Your choice of advisor is going to be critical in the early stages of your travel startup. There is a lot of advice given by advisors – but how do you choose an advisor?
There just doesn’t seem to be much good intelligence online about choosing the right person or team to work with. I have seen some great ideas not given the right amount of nourishment.
Our small team at VaultPAD, an accelerator for travel startups, is working with several startups at the moment. Based on more than two decades of working with startups, I have a few observations that cover both good and bad on both sides of the equation: the advisors and the advised.
My goal, if you will permit me, is to help ensure that startups are able to put their needs for advisors into context. (A side note: If you harbor ambitions of your startup becoming a unicorn, then stop reading right now. I cannot help you.)
Many startup founders have no experience in any business, let alone in the real commercial world that is our peculiar travel industry.
What we see is that there is a tendency for many startups to latch onto the first voice of authority that they encounter. Frankly this has to be the worst mistake. Founders then filter everything they hear afterward via that view, following the bias of whatever that voice sounded like.
There are quite a few people who are in the field who are offering advice. Remember it really is caveat emptor.
You really must know your needs — your express requirements. This is rule zero and you really need to have this as the basis for what you are doing. I don’t count this as rule; it’s basic common sense.
Now that we have that out of the way... As you choose an advisor for your startup, there are basically 5 rules to consider.
Rule 1 – watch out for the OBE Syndrome – Other Bugger’s Efforts
Basking in other people’s glories is a common pasttime for some startup advisors. In determining if the advisor is actually suitable to help you, find out what exactly your advisor did in her/his moment of fame. Were they part of the team, or just someone who was there? There are many players who were bit players.
How are the advisor’s skills actually reflective of the work they did in their glory moment? Too often there are advisors out there who really don’t have relevant experience but are riding the coattails of somebody else.
Rule 2 – Does the advisor’s experience have a real application to the requirement of the startup?
If someone is good at one thing in one sector, does this mean that their greatness applies to to other sectors – specifically, to yours?
For example, does experience in intermediary activity translate into specialist knowledge of the supply chain yield management structure? Probably not. A good perspective, perhaps, but is that enough?
Dig deep into your advisor’s credentials. Ask for references on your advisors. You would do that if hiring an employee, would you not? Then why not an advisor as well?
Rule 3 – Beware one-hit wonders
In the music – indeed in the whole entertainment field – you are only as good as your last hit. It should be the same for the advisors of startups.
Where are the real hits and what was the rest – few people will ever put their failures into their resume/CV?
Many startup advisors – those who purport to be that – are actually people who got lucky.
I believe that luck plays a significant role in success in travel. I have found that many experts I have listened to were just that – lucky. They happened to be in the right place at the right time. Find out how much time they spent there – and when.
Rule 4 – Is their experience relevant – topical – still?
I was on the startup team of Expedia. That was in 1995. Is that experience still relevant? Hardly -- other than the learning of the process. The world is vastly different from those years.
Is your prospective advisor actively involved in startups or doing things related to startup activity or your startup’s market focus every day? It has to feel relevant.
Rule 5 – Is your advisor committed to you, or are you just a notch in their belt?
I see many startups who knock on our doors who have a “part-time” advisor. I question whether or not the advisor who has a full-time job elsewhere has received permission from their “day job” company to actually advise.
Do make sure that the proper releases have been obtained from the full-time employer of the advisor. As a general rule, it is advisable to make sure you have a good lawyer and sound knowledge from other fellow startups.
I have seen advisors listed who I know personally have not obtained their full release. In one case, it was particularly ugly when the employer demanded that all forms of IP be handed over because his own advisor contract was subject to an IP restriction.
There are a great many good advisors. Frankly advisors are a pretty essential function.
Choose someone you can trust. Don’t just choose them because of their “resume". You are going to need them to be part of your team, so you had better be comfortable and feel good about the chemistry.
The short version: Before anything, understand your advisor. Use the questions above to help you check her/him out. Classify them into one of the above-mentioned camps. Perhaps more than one attribute applies.
Sadly there are a bunch of charlatans and people who do not have your best interests at heart. At some point it is a business for them. This is not necessarily about altruism and fluffy bunny slippers.
As a metric of success or failure, at our accelerator, we typically speak to 150-200 startups a year, but are quite selective. In 2015, we did not agree to take on any startup. Why? There was basically no one that we really liked. None felt good. Many of the startups we spoke with had taken bad advice.
Startups: Beware false prophets.