Entrepreneurs

A 3-Step Technique for Deciding Which Advice to Follow

A 3-Step Technique for Deciding Which Advice to Follow
Image credit: Shutterstock
  • ---Shares

Whether it’s getting the green light for a new venture or securing the next round of funding, entrepreneurs are constantly faced with the challenge of communicating their business ideas and plans with stakeholders - board members, advisors and investors.

In addition to serving as a status update, stakeholder interactions are huge learning opportunities for entrepreneurs, but they are largely underutilized for two reasons.

First, we tend to only share good news with our stakeholders and hide any bad news from them - for as long as we can anyway. In the Lean Startup world, we call this "playing success theater." When you don’t expose the problems in your business, you close yourself off to new ideas that might become your next breakthrough insight.

“A business should be run like an aquarium, where everybody can see what's going on.”
- Jack Stack, The Great Game of Business

Second, when we do get advice, we tend to want to follow all the advice we are given, especially when it's coming from someone we respect or someone who is paying the bills. Left unchecked, this does more to distract and derail you than help.

"Advisor Paradox: Hire advisors for advice but don't follow it, apply it."
-Venture Hacks

If you ask 10 people for advice, you'll get 10 different prescriptions. You can’t act on all of them so which person do you listen to? Should you listen to the advice coming from the person who had the most recent exit, or the person who made the most money?

Here are three ways to overcome this advisor whiplash problem.

Related: Your Best Advisor in Life is Death

1. Expose the problems.

Don’t pitch your advisors or simply seek validation by asking them what they think about your solutions. When you present skewed or selective data to advisors, you create bias, and their advice will be much less helpful.

Instead of simply pitching your solutions, objectively share your business model progress story, and let them uncover any problems. An effective way of telling this story is with a one-page diagram of your current business model depicted below using the Lean Canvas worksheet.

When sharing your business model story, don’t just read the Lean Canvas aloud, because people can read faster than you can talk. Instead, use your canvas as a visual aid. While your advisor is scanning the canvas, share the backstory behind your business. Answer the following questions:

  • How did you stumble on this customer or problem? 
  • What's been done so far? 
  • What’s keeping you up at night?

Related: Advisory Board 101: How to Get Advisors to Say Yes

2. Solicit possible solutions.

You can usually deliver an effective business model progress story within five minutes. With that out of the way, you are now ready to solicit their advice. This is the heart of the conversation.

Leaving the Lean Canvas open, in front of people, almost always evokes a reaction because it helps them visualize the entire business model, and they typically always have an opinion.

“A problem well stated is a problem half-solved.”
- Charles Kettering

If needed, ask them specific questions to trigger the conversation.

  • What do they consider to be the riskiest aspect of this plan?
  • Have they overcome similar risks? How?
  • How would they go about testing these risks?

Related: Are Investment Advisors Worth the Investment?

3. Test big ideas with small experiments.

The key is not taking the feedback you receive as judgment or validation but rather as a means for prioritizing what’s riskiest in your business model. If eight out of 10 advisors raise similar concerns, there’s a high likelihood those problems are worth prioritizing.

However, it's still your job to own your business model. Remember that you are the ultimate domain expert of your own business. You don't get a gold star for following advice but for achieving results.

Using validation techniques, such as customer interviews and split tests, it's possible to test any idea or strategy by conducting multiple small, fast, additive experiments.

Your next course of action should be crafting such an experiment to test the efficacy of the advice. Then double down on the best advice (and advisors), and ignore the rest.