22. Matt Blumberg on building and leading a world class board for a startup company

Leading a world class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders.

Matt Blumberg is  the author of Startup CEO: A Field Guide to Scaling Up Your Business, the second edition of which was published last year, and Startup CXO, the sequel to Startup CEO, coming out in May, and also the co-author of the second edition of Startup Boards scheduled to be published in the fall. In this episode he talks about the importance of creating a great board for startup companies.

 

Thanks for listening!

We love our listeners! Drop us a line or give us guest suggestions here.

 

Links

Matt Blumberg Bio

Quotes

 

A great board can be your secret weapon for world-class strategic and operational advice, for access to capital, for critical introductions, and quite frankly, for learning how to be a great CEO. 

 

A so-so board is just a waste of time - and a bad board can kill a great company. 

Big Ideas/Thoughts

I think that really separates startup boards from boards of larger organizations, other than their size, is what the board does.

I always say there's kind of a sliding scale. If you take a raw startup  on one end of the spectrum and a huge public company on the other side of the spectrum, GE or Apple or such, there's a sliding scale where at the very early stage, your board is probably spending less than 5% of its time on governance and oversight and financials and 95% of its time on strategy and product market fit, and then at the other end of the spectrum, the board probably spends almost all of its time on governance and oversight, and it certainly engages in strategy, but not minute by minute.

 

Why is it important to have truly independent members on these boards?

Independent directors may have some stock options to be compensated if the business does well, but they don't have a material stake in the business and they're not management. They typically either current or retired operating executives from the industry or from an adjacent industry. They provide a  third leg of the stool that can bring an independent point of view to the table. They know what it's like to be an operator, but they're not operating this business and they're not heavily invested in it. They can truly look out for sort of the interests of all shareholders.

 

Bolster

Bolster, is a B2B marketplace that is seeking to connect venture-backed startups, venture-backed CEOs, or heads of HR with executive-level talent - vetted and vouched executive-level talent.

We find when we are going through the needs assessment with a client doing a board search, the first two questions we ask: number one, is it important to you that we find someone who's an experienced board member, and number two, is it important to you that we find you underrepresented talent?

 

Most frequently, the answer is yes and yes, and that gives us an opportunity to sort of take a step back and talk about the fact that the talent pool, if you really limit it to people who've been corporate directors or, and in many cases, CEOs, is not going to be a particularly diverse talent set.

 

What we do at Bolster is we try to define and help our clients think through what it means to be “board ready” as opposed to board experience, and there are handful of things that that make you qualified as board ready. One is you've been on a board.  Two is you've been on a board that's not a corporate board. Maybe you've been on a nonprofit board, maybe you've been on a board of a community organization, like the town soccer club or the Girl Scouts or the PTA or the school board