Do advisory boards [do any] work and how do they work?
The obvious answer is that experts in a particular field – often academics without commercial conflicts of interest - are invited to join a technical advisory board or TAB and in return for a small fee they meet periodically to provide their experience, expertise and sometimes plain old gut feelings to the company's engineers and management. Or perhaps for a similar fee they make themselves available on the end of the telephone or on email to provide consultancy or access to networks of other experts or even potential investors.
Or perhaps it isn't such a small fee?
Of course, there is always a temptation for the advisory board members to take the fee but provide a minimum by way of consultancy. After all, having already spent the fee, who wants to get on a plane and spend a day sorting out someone else's problems.
However, sometimes I wonder how often these technical advisory boards do meet or whether a few famous names on a startup's website listed as forming an advisory board are there to serve a marketing purpose. The marketing message being: "These engineers/academics that you have heard of have looked us over and take us seriously, so you should too."
I am prompted to ask questions about advisory boards because of the news that energy harvesting startup MicroGen Systems Inc. (Ithaca, New York) has attracted three well-known semiconductor and MEMS industry pioneers and executives to join its advisory board.
They are: Timothy Davis, co-founder and CTO of Kionix Inc., a division of Rohm Co. Ltd.; Kristofer Pister, a professor at University California at Berkeley and co-founder and CTO of Dust Networks Inc., a division of Linear Technology; and Matthias Wagner, a founder and former CEO of Redshift Systems and Aegis Lightwave. These three join a number of other industry and academic experts already in place on the MicroGen advisory board.
Having met and spoken with MicroGen CEO Robert Andosca in the past, and having been fortunate enough to moderate a panel discussion at DesignWest 2010 on wireless sensor networks in which Kris Pister took part, I feel sure that this board will provide excellent service and help propel MicroGen forward.
But I am still interested to hear whether readers' experiences have always been positive. If this is such a beneficial and obvious thing to do, why doesn't every startup do it? And where it is done are there hazards and pitfalls? What is in it, apart from the consultancy fee, for the advisors?
Other questions that spring to mind include: how often should an advisory board meet and what sort of information and problems should be put before it? Perhaps most importantly is what is an appropriate level or remuneration and how should that be organized; perhaps as a daily rate for time spent advising the company? What are we talking about here: $1,000 plus expenses, $10,000 plus expenses?
If you pick your TAB such the members can help, they absolutely work. Since they are not employed by the company and paid in stock or cash or both and are independent, they are the best sounding board that you can find. They can agree or disagree with the CTO/VPE without fear of retribution, and that's why it is important to have a strong TAB. Who else will say "won't work this way, find another method."?
I agree, the members of the board matter the most. If you stock it with yes-men/women, then you get limited value. However, if you put very qualified people on the board who are attuned with the technology and the users, then you have a very effective source of information.
Just my opinion,
The simple fact is that having all the high powered expertise you need as a startup is usually outside the limits of your spending. To that end, an advisory board, whether technical or management can make a lot of sense.
Critical to success is also the lack of ego of both the employees and board members.
The effectiveness of an advisory board can also be conditional on how well the management within a company operates. No matter how strong the board is, if the communication is not effective both down and up, then no matter the power of the board, it is not going to work, it may even be counter productive by setting goals or directions that are outside the capabilities of the company and/or not well aligned with potential product directions and effectively killing time to market.
Why this blog? Just to ask questions of the readers what they might think? What is the purpose of that?
Is there something wrong with a company getting advice for their product, strategy, market, or competition? Should they keep their blinders on and plunge forward without considering outside views?
Is the problem that the advisors are being paid? Is $10K too much to be paid to steer a company from making a $10M mistake? Should the advisors work for free? Would you?
I guess I should quit reading blogs. (Sorry, that wasn't a question.)
The purpose is that in answering readers -- from their own experience -- may shed light on technical advisory boards and how [well] they operate.
Usually these things are kept pretty close to the vest.
There is nothing wrong with a company getting advice from an advisory board.
There is no problem with advisors being paid. Sounds like $1 million would not be too much to steer a company from making a $10 million mistake. But these things are hard to assess.
There is no should or should not about working for free. It is a personal choice.
I have been known to work for free (volunteering), for paid remuneration.