Ryan Rutan: Welcome back to their episode of the Start Up therapy podcast. This is Ryan Rin from start ups.com joined as always by my friend, the founder and CEO of Start ups.com. Will Schroeder. Will I get asked the question a lot? And I'm curious to see, I would imagine you do too, but I get asked about how do we find advisors? Do we need advisors? Where do we find them? Are they worth it? Does this come up in your, your world as well as mine?
Wil Schroter: Nonstop with good reason? Right? Like no one knows what they're doing and everybody needs to be more connected. So finding an advisor makes a ton of sense. Here's what's funny though most people, when they think about getting advisors, they actually either one don't understand what advisors actually do, which I probably talk about that as a prelude, but they also don't understand actually how easy it is to recruit really good advisors when I say easy. I don't mean there's zero work. I mean, the people that you'd probably want that, you think it would be a tough get short if you're trying to like recruit like Elon or Bezos or something like that aren't that hard to get, you can go pretty far up the chain. There was a phrase when I was in high school that the pretty girl never gets asked to the prom. The thinking behind that phrase was that every person thinks that they're, you know, not worthy of asking her to go to the prom. So no one asks her. So potentially nothing happens. Oddly, that actually happens with a lot of advisers as well, right? Where no one asks them because everybody thinks that they're so in demand also. I never got asked to prom. But I think it's because I'm so pretty that, you know, clearly willing to ask me clearly only explanation. There is no other plausible explanation. I'm
Ryan Rutan: gonna ask our buddy Craig about that. He probably remembers.
Wil Schroter: That's true. I forgot one of the other founder group members. We found out that we were both lived in Connecticut at the same time and that we checked middle school year books and we were in the same middle school at the same time, which was crazy to think. Uh he's out in, in San Diego now if I recall anyway. So I think what we need to first talk about is what's the role of an advisor? Like what are we trying to get done with this person also? What is it not what? Yeah, I
Ryan Rutan: think that's super important. Super important. Yeah. Yeah. Yeah.
Wil Schroter: Why don't you kick off with what? It's not,
Ryan Rutan: it's not a co-founder, it's not a W-2 employee. It's not somebody who's going to, uh, to introduce you to everyone they know. You know, it's not unfettered access to their rolodex. It's not someone who understands your business better than you do. They might understand certain aspects of it better. They have their own experiences. But ID, the list of what it's not is way longer than the list of what it is. So I think the important thing to remember there is that they, there's somebody who's gonna pop in and pop out of the business with some frequency, right? But, but they're gonna be popped out far more than they're popped in. And so you have to temper the expectations and be really clear about the, the ask and so forth. But we'll get into that when we start talking about what they are for me again. The list is so long I don't want to go through it comprehensively, but they are not somebody who's going to be at beck and call. They are not somebody who's going to be paying attention to every detail. It's your job to crystallize the really important stuff and get it to them for specific feedback and that's what they are.
Wil Schroter: You bet a lot of people confuse the term advisor with director like a board of directors. When I say you should have a board of advisors, they think of something very formal and they think of, oh, these are people that are going to boss me around and tell me what's you? Absolutely not right. Their job is to help you not to, to direct you so to speak. That's totally different structure. If you have a board of directors and you have other investment and the stakeholders, this is a totally different discussion even then you want to pick the right people. But they usually come with who, who's ever writing a check. So it works a little bit differently within advisors, which we kind of all need. I think the concept looks something like this for people doing it for the first time. I think the concept looks something like I'm gonna find this Yoda like person and they're going to have all this incredible knowledge and they're just going to sit back and tent their fingers and tell me, you know, the ways of the world and that is actually about 4% true. It's the other 96%. Not so much, like just at a high level. Here's a couple of places where that myth just kind of falls apart. Number one, we assume that they actually want to spend a lot of time with us. They generally don't, they've got other stuff to do, right. They don't have the time to be sitting around thinking about our business. We are a moment in time at best, at best. Well,
Ryan Rutan: just think about it mathematically for a second will think about it mathematically for a second, we'll get into compensation later. So I don't, I don't want to steal the thunder from that part of the discussion, but let's assume that there's somewhere between a quarter point and one point of, of equity and compensation. Just rough averages. This is where we end up. They're a quarter point. Ok. Meaning that at best they should be spending 0.25% as much time as you're in your business. Except remember, the reason you brought them in is that they have more knowledge than you. They understand things better than you do, which means that their market rate is probably higher than yours, which means that, that compensation they should, would require even less of their time. So just mathematically, let's keep in mind how much time they really want to spend with us and how much time they can afford to spend
Wil Schroter: with us. Absolutely. I think one of the most common uh issues that people get into when they're recruiting advisors, they recruit for what they need. Right. This minute, classic example is recruiting an attorney. Right. I need a
Ryan Rutan: screwdriver. I hired a carpenter. I, I married a carpenter. Right. Exactly.
Wil Schroter: Right. Right. Uh It, and everyone says the same thing like, oh, yeah. Well, oh, I got an attorney as an advisor because I have questions about intellectual property and we have to do formation. We have to create our initial contracts. I was like, and then why are they still on your, your board of advisors? There are people that you have specific questions for a great example, is a subject matter expert, right? You find somebody that's a subject matter expert in your industry and you immediately think to yourself, I need to lock that person in his advisor because they can tell me all kinds of stuff. Here's what's actually going to happen. You're gonna go to them and at first, everything they say is magical because all stuff you don't know. Right. But after like the 1st, 2nd and 3rd rabbit, they pull out of their hat, there's never 1/4 rabbit, right? Or rarely. And you realize that you just gave a person like a, a permanent spot in the company for a moment of
Ryan Rutan: knowledge, a moment of knowledge. It's like buying an album and then playing it and expecting it to somehow have different songs later. It never, it's gonna have the same songs, right? Get a subject matter expert. That's what they're good at, right? And if you like, listen to that song over and over again, cool. If not, you probably didn't need an advisor. Let me make a subtle distinction here too. And this is something that I actually, you know, I'm, I'm sure the same for you. We get asked to be advisors all the time. My typical response is how about I just be a helpful friend instead? And when you have questions that align with my expertise, ask me and they're always like, I can do that. Like, that's sort of how it works. Right. Don't you have other friends who sometimes you ask them things like, yeah, why don't we just have that relationship for now? If it turns out that it needs to be something more formalized, then we can do that. But in most cases, because I'm a subject matter expert, they need answers to some questions. Sometimes they don't need me to hang out with them all the time on intervals. It's just not necessary
Wil Schroter: that says truly the case. And I tell people the same thing, I was like, I have a couple of things, a couple of places that I could help you and I'll just help you, by the way, you could ask people for favors, right? Like you can just do that. We don't necessarily need to go full guns and lock them in. Now, one of the reasons that people like to do this and this is why it comes up a lot for me because I um review pitch decks at start ups.com is because people want to fill out their team slide.
Ryan Rutan: Yep, they want that credibility
Wil Schroter: boost. Yeah. Yeah. They want a couple of logos or names that, that show that, that people bought it. And by the way, it's a great strategy, which is also why we're doing this episode about recruiting these rock stars. So you can understand how to get them, but just keep in mind that two is a moment in time, right? So while we're saying, hey, here's, we're gonna show you some great ways to get kick ass advisors. We're all gonna caution you as we always do because we're always here about like just taking the Pixie dust off everything. We're also gonna caution you to say, don't sell your soul for a moment in time, right? Yes, you need to raise money. Yes. It's super important. But once you're done, you don't need to raise money with that person at that time, they kind of don't have any value anymore. It's like paying an employee that only works for one week and then keep him paying him forever because you might need him again someday, right? It's not a great
Ryan Rutan: idea, a great strategy. Ok.
Wil Schroter: So, so with all that said, everyone wants to know, how do I get a rockstar advisor and meaning someone that you actually don't think you could get. And here's the funny thing. I, I I'll give you a little story. One of the things that's always been kind of like my trademark is doing the stuff I'm not supposed to do, just like generally like, like, like, like punching outside my weight class, right? One of the things that really helped me early on in my career, like when I was 19, starting an interactive agency was I would call on major CEO s of like Fortune 500 companies, I'd call them directly. Like I'd, I'd call them after five o'clock on a Friday and I'd try to bypass their secretaries and call them. And a lot of people would be like, man, that's ballsy. Guess what? I actually didn't know anybody. I didn't understand what a Fortune 500 co was. So I didn't know I was calling a Fortune 500 CEO. Right. I just, I, I saw his or her name on some list or, or Orchard magazine or something and I just called, I literally didn't know who they were. Right. But because of that, I landed in some of the first web business at places like IBM and Intel and mastercard and in, in all these places that I had no business being in what I would learn afterward is that the trick to all of this is just being willing to ask. Yeah.
Ryan Rutan: The worst you hear is no.
Wil Schroter: Right. Exactly. Exactly.
Ryan Rutan: Cases I heard. Yes. In other cases, actually, one of the best advice I ever got came from a no, from one advisor whose answer her answer was no. But here's someone I think would be perfect for this. And she had reasons why she said no, she was like, no, because of this, this and this. And actually I think this person would be better for you. At first. I thought it was a bit of a blow off. Turned out to be absolutely the right answer. At the time and worked out wonderfully for me. So again, that never would have happened if I hadn't asked. It
Wil Schroter: was like, circa like 1997. It's just, you know, early days, maybe 98. I called a guy named Brian Markinson who was the president of Bristol Myers Squibb, the pharmaceutical company. And I called him again. I think on a Friday, his secretary is gone. He ends up picking up the phone. I talked to him directly convince him that I need to be out there next week in his office. Right. There's no reason in a million years that guy would have ever spoken to me. Right.
Ryan Rutan: Particularly if he'd been given a warning,
Wil Schroter: had anyone else answer the phone? That would have never happened, but because I was willing to do it right. And, and we ended up landing a huge contract with them, right? And it ended up being a really big deal. Now that said I started to learn kind of how few people were willing to make that call. And I started to think it was really interesting years later when we were starting to afford it and we were raising money. I'd moved to Los Angeles. I didn't know anybody. Right. And so instead of just sitting around hoping I would meet somebody at networking event, I just went down the list of all the people that were CEO S of, of and founders of start up companies or investors etcetera. And I did a super weird thing. I called all of them, called them with a phone, a phone
Ryan Rutan: machine for those of you who don't know that thing in your pocket, that little computer you carry around, it can be use to dial someone directly. Uh We can explain what dialing is in another episode. Yeah, they're fun.
Wil Schroter: So we ended up getting all kinds of, you know, fantastic, like tier one investors and, and advisors, et cetera. Not be, nobody had any idea who we were. I just want to be clear. Right. You know, a lot of people like, oh, yeah, but you knew a lot of people and you know, I was some from Ohio. Nobody had any idea who I was. Right. But they were like, yeah, it's pretty cool that you called. I see that now when people like, seek me out, I always respect the person that's willing to kind of go that extra mile and seek me out and, you know, try to get an audience, et cetera. I also have been on the other side of it. I can kind of tell what I'm being baited. Right. But I always respect the, the game on their side, right on this side. Uh When we're recruiting advisors, I think what we lose sight of is that the bigger the name, the fewer the people that can get to them,
Ryan Rutan: the fewer people that even try to your point, there's more people want to, but less people even make back to the pretty girl at the pro ana, this is where that starts to happen. Right. The more important they become, the more visible they become, the less likely people are, people believe that they'll be able to engage with them and it's just actually not true. They haven't changed as much as you think.
Wil Schroter: Right. Agreed. Agreed. And a big part of it too is what we might think are superstars, like, you know, rock stars, like these kind of celebrities, if you will kind of are like, they're only like big time rock stars to us. In other words, if you're going after Elon or Jeff Bezos, yes. Right. Like you're not gonna get him, right. Pretty
Ryan Rutan: much if they have a security detail, they might be out of your reach, ok? If they don't, probably, it's probably worth
Wil Schroter: calling and even then it wouldn't prevent me from trying. That said that said, right. Uh Not security detail, but like I said,
Ryan Rutan: the 64 £280 guy
Wil Schroter: would actually prevent me a lot of times the rock star in your industry is like a senior VP at, at some company or they, they are uh somebody that's got, you know, a million followers on tiktok or something like that. So again, they're only a rock star to you and as soon as you go outside of that bubble, like they're nobody to anyone else. Right? Ask
Ryan Rutan: some of your friends who aren't in your space, what they know about them? The answer is probably who, right.
Wil Schroter: Like in our space. A good example is Tim Ferris, right? Tim Ferris is awesome. Right? And he's fairly well known, but my wife who's super smart and connected has no idea who he is. Right? Like, and, and again, and, and she's a hop, skip and a jump from that world, right? As you go up the chain, as you get to essentially more and more influential people, you've got kind of two camps here. You've got a camp of people that are also highly visible. Tim Ferris would be a great example of that, right? So Tim Ferriss get hit up by everybody for everything most likely because he's so visible. You have another camp of people who aren't as visible because Tim Ferriss all over social media and everything else, right? But you have another camp of people who just don't have that kind of visibility, the senior vps of whatever company, right? They don't have a million followers. They're just some person in a room somewhere that that's working at some major company, right? Way easier to get. Why are they way easier to get, not just them but just in general, the these rock stars one because no one asks generously. You'd be shocked how few people ask. And two because it's cool to get out. It is, it's very
Ryan Rutan: flattering. I'm happy every time it happens.
Wil Schroter: Well, you and I, and the rest of the team here generally, you know, have to turn people away. Like I, I, I'm an advisor in zero companies only because I don't think it's fair. Otherwise I'm getting the, the thing of trying to explain to people why I picked this company versus that company. Not interested, regardless, regardless. I think for a lot of people again, the, the rockstar advisor that you're thinking about, they're probably not getting asked a lot. And when they do, if you ask somebody like, hey, I want you to become my advisor and we'll talk about how to ask in a second. That's a cool thing to ask. It's complimentary as hell. So why do I say yes, here's why I say yes. A lot of people don't understand this. It's an ego thing. 100% 9 times out of 10. When, when advisors, people who are advisors to companies are talking about their start ups things, they're advising, they're doing it with pride, they're doing with pride because they like to brag if you will, right? Whether they say it or not, in regards to their humility, they like to brag about who they're advising. Right. Especially if that company is doing well. Feels good. Absolutely right. It's, it's their Lamborghini or Birkin bag, right? It's that thing, you know, that they can kind of brag about or show off, right. So when you get asked that by interesting companies, it checks a few boxes as an advisor. One. It's something new and novel which we all love. Yeah. Right.
Ryan Rutan: Especially in our
Wil Schroter: space. Yeah. Absolutely. Absolutely. And, and so I might be senior VP at Google in whatever I'm doing in a certain space that would make me a rockstar advisor, but maybe I'm bored. Right. Like, I'm looking for something interesting. Something new. Someone comes at me with a fashion line which seems way outside of the range of what I would do. I might look at it and go. Damn. That sounds fantastic. Right. Like that's actually, that'd be a great departure from what I'm doing. Fun.
Ryan Rutan: Interesting. I'm curious. Right. Peaks curiosity. It taps me on the ego. Right. All of it feels good.
Wil Schroter: So, one of the buttons around curiosity is novelty, the opportunity to do something new, right. Which we all engage in every single day when we watch a TV show, when we engage at a dinner, whatever the opportunity for something new. Right. That's very real. It's very attractive. The second thing is to be called on for something that you care about and be able to talk shop on something that, you know, you're an expert on you and I get to do it all day long and it never gets old. Right. I've got 11 calls today with founders back to, back to back. Right. And it's awesome because on every one of those calls, I get to help somebody in some meaningful
Ryan Rutan: way in things that we actually care about. Now. It feels
Wil Schroter: good. Right. It feels good. Right. And it makes me feel good about what I've learned and what I can teach. So I think when we're asking why they're saying yes, that's a hot, but the third one, the third box, it checks that I wouldn't say is the primary motivator. Even though everybody thinks it is. It's upside. Right. I might get involved in this and it might become the next Uber. Probably not. Right. But probably
Ryan Rutan: not odds are no. But that's why we play odds.
Wil Schroter: You bet. But I think a lot of people think, well, I can't talk to that person because my company is not far enough along and they won't think they'll be able to get the Roy. And the reason I'm bringing that up last is I don't think you understand. They're typically saying yes for the first couple around novelty or around an opportunity, etcetera. It's like if it pays something even better. Right.
Ryan Rutan: It's icing on the cake at that point. Right. Right. Right.
Wil Schroter: You know, something that's really fun about everything we talk about here is that none of it is new. Everything you're dealing with right now has been done 1000 times before you, which means the answer already exists. You may just not know it, but that's ok. That's kind of what we're here to do. We talk about this stuff on the show, but we actually solve these problems all day long at groups dot Start ups.com. So if any of this sounds familiar, stop guessing about what to do. Let us just give you the answers to the test and be done with it.
Ryan Rutan: Yeah, it, it goes back to like, what are the reasons they would say no? Right. Because if we flip that around and we start to look at that from that side and like, OK, you clearly respect my, my authority in the space. Do you think I have something to offer? What you're doing is interesting and cool. No, I I'm out and you want to maybe offer me some, some compensation that probably won't happen but might in return for a little bit of my time. That will probably be enjoyable to me because that's the other thing. I, I think this doesn't get talk good enough either when you think about it, you and I, we do this professionally. Like we do this all the time. We're constantly advising founders. We may not be advisors formally on the board, but we're advising founders pretty much constantly. We're doing it right now as we speak through a podcast. It's fun. We enjoy it, right? Like that interaction, like not just the the ego hit, not just the curiosity, like we get to flex a muscle, it's like, you know, ask Michael Jordan to go play some basketball, right? He likes to play the game a little bit different scale, but he likes to play the game. We like to play this game. We like to exercise the things that we know how to do and flex the muscles that we have. This is an opportunity to do that and it feels
Wil Schroter: fantastic. I agree. So, so let me build on that. A lot of people say, well, how do I make that ask? Like, you know, because here's how we picture it. We picture going after our rockstar advisor in the form of a proposal. Like we're like, we're literally proposing marriage, right? Will you please be my advisor forever? That is not the way to go about it in the absolute perfect analogy here is if you were to say I wanna my life partner. And so I'm just gonna email people and ask them if they, if they'll marry me and see how it works out. It's not the way this goes. Will you
Ryan Rutan: customize the proposals at all? Will or is it gonna be just sort of a, a
Wil Schroter: dear first name? What
Ryan Rutan: if more than one person says? Yes. What's the filtration process look like? I'm very curious about this now, then
Wil Schroter: we got to move to another state that allows for that, I guess. Um But he here's the thing. We often think that this is like this full on pitch for a proposal. That's not the way to ask the way to ask is ask a question, think about dating, right, for a whole bunch of reasons and we're about to dig deep on this. But like there's a whole bunch of reasons that you wanna start with just asking questions, essentially asking for advice. It's so
Ryan Rutan: funny to me that people don't start with that because what is the purpose of this person in the long term? Right, to answer questions and give advice? Don't you think maybe you'd want to start with some kind of a lightweight test to see whether the questions are answered and whether the advice is good. Just maybe we're
Wil Schroter: gonna go through a bunch of reasons of why we have to do this no matter what. I'll start with the first one. If we just go guns blazing with, you don't know me from Adam. When you join my board, it's just never going to happen. You clearly
Ryan Rutan: not put any thought of this. You didn't tap my, you, you didn't do any of those fun things that make me want to say yes. So I'm gonna say no, I'm just gonna ignore
Wil Schroter: you. So the good news is you don't have to do that. I think that's at some level how people tend to kind of consider it should be a relief. Yeah. Yeah. Again, it's a good news is this is not the way it goes. Here's how we do it. We always start super simple. I have a question. Would love to ask you. Can we talk about it. Now think about that for a second. If I'm not willing to answer a question, do you honestly think I'm gonna be your advisor? Right? Second more often than not. And, and, and we kind of touched on this a moment ago, what you think? They know, they don't really know what you think. Like this body of knowledge, this perspective, this connectivity, whatever you think it is, there's like a 90% chance, It's not what you think. It
Ryan Rutan: is not what you think, right? May still be useful but maybe not in the ways that you think or maybe not as much as you think, which might influence the decision, right? Let
Wil Schroter: me provide some examples, right? I go to the CTO of some red hot company that I think is awesome. I'm gonna get her advice on how am I going to, to um build the infrastructure for my product, right? I finally get her on the phone and, and I, I start asking these questions and she looks at me like I have two heads and I'm like, what she's like, I haven't written code in 20 years, right? I'm a manager. I sit in meetings all day talking about like strategic decisions. I
Ryan Rutan: talk to the bosses of the bosses, of the bosses, of the people you actually
Wil Schroter: talking to and I was like, wait, but you're the CTO they're like, yeah, you don't really know what my job is though, do you? And I'm using that as a simple example that happens all the time. I give you another example. You go to a founder and they, you're the founder of an exact business in your exact industry and you think they're gonna be again, this, this Yoda like, you know, Buddha knowledge of whatever your industry is. And they're like, yeah, we did it this way, but you do it that way and it's just not the same. Right? Years ago, I was at an event with Jim Grody, who's the founder of Donato's Pizza. And I was sitting next to Jim and I had like a million questions for him because it's just such a, you know, dynamic, fantastic business. And finally he stops me. He's like, dude, I haven't run this business in like 20 years,
Ryan Rutan: twice a year for commercials. Yeah,
Wil Schroter: exactly. And, and, and he's such a nice guy. But like, it's funny because in your mind, like, if I wanted to start fast food chain or if I wanted to, at a pizza place or anything like this is the guy, you have to give yourself an opportunity to find out to find out exactly who this is. You gotta date people, right? And they more importantly have to date you. The way that starts is just with questions. Ok. So the, the first thing the questions do is they find out whether you're gonna have a conversation at all. Yeah, if I'm reaching out to you and you're my rock star, Ryan, you are my rock star, right? I know I'm gonna ask you a single question. DM Me on Twitter. Hey, uh, I really need help with this. You know, could you give me some advice if you never respond that tells you something as well? Just because people have the potential to be advisor doesn't mean they intend to be
Ryan Rutan: right. This is why asking that question is great, right? Because again, it's, it's a lightweight to ask if they're not gonna answer it to your point. If they're not gonna answer that, then how do you think it would have gone over if you just sent the formal, uh here's some documents like you sign to uh take a quarter point in my company. Would that be ok? Probably not.
Wil Schroter: Exactly. The second part is the reason people become your advisor is because they like you. Exactly. They haven't had a chance to talk to you. Everybody thinks it's just the value of my idea. It is not in fact, investments the same way investors will tell you that. Yes, we evaluate the idea, but we're really betting on the person, the team. And so if the team comes across like a bunch of jerks, right? We just don't want to be in business with them, right? We're investors. That's our
Ryan Rutan: job. But it was such a great opportunity. Don't care. Right. At some point, you just realize you don't care. It's such long odds anyways, you don't want to take long odds on jerks. There's no reason to do it 100
Wil Schroter: percent. And so the other side of it is, you know, when we're having these conversations, et cetera, we finally get a feel for who this person actually is. Often these are people that we've never really interacted with on a, on a long term basis.
Ryan Rutan: Wait, will the Twitter or Instagram version of people isn't always exactly who and how they are. Is that what you're saying? Oh, it's
Wil Schroter: 100% true. It is truth personified. Yes, he's silly. That was a
Ryan Rutan: paradigm shift. I wasn't ready for.
Wil Schroter: Yeah, everyone's always happy all the time. They all love their specs. So, so I genuinely think that for most people getting those early reps with someone will quickly tell you whether they're that, that cool. Here's what I tend to find. There are a handful of advisors that are just kind people and they're willing to do you a solid by answering some questions. But that is, that's as much as they're willing to do. It almost runs parallel to what you said when you said people ask you to be an advisor where you're like, do you know I can help you? But I'm not looking for another job just
Ryan Rutan: being kind. Yep, I wanna help. I do want to help, but there's some limitations on that and the limitations aren't just in terms of the amount of time I'm willing to give I as the person they're asking for. Help, have the best understanding of how much help I can provide. Right? And so you telling me you wanna hang out together forever and me going, you're not gonna like me after the third party just because I run out of tricks, right? Like you've seen all my tricks now, I'm gonna help you not make a bad decision. That's another way of being kind as an advisor,
Wil Schroter: agreed. We also give advisors way too much credit as to what we think that they're going to do or what they actually know. Right. So we do a lot of things that goes back to my Jim Grody from Donato's thing. I could build a vision in my head that Jim is just constantly innovating in that industry. Or Jim is constantly like, you know, connected at the highest levels and you come to find out like Jim's been golfing for 20 years. He didn't talk to anybody in that industry, right? Whatever, I'm not saying I have to make that up. But like it's important for us to by way of this, do some diligence, there's a very high likelihood that when we go into these conversations, the answers we're gonna get back are not that good. Ok. That's the first thing. The second thing is once you get past your first battery of questions and here's a cool way for folks that are listening to prepare for this, come up with five things that only they could answer, right, that are unique to them, that their perspective or, or their answer would be particularly useful. Ok. Start with one, try to go into a few more. If by the time you get to the fifth one, they still haven't given you much of an answer or anything useful. Do you see what, what you, you'd have just lost by giving them a stake in your company or anything else like that? Most advisors, by the way, can't answer more than five questions. Why? Because it's very rare that what we need to know goes beyond those five questions. The attorney is a great example. I go to the attorney and I need to learn about intellectual property, you know, in licensing and stuff like that first question I ask him, I've got this idea. Could I patent it? Absolutely. How long would it take a patent process is probably gonna run you for this? About 9 to 12 months. How much would it cost cost you? $30,000? Ok. What do I do from here? Well, we started an engagement letter and we charge you a bunch of money, blah, blah, blah. And I'm like, ok, well, I know how long it's gonna take and it gonna cost, that's probably not valuable to me. So all the other knowledge this person has on a patent that I'm probably not gonna file doesn't matter, doesn't
Ryan Rutan: matter it's also just, you're also just gonna pay them for that at that point. Right. That's knowledge you're just gonna pay for. It's not an advisor level thing. You don't pick up an attorney advisor to write your and, and file patents for you. Right. That's not going back to what they don't do. Great example. They're not going to do that as an advisor. Right. They'll do that as your attorney, which you pay them for by the hour.
Wil Schroter: Yes. Getting advice doesn't necessarily require somebody to be your advisor. You can just ask for advice. And frankly, that's, that's what you want to do anyway. So when, when we zoom out a little bit and we say, how do I ask? You? Start by asking for advice, you start by having a conversation, you start by showing that you ask good questions. More importantly, listen, because what everybody wants out of somebody that they're going to advise is to know that they're being heard. What they don't want is a no at all. Right? They don't want somebody to say, oh yeah, of course. I knew that right, blah, blah, blah. Even if you do know that. Shut up.
Ryan Rutan: Yeah, exactly. What is the value in that response? Right? I don't need to know that you knew things that I told you. If you knew the answer to that. Why did you ask me that
Wil Schroter: question? Yeah, you called me, man. You're
Ryan Rutan: Yeah, you called me. You're driving this train and if you already knew how to get where it's going, then why the hell am I here? Yeah, it is a super, it is super frustrating when one you get asked questions, you give answers and then people seem to have already known the answer. Cool, great that you came to me for confirmation. Google is also great for that two when you do put time and effort into and then you see people without any feedback or reasoning or, or justification, they don't seem to heed the advice, right? And that can be super frustrating as well. But I let me circle back on something just like when you're asking these questions, what always gets me is when I find the questions interesting, right? Give me a puzzle I wanna solve, right? If you want to pull me into this thing, give me a riddle that I can't avoid helping you solve because it'll be fun for both of us. You'll get something you need out of it. I'll get something I need out of it. And this really goes back to like the the whole thing of just like getting to spend that time together going through these things. This is where that affinity will come from. This is why we'll start to like you and this is what will allow us to explore the possibility of that longer term relationship,
Wil Schroter: right? So seek out advice and then at the end of that trail, see if you have any advisor left, getting
Ryan Rutan: advice is this is the seeds to growing advisors, right? This is where it
Wil Schroter: comes from. Absolutely. Now a lot of people, the reason they want to bring on advisor is because they want to be validated. The thinking goes, if this person is willing to join my advisory board, then they must think this is a good idea, which I can then use that value that social proof to go raise money with that to go convince people. And by the way, there's some truth to that. Yeah.
Ryan Rutan: Imagine what Air Jordans would have been. If they were just called Airs, they would have sent me some shoes because it was Nike. It still would have worked a little bit but it wouldn't have become the thing it became, right. Those type of endorsements are powerful.
Wil Schroter: They are, they are, but they are an after effect to what we're trying to do. We want endorsements for people that are actually helpful. Getting a bunch of people that are attached to this thing through some bizarre manner that don't actually do anything is a huge waste of time. I'm guilty of that too. Sometimes. Sometimes in the past when I've got involved in things, I made a commitment, you know, as an advi or whatever, I just got distracted with other stuff. So I didn't fulfill my end of the commitment happens all the time. We were talking before the show about you know some of the advisors that we have for start ups.com. I haven't spoken to our advisors, like, in five years, they're all phenomenal. Right. But I just haven't had anything to ask them about. We got our five questions. Yeah, pretty much. Right. And that was 12 years ago. So anyway, for a lot of these folks, the ask is just a conversation, right? We date them and we eventually ask. So inevitably when, when people say, well, I'm gonna ask this person, what do I offer them? Everybody wants to know what's the com structure? It's a fair question. Uh You don't want to get it wrong at a high level, at a high level. The com structure for an advisor, someone that's just giving you advice or helping you with some key milestones in the business could be introductions for funding could be some early customers, things like that. He is usually between 0.1%. So 10% of a single point or 1% of the company to 1%. Now you'll hear people that got 2% you'll hear people that got 10%. You'll be 20
Ryan Rutan: percent. I'm crying a little on the inside.
Wil Schroter: Yes, it means something when wrong. Here's why there isn't like a minimum wage pay scale for advisors at start up companies that everybody knows, right. It's not common knowledge. So if left to your own devices where you just talk to somebody who seems really influential. Here's how the conversation will typically go. Hey, that sounds cool. I'd love to be your advisor. I'm thinking like, 5 to 10%. Not because they're jerks because if you had any other, why wouldn't you just say 5 to 10%? Wait 1%. Sounds like nothing. Right. Like, why would I propose? Like, if I was this rockstar advisor, 0.1% now, 0.1% any company that's ever made, it is worth a fortune, but 0.1% on its face sounds terrible. Yeah.
Ryan Rutan: Well, at the moment in time when a company is worth $0 kind of doesn't matter what the percentage is at that point, when it's worth very few dollars, that percentage is miniscule, right? And it sounds like that, but that's not what we're buying into. So
Wil Schroter: generally speaking, uh if you're giving away advisory shares for a single advisor, you're typically talking about 0.1 on the absolute lowest end in about a point, sort of on the upper end. Again, your mileage may vary. You may have situations that changes. I just want to give you some sort of baseline to work with. So you don't go out there giving everybody 10% to be an advisor.
Ryan Rutan: Great news. We got 12 advisor, bad news. We gave each of them 10%.
Wil Schroter: I nailed
Ryan Rutan: it. We own negative company at this point. I don't know how
Wil Schroter: correct. I also think the moment you're about to pay someone there needs to be a give and get just saying, I'm going to be an advisor isn't enough to get paid to be an advisor. There have to be expectations. Now, a lot of people will think about the expectations being a function of time. I need one hour, a quarter of you, you know, to attend our board of advisors meeting or something like that and you couldn't do that. There's nothing wrong with that. I ideally if you're going into this, your asks should be more transactional. And, and what I mean by that is you should be asking for something that can be measured and couldn't grow the business like investor introductions, like customer introductions, like something that they could produce. Like if they write code, something like that, that they could produce, that would help the business along. It's really tough to quantify, just answer the phone when I call you.
Ryan Rutan: Yeah, I had this discussion with the founder a few weeks ago where we talked about developing OKRS for advisors. They were going through this list of people that they were considering for advisors and said, OK, what's the objective with this one? What's the objective with that one? What's the objective with this one? And once we got through that, we never down the list significantly to the ones that would actually matter to drive the business outcomes that were most important in the short and midterms. And I said, ok, now that we've decided that these are the most important objectives? What are the key results that will actually help you to get to those objectives? Not enough to just set that goal because there's nothing that says we'll get to that goal. Now, what are the steps, you know? OK. That's what you want to happen in this year. And we talk about this all the time with our staff, we talk about that. We talked in the podcast. What's gonna happen this week, right? Or what's gonna happen in the next interaction with that advisor, what's the first thing they have to do? So that, that that objective starts to become a little more true, right? Because at this point, it's speculation. So I think it's really, really important to truly consider. Not just because I think if we just pick on the, you know, if we go back to the, we're, we're using rockstar here, we just go back to the rockstar like OK, you said, you know, the red hot company, this is the CEO cool, what is it? We actually want them to help us do beyond just be them and their company because that ain't gonna happen, right? We we're gonna just duplicate ourselves. So what is it we're actually trying to achieve? And I think that makes this decision a lot easier also helps you think about the compensation a lot more clearly because now you have some understanding of what is actually worth to me, right? I don't just need somebody to validate my feelings about my company. I need somebody to help me achieve some particular objective, or at least that's what you should be
Wil Schroter: doing. In 2007. I had, I was on a bunch of boards. Right. And I, I don't know what back then. I, I had never really been on boards before, like, actual, like, real boards and I didn't really understand what it involved,
Ryan Rutan: what it meant, get asked, say yes. Yeah,
Wil Schroter: pretty much. That was pretty much what it was. And, and so there were two that I was on at the same time. One was a, a publicly traded bank. First Merchants Bank. Right. Well, we got bought by first merchants. So I guess it's now first merchants and that had very specific things that I need to sign off on or whatever, you know, to join the board of the bank mostly because disclosures and, and, and stuff, but they never really told me what I was supposed to do there. No one was ever very clear. Right. Will
Ryan Rutan: show us your finger tinting. Yeah.
Wil Schroter: Excellent. I would learn later that, like, I was supposed to basically bring the, the bank business. I mean, ultimately that's, you know, as being like a, a start up guy, I was supposed to bring them start up clients which they didn't understand start ups very well. You don't use banks but whatever you
Ryan Rutan: need money then you get bank.
Wil Schroter: Yeah. Yeah. Yeah. Yeah. At the same time I was recruited. This is strangest, a series of events to the rock and roll Hall of Fame up in Cleveland. Right. Oh, ok. They had the most amazing recruiting process of all time for their board members. A friend of mine represented the guy who got brought on as president. Uh, my friend of mine was an agent and he represented him in L A. He moved, uh, this guy moved to, uh Cleveland to, to become the CEO of the rock hall. And he's like, oh, my, my buddy will is in, is in Ohio. You should meet them. He can help you out with internet stuff. And that's kind of how this whole thing got
Ryan Rutan: started internet stuff. I love when I love when that was all the explanation it took because people were on the other side of internet stuff. They're like, they know internet stuff, bring them
Wil Schroter: in internet, go, go. We need internet. So, anyway, their process for kind of recruiting or wooing board members was to give you private tickets to the inductions at the rock hall. Yeah, that'll work. There's two inductions. There's like one induction where it's like public, you can buy concert tickets to and it's huge and there's another one where it's private and there's like 200 people there and you're just there with like the people and their families and I guess, like, run D MC and Metallica and all these amazing indus industry anyway, the reason I'm bringing that up is because at the end of it, they were highly specific as to what the requirements were to be on the board. Right. They were like, it's a million dollars a year minimum, give or get and give or get means. You either give it yourself or you get it from your friends. And I was like, like Jay Z was on the board, right? I was like, for Jay Z, Jay Z could literally do anything and raise a million dollars from his friends. I'm like 34 years old at the time my friends are broke. Like my friends can't even guess. No way. I was like, that's not gonna work out so well for me. But what I remember about that story, the most other Nicole concert tickets was they were so good at being specific about what it takes to be here. Yes.
Ryan Rutan: Yeah. The highly specific as that way they get what they need, not something else, right? They were very specific about what they wanted and what needed to happen to make that
Wil Schroter: happen. Yeah. And in as much as I like concert tickets, I was gonna pay a million or more.
Ryan Rutan: You can, I think you can still get Taylor Swift tickets for slightly less than that, slightly
Wil Schroter: less, right? So I guess my point is what I loved about that process was they said here's all this big opportunity and if you want to be part of it, right? You gotta show up, you gotta deliver, right? I respected that, right? I respected that and, and I actually believe that when we go to these advisors, right? And we say here's what our expectations are, here's what we like. And that being said, you help us shape what you can contribute, but make it clear if you want to invest your introductions, say I we're gonna need investor introductions if you want them to speak on your behalf and, and, and back you up for things. Say it, my personal belief again, having done the different board work is I prefer a board that tells me why I'm there. I get really anxious about a board where I'm like, why am I here? Exactly. Because I don't know how to contribute. And that makes me anxious. I
Ryan Rutan: had this happen a few, few months ago where I was invited to speak at a conference and then I asked her, what would you like me to speak about? And they're like, what would you like to speak about? And I'm like, OK, bye. You're right. Like, didn't you have something in mind when you asked me? Like, wasn't there a thought in your head about you? What Ryan knows? Here's what our audience wants. Let's marry those two things up and put some thought into this didn't happen.
Wil Schroter: Everyone's like, hey, can I pick your brain? I don't want my brain picked that sounds disgusting, right? Like, just tell me what you want, let's get it done because I do want to help that, you know, that that is consistent. All of that said, I think what's preventing most founders from making the ask is realizing that you even can. The second part. I think that that's holding them back is they don't know how to ask again. They think the idea is I'm gonna run around to everybody and, and, and make a marriage proposal from the jump. All you're doing is asking people that you think are absolute rock stars. A question. That's it. That's it. We're just starting with a question and that's where these relationships start. That's how like any relationship for that matter. But definitely these, those that give you a good answer and continue to give you good answers. You build good rapport, they're worth investing in when the time comes to make that investment. We have to be super clear what the expectations are, kind of what the RO I is on both sides. And in every case, we have to keep investing in kind of delivering that same relationship. It's really no different than if we're hiring somebody, right? We have certain expectations. We have a certain Roy that we want and if we're willing to go out for the best person possible, we definitely wanna make sure we do everything that we possibly can to make it work. So in addition to all the stuff related to founder groups. You've also got full access to everything on start ups.com. That includes all of our education tracks which will be funding customer acquisition, even how to manage your monthly finances. They're so, so much stuff in there. All of our software including BIZ plan for putting together detailed business plans and financials launch rock for attracting early customers and of course, fundable for attracting investment capital. When you log into the start ups.com site, you'll find all of these resources available.