Thoughts on Advisory Roles

From my days as a consultant to today, some of the most rewarding experiences I've had is advising security organizations and companies.  In the past couple of years, security company advisory roles have been a fairly significant focus for me as I've found personal value in having a hand in developing and driving in solutions that I feel could make a sizeable difference.  While these roles can vary I have identified some consistencies and benefits in them.  For those considering or creating a role I thought I would share my thoughts.

An advisory role is designed to be specific to a need that the company has.  In general, the roles have focused on some key areas.  Most notably Product Mangement, Go To Market (GTM) and Fund Raising.  In early stage companies this can vary mostly depending on the stage of the company.  In order to explain I'll use the basic company funding stages as a framework.

There are absolutely advisors in other various capacities at later stages and even for the lifetime of the company.  However, those are strategic and highly specific.  Some examples could be to help drive into other market locations (China, Japan, etc), deal with regulatory issues such as EU's Data Protection, drive executive awareness such as Fortune 500 CEO's and more.

Company Stage and Role Types

Angel / Seed

Corporate Objectives - In this phase a company is looking to create a basic "proof of concept" or Alpha version of their product and get one or two key beta customers.

Fund Raising (0-10% of time) - Very little fund raising is done by the advisor in this stage.  In some cases the advisory might be or become one of the Seed investors, as I have with SourceClear.  Yet, in most this is a financial and networking skill gap that most operational advisors don't have.

Product Management (30-80% of time) - This is the majority of the value at this stage as the company is forced to be agile in creating their product and must constantly prioritize.  Only fousing on the key features and discarding "nice to have's" is a must to manage burn rate and inject the highest value the can.  As a result the conversations with the advisor as a leading customer is key.  As an the representative of the "buy side" is important to prioritize the overall solution and validation of the problem.

GTM (10-20% of time) - Since the product is very very early stages the concept of a GTM is fairly nascient.  Some light market positioning converstations can be done, however, the overall value is just company awareness of competitors, product capabilities, vertical problems and industry product movement.  However, some assistance for the beta program will come in the form of identifying the right vertacles and selecting a handful of key potential beta customers.  This can also drive into the need to provide a "warm" connection.  This is leveraging the advisors network for an introduction to those known key potential beta customer leaders.

A Round

Corporate Objectives - In this phase a company is looking to drive a larger beta of the product, identify a few key customers, fundraise, 

Raise Funding (10-20% of time) - This will be a larger component than before but not dramatic.  An advisor could participate in the process by talking to key venture capital (VC) partners on the product and validating the problem / solution.

Product Management (20-40% of time) - As beta customers participate and feature development validation occurs more roadmaping with the engineering team needs to happen.  Assisting in defining the problem and designing the solution happens in full swing.

GTM (30-50% of time) - A significant increase in the GTM happens at this stage.  This includes assisting in creating the marketing story, identifying the proper vertacles to prioritize selling, conference value, development of core contacts, etc.

B Round and Beyond

Corporate Objectives - In these phases the company has GA's their product, staffing sales, marketing, product management and more.  This is where the real GTM is applied and acelleration of sales is done in conjunction with the product roadmap.  Since this is the main area of the company hiring the right people for the various product and marketing positions the need for an advisor degrades.  As sales builds out a sales strategy and contact lists the need for an advisor to perform that function deminishes.  The same can be said for marketing and product management.

Advisor Cadence and Learned Rules

Time Consumption - One of the most important things an advisor and company need to discuss is the amount of time the advisor will spend.  As a general rule an advisor should consider spending a few hours a month helping the company (4-8).  In reality it varies.  In the earlier part of the relationship the company and advisor will have a bunch of meetings over the first few months to have open discussions on product placement and solution.  Unfortunately, from there it drops off dramatically do to other priorities.  I recommend a candence of at least one hour meeting a month.  This would include product updates, customer challenges, engineering development questions, etc.  In addition to this, it's very common for adhoc emails for questions and help.  I commonly get requests to review ppt decks, architecture designs, etc.  This will account for at least a couple of hours a month.

Advisor Compensation - Compensation for time being spent can vary depending on the size of the company and stage when the advisory role begins.  Yet, it is typically done with cash or stock options.  In order to align priorities and to manage budget, etc it only makes sense to only use stock options as compensation.

Advisory Length - Length of advisory roles is generally between 2 and 4 years.  In my experience the value of the advisory role changes over time as the needs of the company changes.  A general timeframe for a company to go from Seed through A round is about two years.  With that I suggest having a 2 year role and if, at the end of that tenure, there's still a value of the advisor an additional contract can be signed.

What Makes a great advisor?

There are some characteristics of a good advisor that I've uncovered and been told from CEO's in my years.  The advisor must branch many different components of a business in order to put them in context.

Personality - Even more important than the below three components is an advisors personality.  They have to believe in the product, be objective, open minded, curious and more.  Making sure the advisor is a good personality and culture fit with the CEO and others is important as the ability of a CEO to ask hard and open ended questions is critical.

Operational Excellence - The first thing an advisor needs to be is a great operator in their segment.  This could be a CISO, CEO, CIO, etc and it's that domain which is the true core of what a company is looking for advice on.

Business Awareness - The ability to understand the basic components of building a company and  how to apply them to that particular stage is critical.  Understanding product management and the various components of the sales funnel helps give important context to the operational advice around the product or service.  

Industry Network - Getting that first few beta customers and GA customers are so important.  Having an advisor with an extensive operator network is important to be able to acellerate that process.  However, the network need doesn't end there.  It also includes other companies to partner with, VC's to solicit funding from, reporters to drive awareness and more.