00:00maybe we should just start with
00:01introductions and to get a sense for
00:03board experience etc my name is Scott
00:06Weiss I'm a general partner here to a
00:0716z but prior to that I was the founder
00:10and CEO of a company called iron port
00:11and I was very specific and directed
00:13about building that board which I'll go
00:16into in a little while and then now I'm
00:19on the board of ten companies here so
00:21maybe we can just kind of do really
00:23quickly and then I can pose a few
00:25sure so I'm Dan Harmon heaven for 15
00:29years or so I was a CEO of NetApp and
00:30then continued I was executive chairman
00:32for law in terms of non NetApp boards
00:35and probably on about 10 or 12 roughly
00:37over the years most of whom have been
00:40private like stage you know Series C
00:43ready to go public I did that with a red
00:47back Aruba Palo Alto Networks and a
00:49variety of others and right now I think
00:52I'm on five so I'm bill Krause I hang
00:57out here occasionally I was chairman CEO
01:00of 3com since that time I've been on a
01:04lot of boards I had to do a research
01:05project for the CIA I've been on 15
01:08public boards from Adobe to side base
01:10I've been on about 12 or 13 private
01:13boards most of whom have long since gone
01:16to I have to be here
01:18cool Aaron Levie CEO and co-founder of
01:21box I've only been on one board for
01:26and it was almost a public board and
01:29then things got kind of weird but we
01:32expect it to be a public board so I will
01:34have that experience and I will come
01:35tell you how it goes but you know have
01:39fun stories and lots of great lessons
01:42and things to take advantage of over
01:44over time I'm Spencer raskov I'm
01:47co-founder and CEO of Zillow I am
01:50currently on four boards three public
01:53Zillow TripAdvisor and Zulily and one
01:56public julep sorry one private julep
01:59that's great so I just want to get a
02:02raise of hands just so I can get a sense
02:04of where we should aim the conversation
02:07just kind of series a B or C companies I
02:10know most of your CEOs can we just get a
02:12raise of hands series a
02:14okay yes Series B and Series C or
02:19further okay so like if it's about a
02:23third a third a third so I think I would
02:25love to for the series a and Series B
02:28folks in the room I think maybe first
02:31talking about like what are some of the
02:33AHA around like when we're kind of think
02:36about early stage boards what if I want
02:40to give you guys some Nuggets to take
02:41home around like building your board
02:43managing your board and so I want to get
02:45us at the beginning and maybe through
02:47maybe two thirds of our conversation
02:50around like what are some of the issues
02:52around those early what are the early
02:53things that you did right or wrong I'll
02:57go first and then I'll kind of pass the
02:58torch right around I was just mentioning
03:00to Aaron that I I always kind of had a
03:05rule of thumb like every time a VC
03:07joined my board I'd add a CEO and so I
03:10ended up with two VCS as it turned out
03:13and three CEOs on my board and me and my
03:16co-founder which I thought was a really
03:17good mix and some of that's
03:19counterintuitive at this stage when
03:22you're thinking about like hey do I
03:24really need like I like now it's just me
03:26and one other VC that's typical the
03:27configuration like you you get your
03:29round done and you have a VC on your
03:31board and it's you and your co-founder
03:32and a VC and when they kind of agitate
03:34and say hey do you want to get somebody
03:35else in the board like I was always like
03:37a little bit like really what do I need
03:38somebody else in the board well one of
03:40the key things that might not hit you is
03:42if you have like let's say two VCS and
03:46two CEOs on your board you can stop
03:48taking VCS like on that third and fourth
03:51round you can just say hey listen I've
03:53got my board together you know like and
03:55I have two CEOs I've got two VC's I
03:57really don't need another VC what I need
04:00is a financial expert for going public
04:02and so you you know you don't end up
04:05with one of those boards with six VCS on
04:08your board if you kind of from the very
04:11beginning think about bringing on an
04:13external board member so that would be
04:14my nugget on early board putting
04:17together so yeah I differ a little bit
04:20I've been on three boards at series a so
04:23I'm an outsider not a venture capture
04:25but I think any more than one outs
04:27until you get to series B is maybe too
04:31having you know having somebody who's
04:33actually been an operating guy etc I
04:35think it's got a lot of value and they
04:36also can be me Thierry between the
04:40various venture capitals and ways of the
04:43CEO can't right so especially as you're
04:46getting up this series B or various
04:47other issues that show up but I think
04:49more than one that's I I always think a
04:52one per stage yeah that's what I meant
04:53yeah any time you had a VC at a CEO so I
04:57think we got yeah and I think there's a
04:59lot of value of that and then you know I
05:01think I ought to be an expectation right
05:03up front about how long they're going to
05:05stay on after a liquidity event I mean
05:06if you get acquired obviously it's the
05:08answer zero but assuming you go in
05:10public right what's their continuation
05:11going to be and the audience started
05:13having that discussion well in advance
05:15you can start figuring out what the
05:16replacement strategies are going to be
05:18well so early stage boards when you have
05:22Don Valentine and dick cram like the
05:25founder of Nea on your board it's hard
05:29to add anyone else after that no but I
05:36did Oh everything that was said it's
05:39good to get an outside perspective on
05:40your board I read a book called startup
05:44boards of which Scott's quoted
05:46infrequently and he talks about the
05:48importance of getting an independent
05:50director on early as you can so like
05:54guys I want you to like add is there any
05:57other nuggets about like this phase of
05:59the board that you would say like I just
06:02kind of threw out that is kind of an
06:04important one for me that I want to give
06:05these guys but I want to get them some
06:07take home around like they're thinking
06:09about like what is the issues with
06:10boards and by the way we're gonna take
06:11questions as well because I know you
06:12guys have specific questions but if
06:14there's like one nugget that you would
06:15have them take away about building their
06:17board or managing their board at the
06:18Series A or B what would that be
06:21you couldn't have to go in line if you
06:23guys want to think about it yeah I know
06:25Aaron is like jumping up tell you dude
06:30so yeah I mean so it has to be at the
06:35well series a B I mean like I want to
06:37just make sure we direct some of the
06:38conversations it's two-thirds of the
06:40is Series a be like what were you
06:42thinking about around that time mmm
06:44great so basically so it's really
06:47ensuring so our series a board on we I
06:51don't know how to reverse engineer this
06:53so you could always kind of repeat it
06:55but we were very very fortunate where
06:58our first investor on the board
07:00understood something about our business
07:02model that we had no context for so the
07:05so it's it's an interesting case where
07:07we we brought someone on the board that
07:09that wasn't necessary like like if like
07:11if you looked at exactly what we were
07:13trying to do as a company you wouldn't
07:15know that that should be the person that
07:16would be on the board but it turned out
07:18that that his insights into so we
07:20pivoted within the first year and do in
07:22a really kind of enterprise software
07:24focused company and it was really
07:25because he had an outside context for a
07:29space that we weren't focused on that
07:30actually led us to realizing on the the
07:34scale and sort of our you know the
07:36opportunity to to be able to go after
07:38and so I think it's a probably an
07:40important lesson where you know the
07:42obviously we'd you you sort of later in
07:45life when you know and you have more
07:47sort of specificity and it's clear what
07:50the vision and mission of the company is
07:52that's where more specialization and
07:55domain expertise starts to matter a lot
07:57because you're doing kind of all these
07:58new specialized activities as a company
08:01at scale but early on that that ability
08:04to have somebody flexible on somebody
08:06who's going to be agile in terms of how
08:08they think about your business and
08:09potentially provide context for and and
08:12in ways that you're not necessarily
08:14thinking about is I think pretty
08:15important now that doesn't mean somebody
08:16from a complete different sector but
08:18doesn't have to be that level of sort of
08:20the deepest domain expertise on day one
08:23I think you know we were lucky that at
08:25that end up mattering a lot for our
08:27business model and over time as we built
08:29out the board adding specialization for
08:32the areas that we wanted to really
08:33augment our own internal talent around
08:35so like adding somebody that as a sales
08:37specialty or finance specialty yeah you
08:41know the way we think about it now is we
08:43look at sort of what are the major gaps
08:45in our strategy that are going to be
08:47pretty transformative over some period
08:48of time and who would we want to add
08:50that would be able to to bring that
08:53of domain experience so as an example on
08:54two to three years ago we were really
08:56going into the large end of the
08:58enterprise and so the the person we
09:00selected bring on the board was the
09:01previous CEO of General Electric and so
09:04that about that ability to add that kind
09:06of impact and visibility to where our
09:10business was going ended up being
09:12incredibly impactful and just earlier
09:14this year we brought on Padma warrior
09:16who is really important to kind of where
09:18our technology strategy is going over
09:19time as we want to build out our
09:20platform on you know today we think
09:23about new areas of our growth and you'd
09:25likely see us add people that would be
09:27very relevant for that kind of you know
09:29the areas where we don't necessarily
09:30have the internal leadership or the
09:33internal visibility completely to be
09:35able to bring that somebody onto the
09:36board who's going to help us transform
09:38the company is really important I'll
09:40come back and underscore something you
09:41said I think you buy pretty fast I
09:44wouldn't focus early on on domain
09:47expertise or whatever I'd focus on
09:49trying to find somebody who's been
09:51experienced operating I have a person
09:53woman and who really can add to the
09:57evolution if you will of your business
09:59not so much domain expertise or
10:02representing a customer community
10:04everything else those come in later I
10:06think you want a more generalist who's
10:08got a lot of operating experience so
10:10front almost like a CEO coach in many
10:12ways I certainly do count I would guess
10:15that most companies when they ultimately
10:16get a product or service to go to market
10:18what they started off creating is not
10:21what they wound up shipping mm-hm
10:23and the same way the business model is
10:25not the same like you said you pivoted
10:27to a software company or whatever and
10:28you want somebody who's gone through
10:30some of those transitions and
10:31understands the difference and what it
10:34yeah I mean a lot of the same themes by
10:37the time you get to be your C stage I
10:39think you want to start thinking about
10:40the board like you're building out a
10:42baseball team where you know you've
10:44they're all great athletes but they're
10:45people with slightly different skill
10:46sets and it's what I didn't really
10:48appreciate at the time I mean somebody
10:50gave me that advice it's so obvious
10:52right like you kind of needs a director
10:54who's more focused on marketing and
10:55maybe somebody was more focused on sales
10:57and maybe someone who is more focused on
10:58technology or whatever but what I didn't
11:01really realize about all that was it's
11:04not necessarily that they are so expert
11:06particular field that they're gonna like
11:08they move the needle on that particular
11:10issue because they're never going to be
11:11close enough to the details for example
11:12to be focused on you know you should
11:15really be selling your product in this
11:16particular way and I'm this great person
11:18that has this great sales experience so
11:19do it this way it's more that in the
11:22it keeps the conversation on that topic
11:24much more honest and it forces the
11:26management team to come much more
11:27prepared because the they know they
11:29can't snow the the director on that
11:31particular topic maybe think it's no the
11:32other couple of directors because
11:34they're you know whatever they're sort
11:36of at 10,000 feet or 50,000 feet and
11:38they don't really understand the
11:39particular area but at least there's one
11:40person room they can call on
11:41you know that subject area and and that
11:44isn't really as important until a little
11:46bit later but it definitely becomes
11:47important so on our board you know
11:49there's somebody who's the former head
11:52of marketing and then CEO at Expedia and
11:54then you know we've got financial acumen
11:56the CEO of Liberty media former CFO
11:58Microsoft and then we've got you know
12:00the VC kind of earlier stage you know
12:03person who understands so much about
12:07early stage growth companies and then
12:09we've got a real estate guy because
12:10we're in the real estate industry and so
12:11we've kind of got different subject
12:13areas sort of covered in that way so I'd
12:16like to take it back to the series a B
12:18for the series a in particular you know
12:21when you're building your board probably
12:23the first person you're going to add is
12:25the venture capitalists and if you're
12:27fortunate enough to be able to have
12:30choices of who you take money from think
12:33about that you know think about type of
12:35venture capitalists that you want to get
12:38married to so to speak because you're
12:39going to be with that person for a long
12:40time so don't think about just the money
12:44think about the person behind the money
12:45and and don't just think about the brand
12:47of the VC because once the check clears
12:50that doesn't really matter that much
12:51what matters is who's in the board room
12:52for the next ten years and I've been on
12:55other boards with so with VCS from with
12:57really great brands who were the
12:59representative was just sort of annoying
13:01and not added it to the conversation and
13:03it's you know you end up dreading going
13:05to those board meetings and management
13:07hates preparing for them and it just
13:08it's it's just not not good so think
13:11about the person not the firm yeah I
13:13would add if you have a choice right now
13:16you know something don't it's always
13:19great to have a choice
13:20and do a lot of reference checking you
13:22know both back door and the references
13:24that then you get from the board
13:25remember I think that's really really
13:27critical and it's not done nearly as
13:29much as you like if how many of how many
13:31just a show of hands how many of you
13:33guys when you got your first VC round
13:35called at least five people that that
13:37person had that I've been on the board
13:39but happen that's good I think that's
13:42really really important I wanted shift
13:44gears a little bit to talk about the
13:45board meeting and in like kind of what
13:48constitutes like a great board meeting
13:51and I'll just set the stage a little bit
13:52I always have this phrase that the the
13:55board eats whatever you serve them and
13:57so you are the one that's preparing the
14:00meal and putting it in front of them but
14:02you know if you put up a slide with a
14:04bunch of numbers they're gonna ask you
14:05about every single number on that slide
14:06right so what how do you guys think
14:09about preparing for a board minute again
14:11kind of thinking about the series a
14:13series B what are you trying to tee up
14:15what's first second third I'd love to
14:17kind of get you guys to thinking of
14:18riffing on that a little bit yeah just
14:20like the question how evolving the board
14:22and the question of content and so on
14:25the cadence of session of meetings
14:26changes over time depends on the stage
14:28at a company you know most series a
14:32companies have been on we meet every
14:34month or six weeks it's a couple hours
14:36it's really focused on how we do an
14:38internally and you know building the
14:40product hiring the engineers spending
14:42the money whatever it may be may be a
14:44little update on what's going on the
14:45market but it's mostly internally
14:46focused and that is shifts quite
14:48dramatically I think the ones that are
14:50more interesting as you go to market
14:51right what's the strategy for everything
14:55from you know the sales process
14:56marketing process etc that's where the
14:58big bucks go to that's really what a
15:00high risk is and and so getting really
15:03good data about the customer connections
15:06and competitive issues and you know Jeff
15:09objections coming back from your target
15:12customer or whatever I mean that's
15:14that's the meet that you really want the
15:16board to understand right and they're
15:18really help help you understand actually
15:21feeding back to I I just find that other
15:24than I mean what makes a good meeting
15:28right here I had a plan it's a it really
15:30happens I mean you know if there wasn't
15:32some set of issues to deal with you
15:34wouldn't need a board you know I think
15:37the key in constructing the meetings and
15:39there's a question of frequency as well
15:41and often you want a meeting you know is
15:45what do you think the directors want to
15:48know and understand this has nothing to
15:50do about you says to do about them right
15:53and an audience advocacy is I think
15:56important to keep in mind you don't want
15:59to tell them a bunch of things and your
16:00team's gonna want to tell them a bunch
16:01of things and I don't really give a
16:03most of the time I want you telling you
16:05the important stuff right that we can
16:07then go have a serious discussion about
16:08and so I find the best meetings of those
16:12which are very succinct around mundane
16:14and leave lots of time for the meaty
16:17subjects well I'm gonna offer three
16:22high-level general guidelines or rules
16:24of the road and then we're good some
16:26practical suggestions
16:27the first is most boards prefer to be
16:31led not managed in the political sense
16:34of the word and boards are just like any
16:37other team you need to spend time
16:39developing your board in terms of
16:42turning them into a cohesive
16:43collaborative high performance team and
16:46you need to do that through shared
16:47experiences the classic dinner before or
16:50after or even once or the fun
16:52experiences we had we we took our
16:55directors out go-kart racing and watched
16:57cram lickin and in Valentine going to
17:01each other like they were in bumper cars
17:02that was kind of fun but so that's so
17:04first thing is you know boards want to
17:06be led not managed second is is is don't
17:11 your board they'll see right
17:13through it immediately you know practice
17:16the notion of under promising and over
17:20delivering and in that same vein
17:23delivered bad news as quick if not
17:26quicker than good news the third which
17:29leads to the third one the third one is
17:33practiced a construct that I used was
17:36extremely valuable was let's go around
17:38the table and share your thoughts that
17:42every director in terms of their
17:44thinking on a subject and after you've
17:47gotten their perspective summarized what
17:49you've heard then you get the benefit of
17:51not only heard what they had to say but
17:52you build credibility with him because
17:54oh well he really heard what I had to
17:55say so given those sort of three
17:58high-level rules the road back to more
18:00practical stuff is in terms of the
18:03preparation one of the things I used to
18:07judge the capabilities of the CEO is can
18:11they get their together and get the
18:12board package out in some reasonable
18:14amount of time two or three days in
18:16if you get it the night before but if
18:18you can't manage getting the board
18:19package out how the hell they manage the
18:21company the second thing I look at is
18:24I mean if it's that goddamn thick I mean
18:26it practice the three C's it has to be
18:28clear concise and compelling if you
18:30can't do that you don't know how to
18:31communicate so you know those are some
18:34practical things about preparation and
18:36presentations same thing I don't want to
18:38see a slide with 400 words on it how
18:41about just four or five I mean practice
18:43the Steve Jobs rule no powerpoints you
18:45know stand up and tell me what you think
18:48so that's looking at more from the board
18:50members point of view it's great pass it
18:52on yeah so I mean that kind of covers a
18:57lot of it I guess the may be the only
18:59other things is it's it's probably a
19:01good way to think about from a Content
19:03standpoint probably the less you want
19:07feedback is probably a good sign that
19:10you need to add more talent to the board
19:11so if you're just using the board
19:14meeting as a way to deliver the the
19:17latest information and it's not a
19:18strategic conversation it's probably a
19:20good sign that you want to you know your
19:22board sucks well or you would you know
19:23want it add more to the bench to change
19:26the dialogue and have more kind of
19:28conversation that's a good kind of way
19:30to think backwards from like you know
19:32the actual structure of the board and so
19:35you know for us it's it's part updates
19:37and delivery and then part sort of
19:39strategic conversations around kind of
19:41key junctures of the business I think
19:43and this is something that we we started
19:46doing a couple years ago but but
19:47including executives in obviously
19:50sessions of a board meeting it's a great
19:52way to create accountability for other
19:54of the team and it drives you know that
19:58drives execution and and it really helps
20:01you know expose you know them to the
20:04board and in vice versa that actually
20:06ends up being a pretty good kind of gut
20:09check on your talent as well because
20:11there's a you know to the extent that
20:13you have experienced board members
20:15that's a good Avenue to just learn more
20:17about kind of the talent that you're
20:18building up and it becomes an easy and
20:21early way to identify where maybe people
20:23are hitting scale issues on the team so
20:25you know leverage your your board and
20:28that board meeting has a tool to drive
20:30you know strategy improvement to drive
20:32accountability with executives to
20:34obviously educate and communicate the
20:36latest in the business but it can be a
20:38pretty useful mechanism just as a kind
20:39of cadence of the business if you
20:41leverage it like that
20:43so first advice I would have would be if
20:46you have time I do think it's helpful to
20:49join other boards now you're probably
20:51not practical when you're a B or C stage
20:53and you can hack this by sitting in
20:56occasionally on other boards I did that
20:58before I started joining other boards I
20:59would find some other company that I
21:01found interesting that was not
21:02competitive where you know either the VC
21:04introduced me or I need a CEO I would
21:06sign an NDA I'd go to one of their board
21:08meetings and just sit there
21:09you know quietly and then it's so
21:11joining these other boards has been
21:13really valuable to me in the Zillah
21:14board and meetings I'm kind of much
21:15better since I've joined a couple other
21:16boards but then some some sort of tactic
21:22more tactical things you know we require
21:24decks have to get out or memos or
21:26whatever 48 hours ahead of time you know
21:28if possible 72 hours but 48 is the
21:30absolute you know latest we switched
21:34about a year ago to a memo system after
21:36business and Amazon's model of kind of
21:39no PowerPoint for for one or two
21:41meetings in a row and it was a lot more
21:44work but because I had to sit down and
21:47write it pretty much from scratch
21:48instead of just pulling slides from you
21:51know internal management decks from
21:52other kind of monthly or quarterly
21:53meetings that we already had but it was
21:56actually a really really great exercise
21:57for me it forced me to sit down and
21:59develop a narrative and really think
22:00about like how to describe how things
22:02are going and we've switched to that
22:05model entirely now and now different
22:06people write different sections and then
22:08it edited and I really like that model
22:10it wasn't so sure about that switch it's
22:11worked well for us exam twice we've done
22:13it probably three times now I think and
22:15so what we do now is it you know it's
22:17like a twelve or fourteen page you know
22:19single line word doc in PDF and then
22:22there's a deck with you know way too
22:24many slides like they simply call
22:25together from different internal
22:27meetings which I'm sure no directors
22:28even browse through but you know that's
22:30sort of there is the backup to say like
22:31look we also have all this data if you
22:33really want but here's the description
22:34of what the heck is going on at the
22:36company and then the other thing I agree
22:40with her and said about having
22:41management attendance I would just be
22:44really thoughtful about it because
22:45that's currency that you need to think
22:47about how to distribute and you know
22:48once you start inviting executives to
22:50board meetings it's really hard to get
22:52including Board dinners you there's no
22:55good rule of thumb maybe but you to be
22:57really thoughtful don't do anything
22:58casually when you're running to a
22:59meeting and sometimes hey can I go to
23:04you know really think about who's going
23:06to what and why and how do I explain it
23:07to this other person because you haven't
23:09you would be shocked at how you know
23:11seriously people take this and then
23:13there are two good best practices that I
23:15have from other boards we actually don't
23:18do this all that well at Zillow but but
23:20we should and probably will based on
23:21this conversation the first is you know
23:24every board meeting has an exact session
23:26without the CEO towards the end you know
23:28we save 20 30 minutes at the end kick
23:30the CEO out board talks about out the
23:33CEO and a lot of boards do that Zillow
23:35actually does that but what this one
23:37other board does is then we'll bring the
23:38CEO back and one of the directors while
23:41to see I was I was kind of nominated to
23:42sort of play back for the CEO what the
23:43discussion was while they were out of
23:45the room and it's it's usually that last
23:47half hour once the CEO comes back is the
23:49best discussion of the whole time and
23:52and so I found that to be really helpful
23:54and then I wanted to stop yeah sure
23:56because that's like with every board I'm
23:59on after a period of time I try to
24:01convince the CEO that it's a good idea
24:02because the fir'd like when I first walk
24:04in it's normally like what I'm gonna be
24:07talking about me like at when I'm not
24:09here but the implied reason to do this
24:13is you guys aren't talking about me you
24:17know there's no like side conversations
24:19that I don't know about you know like
24:20like the implication
24:21is like you aren't getting
24:23getting together for dinner outside and
24:25talking about me and my company like
24:27like you have this time after every
24:29board meeting to talk and get you till I
24:31kind of have this together then you
24:33bring me in and tell me what what's
24:34going on so there's not any conspiring
24:37outside of the board meeting which i
24:39think is one of the big reasons to do
24:41that in addition to like when the
24:44directors have to get together like
24:45there is an issue it's not an odd thing
24:47that you're freaking out about right
24:49like it's just something that happens
24:50out of normal cadence so sorry I feel
24:52really strongly about that and I think
24:53everybody should have it okay I take a
24:55tangent on that real quick yeah sure
24:56since all those issues are performance
24:59related it's really awkward they have
25:01one the CEOs direct reports in the room
25:05you find a lot of board structures that
25:07start off with a CEO and a technical
25:09founder co-founder gotta get them off -
25:12you can't have a really candid
25:14conversation about the performance of
25:15the CEO with one of his subordinates
25:16participating it just doesn't work
25:18totally agree yeah and we have a heart
25:20problem there which is our you know our
25:22CEO is also our GC and she's the
25:23secretary so she's supposed to take
25:24notes so we kick her out throw right we
25:26have somebody else you know so yeah it's
25:28totally great so another best practice
25:30that another one on boards does is every
25:32you know maybe twice maybe three times a
25:35year so not every board meeting would
25:37put up an exact org chart and the CEO
25:39goes through with a very open narrative
25:41on each of their directs and with the
25:43board you know pros strengths weaknesses
25:45you know succession planning like
25:47brutally candid about each of their
25:49directs with the board and not all my
25:51boards do that but I do like that I have
25:54a lot of things of when board meetings
25:56go badly what you know why but I I don't
25:59let you okay like because I I think
26:04there's a the continuum of great board
26:08meeting - horrible board meeting is
26:10great board meeting and I don't mean
26:13like regardless of the numbers like
26:14obviously I have a lot of great board
26:16meetings and the numbers are going up
26:16into the right but but like great like
26:18you know you're in a good more meeting
26:20which you know you're in a horrible
26:21board meeting is you know you're
26:23completely transparent you're completely
26:24honest and you're talking about the
26:26critical issues of the of the business
26:28and you look at your board members at
26:30people that care and are smart and are
26:32going to help you right like that's the
26:34energy that goes into the board
26:35me the other board did the kind of the
26:38dark board meeting is you know I'm
26:40hiding a monkey they're trying to find
26:42the monkey you know like and it's it's
26:44like the whole thing is like a dog and
26:46pony show its rehearsed like we spent a
26:49lot of time preparing for the board
26:50meeting because we don't want to screw
26:52anything up we don't want to like like
26:53kind of like make sure that the the
26:55lacquer is on everything like those are
26:57the two like you know you're having a
26:59bad like and also the I look forward to
27:02board meetings versus I can't stand
27:04board meetings you know those are those
27:06are also the two opposite ends of that
27:08extreme like the board meeting I look
27:10forward to is like I'm going through a
27:12lot of crap I need some help like and
27:13these these people are gonna really help
27:15me as opposed to you know I've got a lot
27:18of things and the board is gonna be at
27:19my ass you know like this is not fun and
27:21I'm dreading it like those and and the
27:23other thing that I think is really
27:24important about the good part of board
27:26meetings is that it it's a time to get
27:29the whole team to get their
27:30together like you know the board needs a
27:31focal point for everything like damn it
27:33you know like I've got a board meeting
27:34in a month like you've got to get this
27:35done you know like there's a there's
27:37like a general like like anvil that it's
27:40like or not even looks like a whip it's
27:42like it's it's a part of like of in what
27:45you're saying is a progress report comes
27:47and it's a sync like how are you doing
27:49on the goals what did you say you were
27:50gonna do did you do it you know that's
27:52yeah why don't you go through the bad
27:54for me or some bad things I I hate when
27:57I have to dial into it to a board call
27:59and I hate when people are on the phone
28:00I just think it you know we all know
28:03they're only half paying attention we
28:04all know that you know it's hard for
28:06them to hear and papers are shuffling
28:07and whatever and that's usually you know
28:10I usually can write that person off from
28:11the from the board meeting if they're
28:13not there in person so that's that's bad
28:15the biggest the biggest sign of a bad
28:17board meeting is one where there's there
28:19are a lot of surprises like if you've
28:20got bad news to share for example you
28:22want to share it ahead of time and you
28:24want to make sure that you know bad news
28:26should travel faster than good news and
28:28that it's out there you know before the
28:29board meeting so there there's no big
28:31AHA at the board meeting and you know
28:34the flip side of that is just to be
28:35succinct about what makes a good board
28:36being a good board meeting is one where
28:38there's an active and lively discussion
28:41about some important strategic issues
28:43and you're getting as a CEO you're
28:45getting good input and advice from other
28:46people about how to deal with these two
28:49three big issues it's not about
28:51reporting and regurgitating what the
28:52numbers are like it's a discussion about
28:54something that you're having a hard time
28:56with well so I know you guys are anxious
28:58to ask questions when we just turn it
29:00over to you guys and we'll get some
29:02questions going yeah so this is I think
29:04more series Amy but maybe even
29:05fingerboards you go with this you start
29:07out and you have like a really small
29:08board and then you have you've got you
29:10see sort of one investor then you have
29:11another investor then like the lawyer
29:13shows up the Malloy bring the other
29:15lawyer and then the principal shows up
29:17an outside director segments and
29:19director you go from on this really
29:20intimate conversation to like no
29:23conversation what's the ideal size of
29:25board you know once you're public I
29:26would guess it's probably about eight
29:27CEO plus seven others I mean you got to
29:29have financial experts and comp
29:31committees and all the rest of that
29:32stuff anymore Nate just their ministers
29:34too many and you know I think the
29:37question yeah we've we from the day we
29:44took our way around from benchmark and
29:45TCB we said no you know only the partner
29:48yeah you know and and no you know I mean
29:50yes so when I showed up the first time
29:52at the first Zulu board meeting there
29:54were literally 30 people there or
29:56something because it was a hot company
29:57about to go public everyone was there
29:59with their observer seat and their
30:00assistant their associate and their
30:01secretary I was just like it was a horse
30:03board meeting and we couldn't talk about
30:05anything I didn't even know who everyone
30:06was and they cleaned house and you know
30:10now it's a really well-run board if
30:12there are you know the only compromise I
30:15guess is if there are people that need
30:16to be like I don't know there's one
30:19there's one board I'm on where there
30:21they don't have an in-house GC and so a
30:23lawyer from some you know I don't know
30:25Wilson Sonsini or wherever some
30:26expensive law firm somebody sits there
30:28for six hours at $500 now or whatever
30:31and takes notes and typing away whatever
30:32and it's it's attracts from the intimacy
30:35of the conversation and what I keep
30:37meaning to suggest the CEO is then just
30:39dial that person in and they'll put us
30:41on mute we won't even remember that
30:42they're there if we need them there you
30:44know for the cameras or whatever then
30:45let them be in my phone and I think
30:47that's a decent way to get people out of
30:48the room at least if they have to be
30:50involved somehow I was less like it
30:54wasn't that big of a deal if somebody
30:56brought somebody else occasionally
30:59because this the board members were so
31:02like that there was not like they would
31:04sit quietly and listen that rare that
31:07they would actually open their mouth
31:09however there I have run into situations
31:12now where you try to get like a like a
31:14customer on your board you know like
31:16where they want an observer seat if they
31:18do a strategic ground somebody like you
31:20know I won't name any names but
31:22sometimes that can alter what you say in
31:25the port meaning you know like the
31:26products kind of screwing up or
31:28something's going wrong you're not going
31:29to want to have that kind of a frank
31:31conversation at the board when you have
31:33a customer there and so then you have
31:35that you have to wait and have that
31:37conversation in the closed session which
31:39is kind of a pain in the ass so like I
31:40think like partner like a junior partner
31:45that somebody is trying to to mentor as
31:47long as they're you know kind of quiet
31:49and and listening I was kind of you know
31:52I let that I let that slide but the but
31:54I was very careful about letting
31:56customers dial in and that type of thing
31:58that where it came on came on later at
31:59strategics I did with one I mean one of
32:03one of our VCS has kind of a model of
32:05like no junior people so it wasn't an
32:07issue the other one has junior people
32:09and that's sort of part of their model
32:11and so basically it took that takes more
32:16time but I dealt with the junior person
32:19a lot more offline so it's like look
32:21I'll commit to talk to you you know
32:22whatever four six eight times a year
32:24like offline will send you all the board
32:26materials and whatever because it is
32:27important for that person to be plugged
32:28in because the partner gets leverage
32:30from that person and so I do kind of
32:32want them to know what's up but I didn't
32:33necessarily want them in the board
32:34meeting itself so it's another way to
32:36dissolve it so let me go let me go well
32:38but before we get to the questions let
32:40me go quickly down the list frequency
32:44situational earlier stage more frequent
32:47later stage less frequent generally
32:50either every other month for series a
32:53once a quarters you get in a series see
32:55it's a very situational in terms of the
32:57frequency next question is well okay
32:59well what's the low and relative to
33:01frequency back to Spencer's point node
33:05Islands you know board members have to
33:07show my number one criteria for a board
33:09member joining the board number to start
33:11is he has to be willing to show up and
33:13do good work if you don't show up I
33:15so frequency once a month once a quarter
33:21later stage what's the length of board
33:23me two hours minimum four hours maximum
33:26and that's against situational dependent
33:28what you have on the agenda which leads
33:29to the agenda what does the agenda look
33:31like the agenda usually should the way I
33:33think about good board meetings this has
33:34three parts to it like a good play you
33:37know the first part is sort of what I'll
33:39call a menace trivia and operational
33:41updates and you know that's 3045 minutes
33:46something like that and and count on the
33:49fact that your board members have read
33:50the material that you set out a bad more
33:53meetings when I sit there and listen to
33:55somebody standing up there reading every
33:56word on every slide it's just it's just
33:59bad so in terms of the agenda first part
34:04is the administer it via and and the
34:07operational updates the second part is
34:09where you get to the real meat of the
34:11meeting where you get to the strategy
34:12and that's where you get to discuss the
34:14issues that are on your mind that's
34:16where you get the advice from your board
34:17members and by the way if you have an
34:19issue that you're struggling with don't
34:21come in with a blank sheet of paper
34:22you know come in with your point of view
34:24and then ask your board members for
34:26advice and go around the table and get
34:29their thoughts and then repeat back what
34:31you think you heard okay so that's
34:33that's an agenda and then the last part
34:35of the agenda we've already talked about
34:36where you have a private session with
34:38the board meetings and then have a CEO
34:39come back okay so that's the agenda so
34:41then you get into the prep and I think
34:43we covered the other things the
34:44preparation and the presentation
34:46material it passes somebody else so go
34:49back I want to make sure we get it to
34:50get to these questions I do want to like
34:52I liked the content I really appreciate
34:54the I typically start board meetings and
34:56I liked having Boorman to start with the
34:59CEO only and the board members and the
35:01first slide is highlights and issues and
35:04so the highlights are here give me the
35:06three four things that went really well
35:08or that you want to highlight to us and
35:09here are the three or four things that
35:11we have problems with and you sometimes
35:14you'll that you'll spend an hour in that
35:16first bit of the session but it helps
35:18frame the conversation and then when you
35:21you know like the issues are what you
35:22spend most of the board meeting talking
35:24about like I believe the administrivia
35:26could get sent out before the
35:29board meeting and the board members are
35:31you know they can read through all that
35:32and have questions but I want to talk
35:34about the most important ting is the
35:36issues you know and I want to bring in
35:38like if the sales issue I want the sales
35:40person there and let's drill into it
35:42here's here's my best understanding of
35:44what we should do but I want to I want
35:46to give today with like that that to me
35:47is a different cadence and I just wanted
35:49to add that in well they I would add to
35:51that to me what's helpful as a board
35:54set the administrivia side I agree with
35:56you about that but in terms of the
35:58operational updates frequently that can
35:59set the context for the issues that
36:02you're going to in fact the operational
36:04update should be short clear concise
36:06compelling right and set the stage for
36:08the issues that you really want to get
36:10to okay I did find that that contradict
36:15what bill said army is it always went
36:18better when either I as a CEO or CEOs
36:21who are in meetings or I'm a director
36:23spend the first 10 or 15 minutes doing
36:25what you said and I think they can even
36:28frame the meeting right if here's the
36:30issues you're gonna hear here's what's
36:33not fully baked here's you know or I'd
36:35like your input absolutely kind of give
36:36them the roadmap to what the what's
36:38going to happen as well as situational
36:40analysis right and I found out to be
36:44very very valuable so I would encourage
36:45all you did I encourage every CEO every
36:47board I'm on to start the meeting that
36:48way it's a private meeting it's a
36:50closed-door session it's the CEO report
36:52it's not what's labeled as there's no
36:54materials in advance it's all verbal and
36:57what are their activities should you
36:58expect a board member to do outside of
37:01the board meeting so maybe you know what
37:02I mean like what are the interview
37:03executives that type of thing so that's
37:06a good broad question yeah I mean I just
37:09heard out there the so because I was
37:12first-time CEO if we don't count the
37:17other things that failed miserably that
37:19I did but so basically you know I think
37:23that I I initially felt a tremendous
37:25amount of pressure that like the board
37:28had to be the way that that like that
37:30was like the way that you would learn
37:32about growing the business and building
37:33up the company cuz cuz like
37:34theoretically that that's the only thing
37:36really above you um and and then there's
37:39a lot of pressure like who would you add
37:40on the board like like because that
37:42you're really like making a
37:43on unlike one person that you think
37:46you're gonna learn from for a really
37:47long period of time and I would totally
37:48separate like the ways that that you're
37:51gonna learn and be able to grow as a CEO
37:53from the role and responsibility of the
37:55board so I just inverted the entire
37:58model which is like we've never done a
38:00board search what we've done is is built
38:03advisors around the company gotten close
38:05to lots of people I personally engage
38:07with you know 50 or so CEOs that have
38:11been through very similar problems over
38:13over you know similar errors of
38:15technology or different areas of
38:17Technology rather and then and then as
38:19you build those relationships it becomes
38:21obvious like who's somebody you think
38:22you can learn from over a really long
38:24period of time and then for other people
38:26where you just need tactical advice that
38:29around a situation you're dealing with
38:30you want to have a cadre of people that
38:32that can help with that that might
38:34provide completely different
38:35perspectives because even actually if
38:37you listen to probably are answers to
38:38these things there's there's you know
38:40different answers for every single
38:41question and I think that's just the
38:43reality is every situation is different
38:44every company is different so so you'd
38:47rather actually be able to have you know
38:49an order of magnitude more people that
38:51can help you solve problems and make
38:52decisions than just the board of
38:54directors because there's gonna always
38:55be different you know points of view and
38:57perspectives that that are gonna that
38:59are gonna help you grow and help you
39:01build up so the the board is is much
39:03more of the you know it's just a
39:05strategic function I think and then
39:07obviously making decisions around you
39:09know you know budget and and you know
39:11how you're how you're going to kind of
39:12grow the company or whatever but it
39:14doesn't have to be the sole way that you
39:16know you grow your own leadership and
39:17scale yeah all right just get out of
39:20that the board is not there to help you
39:21be successful the board is there to help
39:23the company be successful you are
39:26just keep that in mind the amount of
39:29time you should spend on your personal
39:30development and a board meeting is zero
39:32and if you want to latch onto a director
39:36and get lots of advice that's great but
39:37do that outside the meeting you know if
39:39you want to get their critique and how
39:41am i doing that's great but do that
39:42outside the meeting and I mean this the
39:45meeting is not about you it's about the
39:46company by the way there'll be a
39:48follow-up meeting on how to structure
39:55i total I totally agree though as kind
39:58of Machiavelli and yeah that sounds I
40:01totally agree that you know if you are
40:04so self-aware that you know that you
40:05want to you know use this you're lucky
40:08enough to have these these these panel
40:10of experts to help you become better you
40:12know good for you for realizing that and
40:14you should absolutely use as much of
40:16their time offline as possible that
40:18they'll give to you but I don't think
40:19that the meeting is it I mean also a
40:21practical standpoint the meetings are
40:23short it's kind of awkward in that group
40:25they're infrequent it's like not a great
40:27place to do that and in terms of what's
40:30expected outside of the board meeting or
40:32whatever I mean before you before you
40:34join a board before you invite somebody
40:35onto your board you should definitely
40:36set expectations of what you know of
40:38what's appropriate I'd say that general
40:41you know I mean I don't know I would
40:44expect any of my directors to be
40:46available to do pretty much anything
40:47that we that we asked in order to help
40:49make the company successful practically
40:51speaking it's not all that much outside
40:53of board meetings at least in our case
40:56but you know their other their other
40:58situations where it's a lot more often
41:00than that yeah and trying to just to
41:02pick up on that in terms of you know
41:04what you expect from a board member when
41:07I'd run a boy and I joined the board
41:08with the expectation I'm 24 by 7 now I
41:11can't be instantaneously 24 by 7 but if
41:15it's specific example today I can't give
41:18you the circumstances but critical issue
41:21board members sent me an email this
41:23morning I had a lot of stuff to do today
41:24and I made time to meet with that board
41:27member this afternoon so you should if
41:30you don't set the expectation that you
41:32know when you need help you need help if
41:35the board member is not prepared to do
41:36that well then maybe I think twice about
41:40I do believe that you should have
41:42there's not coaching going on the board
41:44meeting per se but there but I think
41:48it's great to have both you know a VC
41:51that's had operational experience
41:52obviously we build this whole firm on
41:54that premise and to have a CEO on your
41:58board that can be kind of a de-facto
42:00coach because a little and I and I think
42:02especially Series A Series B you want to
42:05have enough contact with those folks
42:07outside of the board meeting
42:08so you get to a comfort level we're you
42:10know like and as I was growing up as a
42:13young CEO I wanted to be comfortable
42:15enough with them that I could ask them
42:17the stupid questions about like well hey
42:19I'm trying to close this guy how do I do
42:21this I would also recommend that there
42:24are things that you don't want to share
42:26with board members that you'd want to
42:27have a mentor or a CEO coach that you
42:30can ask those stupid questions with so
42:31they're like I think there's a range of
42:33questions that I feel totally
42:34comfortable and you know want the board
42:36members to be on the hook for but then
42:38there's some others that I'm like that's
42:39where I kind of need to bare my soul a
42:41little bit where I think you know I
42:43don't want them to do I don't want them
42:44to think that I'm that weak you know
42:46like there's a is III have asked those
42:48questions to like a CEO coach that would
42:50never ask a board member you know and so
42:53I mean it sounds like Aaron's built a
42:55personal network of CEOs novi that I use
42:59for that sort of thing I'm in YPO which
43:01is Austin which is a pretty common Oreo
43:03or whatever there are lots of these
43:04different organizations which is another
43:05good place to to find that network where
43:08you can talk about I mean an obvious
43:10thing is your own competition right like
43:13you know you can't discuss that with
43:16your board you're kind of sometimes on
43:18the other side of the table and so you
43:19need somebody to help you figure out how
43:22to advocate for yourself sometimes and
43:24you know you can't find that from your
43:26board you'll find that from your peers
43:27or from other organizations do you just
43:31have age situational I mean people with
43:38large company experience can be helpful
43:40because they know what there's I mean
43:42show me a CEO doesn't want to build a
43:44big company and I'll show you CEO
43:45there's not going to be a CEO very long
43:47but you know all you want to build a big
43:49company so having a CEO on your board
43:51that's that either built a big company
43:53or been in a big company helps you
43:55understand what the answer looks like
43:56when you get to be big and all the
43:58things you don't want to do and the
44:00things you do want to do on the other
44:01hand when you're small big company
44:04bureaucracies not very much help so
44:07having the perspective of someone who if
44:09the I the ideal situation is somebody
44:11that's been it started a company and
44:14built it into a big company because
44:16they've seen the whole movie yeah I
44:17think it's pretty important I'm thinking
44:18back to 2008 when you know the world
44:21the directors that were most helpful to
44:24us working through that were the the VCS
44:28that had a lot of early stage experience
44:29had seen a lot of other companies die
44:31it wasn't the Marquis you know fortune
44:34500 CEOs who are on our board who have
44:36big names that everybody's heard of like
44:38it was the I mean I guess it's the VCS
44:40ever our big names also people heard of
44:42them too but you don't I mean it's
44:43people who have seen earlier stage stuff
44:45they were more valuable there than the
44:47later stage so I do think it's pretty
44:52yeah I wrote a monthly I wrote I wrote a
44:55monthly board update letter right I just
44:57had the early stage a monthly update
44:59port coordinator now on the flip side
45:02looking at it from the other side a
45:05board that I'm on sends out this big
45:07thick binder every month and I keep
45:10asking the see are you sure you want to
45:12go through all this pain happens it I
45:14love reading your letter that's the
45:15summary letter but you know but they
45:18want to do it because it's the
45:19discipline of having to put everything
45:21together and doing it but I think a
45:23letter a monthly letter from the CEO is
45:26very helpful both free more equally for
45:29you as the CEO because it forces you I
45:31think especially I said there may have
45:33said but unfortunate you to put your
45:34thoughts together and you know cohesion
45:37together for that it's hard though I
45:39mean I don't I wish I had I wish I made
45:41the time to do a monthly communication I
45:44don't I would say that the one the you
45:55can actually find lots of ways to
45:56leverage communication you're already
45:58doing so like we send a company All
46:00Hands note monthly and and that this
46:04sort of lays up the strategy or whatever
46:05just literally forwarding that to the
46:06board of that's why I here's the latest
46:09or maybe at a strategic juncture like
46:11that counts as communication so it's the
46:15exact way to I mean you know any way
46:17that you can get more leverage out of
46:18out of the content or the communication
46:20you're already producing you know the
46:23board is another constituent that you
46:25need to communicate to and I would also
46:27add that companies do too few
46:31communications to all internally anyway
46:34one of the things that we used to do
46:36anytime that I would go on a sales trip
46:38on the plane ride back I would write out
46:40notes from the road and it was just my
46:42perspective I talk about every
46:44interaction I had with customers and I'd
46:47sent it out to the entire company and
46:48I'd also send it to my board and so it
46:51was just it's a you know constantly
46:53thumping you know the company with
46:56things that you're you know like or when
46:57I'd go and meet with a Gartner analyst
46:59and you know like here was the the back
47:01and forth sent it to the entire company
47:03and you know and I would try to spread
47:05out that that love would the I get my
47:07executives to do that as well it's just
47:09you know emails to all is just a great
47:12channel to keep everybody in the same
47:14page and we'd also like go through the
47:16board slides of the whole company after
47:17after every board meeting and talk about
47:19like what the what was talked about in
47:21the board meeting so that there's like a
47:23great bit of transparency there but I
47:25totally agree on leveraging the the
47:27communications that you normally have
47:28one thing you might want to consider is
47:30delegating it in the early stages and
47:33that app we did a monthly business
47:34review as an executive team but the
47:36board meetings are quarterly and so the
47:38CFO had the responsibility to kind of
47:40document what went on in a monthly
47:42Business Review pick a few highlights
47:43slides and he did the commentary cover
47:47letter send it out that's great not
47:49everything has to land on your desk okay
47:52well hey thanks to the panelists I
47:55appreciate you guys using the time I
47:56really appreciate the turnout
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