Choosing the Right Type of Advisors for Your Startup
Seeking advisors for your startup? It's crucial to understand the different types and what value they can bring to your business.
Advisors can play a critical role in the success of a startup. However, it’s important to understand that not all advisors are created equal. In fact, there are three types of advisors, each with their own unique value proposition.
The first type of advisor is what I like to call the “credibility booster.” These are people who have a recognizable name or reputation in the industry. They can add a bit of weight to your startup and give you an extra 15 seconds in a conversation or a reply to a cold email. However, beyond that, they’re not going to do much for you.
The second type of advisor is the “deck advisor.” These are advisors that you add to your startup deck to show that you’ve done your research and you have weight and value behind your startup. These advisors can help you look good on paper and give investors some confidence in your team, but they’re not necessarily going to drive your business forward.
The third and final type of advisor is what you really want – the “real advisor.” These are the advisors who can actually drive you and your business forward. They have deep industry knowledge and experience, and they’re willing to roll up their sleeves and help you tackle the tough problems. These advisors can be the difference between success and failure for your startup.
As you’re thinking about your advisors, it’s important to keep in mind that not all advisors are created equal. You need to think carefully about which type of advisor you need and what value they can bring to your startup. As Charlie O’Donnell said, “When he sees advisors on a deck, it’s just a group of people who had the chance to invest but didn’t.” While I don’t necessarily agree with this sentiment in all cases, it’s a good reminder to be strategic about your advisor selection.
As a case in point, look at the success story of Airbnb. They had an advisor in their early days by the name of Reid Hoffman, co-founder of LinkedIn, who was able to help them navigate the complex world of online marketplaces. His experience and guidance were invaluable to the Airbnb founders as they worked to build their business. This is a great example of a “real advisor” who was able to make a significant impact on a startup.