be surprised at how far it gets you.
As we welcome a new group of advisors, we now have a platform with millions of users who are located on every continent, and we got there fairly quickly. That is powerful to us. Very few companies can say that, and it’s something we’re extremely proud of. We have our 26 original advisors to thank.
We truly believe any company or person can achieve this same success -- it’s all about inviting people who inspire you and whom you respect to be a part of your vision.