Founder Fundamentals: 💯 Board Updates
Words of wisdom from one of our founding CEOs, Rapid7’s Corey Thomas. We couldn’t have said it better ourselves.
We built our venture fund, Pillar, on the belief that alignment — among founders, employees, investors and board members — is critical to the creation of great companies. And a healthy sense of alignment starts with open communication — getting on the same page to talk through how we’ll partner, how we’ll navigate challenges together, and how we’ll keep an open line of communication along the way.
We won’t always agree; in fact, healthy discussion and debate lead to better collective decisions.
What’s important is to align with your investors on how you’re going to talk about the business together, starting from day zero.
To help our portfolio founders understand some of the approaches that tend to work well from our perspective, we’ve taken the best elements of the board updates we’ve found most helpful, and assembled them below:
High level observations and expectation-setting about the business and likelihood of hitting key business goals for the quarter/year (e.g. competition is heating up, product market fit is becoming clear, have begun to ramp conversations for a new round, etc.).
This is where you share how you are feeling about progress. Usually, it’s never all bad and it’s never all good.
We don’t expect any company to be “crushing it” all the time; in fact, if you never have bad news to share, it raises a red flag. Get the bad news out of the way right up front. Take it head on. You’ll gain respect in doing so. In his book, The Man Who Lied to His Laptop, researcher Clifford Nass proves that people also listen more actively when you start with the bad news first (debunking the myth of the “good news sandwich”).
If you don’t have a plan for how to fix yet, share what you are doing to develop a plan. Request help if needed. Never fail alone.
Celebrate good news, big or small. Your board/investors need an accurate view of how things are going, but they also want to acknowledge wins with you. If you’re getting confirmation that you are onto something, share it.
Distinguish between things that are looking good, and things that have happened.
Discuss new hires, departures, key openings and where you need help. Distinguish between burning needs (QA lead, ASAP) and important, but not urgent, hires (e.g. upgrade Chief Architect). This is where you demonstrate that you are not just focused on today’s issues, but are also thinking about scaling and “muscle-building” the organization. It’s also a valuable way to tap into your board members’ networks.
Product / Engineering
Are we going to hit upcoming delivery dates? Does it look like the product will perform as anticipated? Is the bug count rising or falling? Where are we doing well and where do we need to improve?
Sales / Marketing / Customer Engagement
This will vary greatly by stage. In the early days, it encompasses feedback from prospective customers on their view of your value proposition, customer adoption challenges you’re facing, a sense of where buying budget will come from (target customer). In later stages, share where you think you are relative to monthly or quarterly sales goals.
How’s your pricing structure? Where are you getting stuck? Are sales cycles getting shorter or longer? Companies make years by making quarters, and make quarters by making months.
Summarize the help you need across the categories above. Every CEO should have a couple of key priorities you are focused on at any given moment.
Start there, and openly ask specific board members or investors for help. Put them to work.
From our perspective, it’s better to have flash reports (estimates) on a timely basis than to have “auditable” financials that are only available many weeks after the period. Cash balance, net burn rate, bookings/revenue, fume date––some businesses are more bookings-oriented, others more revenue (or billings-oriented). Align with your investors to identify the KPIs that are meaningful to your business.
But Above All, Communicate!
There’s no one-size-fits-all solution to communication for every founder. Plenty of first-time founders have never seen, let alone written, a board update before. Some serial entrepreneurs have a tried and true approach that has worked well for them over time. Many CEOs like to write a stream-of-consciousness that goes on for two pages. Others just stick to the facts.
The cadence — weekly, monthly, quarterly — and level of discussion are a matter of style. Every startup leader is different. Do your thing.
For what it’s worth, a board update also isn’t intended to be a substitute for phone calls, coffee or beer (never skip a beer!). A good update can be written in 20 minutes––it’s simple and direct.
Ideally, it’s a reflection of what you are thinking about every day. It doesn’t need to be beautifully worded and formatted, it just needs to get your message across.
Pick a style that works for you, and give it a shot. After all, healthy companies start with healthy conversation.
Dig it? ❤ it below.