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The Value of Focused Intervention

The Angle Issue #202: For the week ended October 31, 2023

The value of focused intervention
Gil Dibner

Over the past few weeks, we’ve been reminded a few times of the value of focused intervention by engaged and committed boards of directors. Many board meetings can trend towards the mechanical: periodical and largely formulaic updates when nothing of great significance is discussed. In these situations, both the founders and the board members tend to think that the founders basically know what to do and that the other board members are basically exercising their obligation of oversight. This sort of board meeting is common but not very valuable.

In other cases, however, a board meeting can be highly focused and impactful. This can happen in one of two ways. The first way is when a founder asks for a discussion on a specific topic either as part of a regular board meeting or in a special meeting called for the purpose. Ideally, everyone is prepped beforehand and a short deck is used to guide the discussion. When engaged board members come prepared, it’s amazing how much value and perspective they can inject into a conversation. Founders and board members alike need to invest in making a meeting like that useful, but if everyone pulls their weight — listening intently and speaking thoughtfully — the results can be truly impactful.

The second way in which a board meeting can become focused and impactful is when a board member decides to intervene and make it happen, often in response to something said or done by management that triggers a firm response. I was recently involved in a case when management presented a plan that simply wasn’t good enough or clear enough. Fortunately, one of the board members (in this case, not me) had the presence of mind to speak up very firmly and not let it slide. That completely changed the course of the conversation, triggered others to voice their concerns as well, and led to a series of one-on-one follow-up conversations with the entire board. A subsequent highly-focused board meeting called by management revisited the plan and presented what I thought was a much better and well-defined set of goals and forecasts. I’ve seen these sorts of things happen both quickly (as in this case when it took about a week) and slowly (when it can take management months to internalize and act on feedback from the board), but to my mind this is a sign of engaged board that cares.

Focused interventions at the board level can be triggered either by management or by one or more board members — but they are often a critical part of righting the ship when things are adrift. If you find yourself prepared for another mechanical update, now might be a good time to pause and ask yourself: what should the conversation around the board table really be about? On what topic would it be most useful for you to hear where people really stand? As a founder, it’s within your power to trigger that sort of conversation. Do your best to drive that conversation to the places where it will provide you with the most useful insights and the most vibrant discussion.

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WORTH READING

ENTERPRISE/TECH NEWS

AI boosts tech giants. Per the recent quarterly earnings, GenAI is driving real revenue growth for tech giants, like Alphabet and Microsoft. Alphabet’s Q3 results show a 7x increase in GenAI projects on Vertex AI, and Microsoft has seen high demand for its AI-related products — 18k companies now use Azure OpenAI service and there are 1M paid Copilot users. White some may argue that this strong demand for AI products from tech giants may trickle down to GenAI startups, however, as we’ve written about in the past, we believe the GenAI winners will largely be the big tech companies.

HOW TO STARTUP

Outbound automation. Kyle Poyar from OpenView shared a great practical guide to outbound automation. In the post, he highlights the story of Thena, which “managed to achieve the productivity of five to 10 sales reps without hiring BDRs or SDRs”. Kyle interviewed their founders and includes a step by step process on how they run their automated outbound efforts. They’ve successfully managed to automate the process, which allows them to focus on the leads that really matter. Their “goal with outbound automation is to make the system run fully on autopilot for their lower-priority accounts. Then, with the lower-priority motion on autopilot, the team can spend more of their time on focused, personalized messaging for higher-priority enterprises.”

Going public checklist. Last week we shared a short unofficial guide to preparing to IPO. This week, we’re sharing a more comprehensive look at how to prepare a company to be ready for the public market, written by a16z’s David George. Here’s David’s framework for companies that want to determine if they are ready to be public:

  • “Do you have a credible growth story to sustain 20%+ growth in year 6 of your financial model?

  • Do you have the operating leverage and stock burn (annual dilution) public investors expect?

  • Can you accurately forecast your business within +/-10% 4 quarters out — and meet or beat it?”

HOW TO VENTURE

DPI expectations. Ed Zimmerman shares a thoughtful look at expectations for early DPI from seed and pre-seed funds. In the best early stage funds he analyzed, the distributions weren’t meaningful until year 7 or 8 — at the earliest… but then went on to be incredibly meaningful. His takeaway is that “if we’re not patient with the capital we expressly allocate to seed/pre-seed, we’ll be compelling VCs to sell low (into a down market) rather than allowing them to continue to grow & wait out the cycle. Sure there’s risk, but VC is not risk free, nor should VC ever be thought of as a “get rich quick” strategy. VC, at its best, should be a “get rich slowly but together (with founders, execs, etc) & build big” strategy and, for sure, that requires patience for LPs and GPs alike.”

PORTFOLIO NEWS

Firebolt was featured on Luzmo’s list of the best data warehouse tools to explore in 2023.

Vault Platform’ s CEO, Neta Meidav has been mobilizing global donations for Israel through the Stand with Israel and Tech4Israel initiatives.

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