How a Tourist Can Help you with Your Startup

Posted on Jul 12, 2010 | 35 comments


There’s a famous line about consultants that clients love to repeat, “consultants take your watch and then tell you the time.”

I suppose there’s some truth to that but of course it’s an over simplification.  I used to work for Andersen Consulting (for > 8 years) – mostly building computer systems for large companies in the fixed telecoms, mobile and Internet sectors.  On every project in which we worked it was clear that there was corporate knowledge built up around the organization.  It occurred to me that it was my job to find the data, synthesize it, summarize my conclusions, provide options for better decision-making and lead the decision-making process.  Such is leadership.  And VC.  And I learned the skills in my days as a consultant.

After a few years in the business I was used to clients questioning my existence on every new project.  I started telling them, “I’m a tourist in your company.  I don’t know nearly as much about it as you do – you’ve lived here for a long time and I’m quite new.  And as a tourist I’m not likely to stay here very long so you’ll have to live with the results.  But like any person living in a city for a long time, I find that my clients often stop visiting certain attractions that used to excite them.  They stop questioning why things are the way things are and just accept the status quo.  And the great thing about being a tourist is that I get to visit many places and can bring some good ideas that I’ve seen elsewhere that you may like.  But let’s be clear – I’m only a tourist.  You really know your town.  And if I’m going to help a bit while I’m here the better I know ‘what’s what’ the easier it will be for me to help and be on my way.”

I must have given versions of that speech 20 times or more.

And it’s true.  I found that I was always more curious about issues like “why do you charge for your web hosting services this way when newer non-incumbent players do not?” or “What would happen if we didn’t bid for 3G services and in stead built our network on 2.5G until the technology matures?”

I tried hard, though, never to confuse my curiosity with real wisdom.  I saw it as my job to probe, challenge, question, analyze, present facts and summarize options but in the end to leave it do the client to own the results.  I wanted to push them to make and own decisions by showing them the data and the decision tree.  Forceful.  Persuasive.  Even combative.  But in the end they decide.

And that’s how I view VC today.  I’m a tourist in your company.  I get to ask all of the awkward questions about why you do this, that or the other.  I’m there to spar with you precisely because I’m not ensconced in the details on a daily basis.  If you’re not engaging your VC this way you’re losing out.  You should be presenting data to your VCs and framing the decisions that you’re trying to make into cogent frameworks that will allow a group of experienced people to help you with decision making.  I have often found entrepreneurs want to present the positive progress of the company to impress the board rather than engage in debate about how to make things better.  It takes self confidence to do the latter.

And you should be pushing to find out how things are done in other “cities” or better yet get them to help intro you so that you can also visit those cities on your own.

And don’t limit it to VCs.  Find other tourists to visit your company.  Find ways to get friendly people to do peer reviews on parts of your business and offer the same in return.  Let them see data.  Let them meet your staff and ask awkward questions.  Don’t try to defend every process you have or every design choice.  Your job is to hear how it feels for a tourist who’s visiting – you can later decide whether their contributions were insightful.  The best major changes I made to my first business were from people who asked “awkward” questions.

And similarly be careful of the reverse.  Know that a tourist who loves your cities star attraction may not really know what it’s like to live with your key features on a daily basis.  They might really not be a good proxy for the “voice of the customer” even though all VCs think that they are (myself included ;-)).  I think one of the greatest weaknesses of boards is that they are tourists by definition and sometimes confuse their observations and advice for actionable insights.  For the most part, boards challenge and manage teams need to interpret the tourist comments and decipher how to apply them (or whether to push back against them with better data at a later date).

Of course there are times where a board’s voice is gospel: mergers, raising capital, replacing the CEO, etc.

But for most issues VC’s and boards are tourists.  And you don’t only want their money – you want their insights.

  • http://twitter.com/Justyn Justyn Howard

    “I have often found entrepreneurs want to present the positive progress of the company to impress the board rather than engage in debate about how to make things better. It takes self confidence to do the latter.” – bookmarked.

  • http://twitter.com/LeoAlmighty Leo Chen

    +1 :)

  • http://www.linkedin.com/in/rajatsuri rajatsuri

    great post. One thing to add is that not just VCs and boards fill this role – you can find solid advisors in your industry and depend on angel investors too.

    VC discussions do result in great ideas and tactical shifts I've found. But as you acknowledge, there is also a risk that an entrepreneur just does things to please his VCs and stops following his gut. It can be a tough balance

  • http://www.sharelomer.com SharelOmer

    There is a saying in Hebrew “a guest for a second, see all wrong” (or something like that).

    Being open minded and listen to others is a key factor in growing your buisness and product, after all if your in the buisness of creating value to others, you should live, eat and breath the value your providing.

    Having said that, you should listn, but may not act..

    P.s.
    Thanks for writing a shorter post… i love your long ones, but dont always have time to read them all, so its great from time to time to read a shorter one :) (i hope its Ok to say…)

  • bethtemple4u

    great post. In my practice (and as a Board member) I call it having a set of 'fresh eyes' on your business – and every business (every size) needs it now and again (not just in crisis). I'd add mentors to the tourist list (which is much like the suggested 'advisors' by rajatsuri). not enough managers have mentors to challenge and guide them (another travel metaphor in that as well).

  • http://twitter.com/wfjackson3 Willis F Jackson III

    Mark, there might be a good article hidden in here about the “voice of the customer” and what sources are best. I know that I have personally recognized over the past couple of years that I am a bad “voice of the customer” for anything other than products that specifically target techies or the intelligent minority (I assume I am in those demographics, but my wife disagrees).

    Otherwise, pretty good post.

  • http://www.derekchristensen.com Derek

    Phenomenal post. Digg + Delicious.

    The metaphor of a tourist is a solid one, and can be expanded even further while not losing its validity. I'll be passing this along to several people in my company.

  • marilynbyrd

    Excellent post Mark. I think I'll be using your tourist analogy with my recruiting clients.

  • @titudeAdjust

    I happened to read this immediately after this article by Mark Cridge:
    http://www.markcridge.com/muckandbrass/2010/06/
    “Google of course has already created an insane amount of wealth through its core business of search… The data that has been collected and built up over the past decade or so is sitting there, growing every day, but largely untapped, waiting to be exploited.”

    It strikes me that your characterization of consultants is entirely parallel:
    “On every project in which we worked it was clear that there was corporate knowledge built up around the organization. It occurred to me that it was my job to find the data, synthesize it, summarize my conclusions, provide options for better decision-making and lead the decision-making process. “

    Thus, tourism creates real value. However, it occurs to me that the fact that tourism adds value may add a question you, as an entrepreneur, should ask yourself: is there more value in fixing “the way things are” that the tourist questioned, or in exploiting assets which you did not know you'd created and/or the type of synthesis the tourist did? (e.g., “Should I improve the structure of my database for faster search or should I invest in better unstructured search and exploit what I've got?” “If this is screwed up here, perhaps I should go into the business of fixing it for a lot of companies?”) I believe most of us end up too heads down and never ask that question… even if a tourist might trigger it. Ah, but perhaps the upside is that it creates a lot of spin-off opportunities for those who do ask it!

  • Adam Wexler

    i think this goes back to the rapport entrepreneurs have with their investors. if it's a quality relationship, you won't feel the need to impress as much; it's more of a team effort. if not, it's an uphill battle throughout…

  • http://twitter.com/saadiq Saadiq Rodgers-King

    Isn't part of the dilemma here that your VC board members aren't just advisors, but also potentially future investors? You can't get advice if you're constantly selling and trying to manage your next round. It's the same issue of incubators that don't invest in their companies and signal negatively to the rest of the market. The conflict of needing your board (investors) to see the best possible version of your company makes them less valuable as advisors.

    I understand that a savvy entrepreneur needs to solve today's problems if they ever hope to worry about tomorrow, but the issue of incentives in that situation I think could also use a little investigation.

  • http://twitter.com/IBAssociate Entreprenuer TechIB

    I couldn't agree more with the following statement –

    “I have often found entrepreneurs want to present the positive progress of the company to impress the board rather than engage in debate about how to make things better. It takes self confidence to do the latter.”

    – as a service provider (tourist in every sense) I find grin-fucking is all 90% of the companies I meet with want.

  • http://how2startup.com/ Roy Rodenstein

    Not directly what you meant, but one of the main things I've always loved about new hires is that they also have these fresh eyes -alas, for just a while- and can question things that we'd forgotten to question.

  • http://twitter.com/Aerials24 Latif Nanji

    <– Guilty of positive progress reporting.
    I think one of the main reasons I found it difficult to engage the board was sparked by the fact that certain members had different agendas. Some were for strictly ROI (investors) , some where focused on the market (independent). At some points it just seemed like a “nice” presentation to keep people happy rather than engaged in rigorous discussion – and think since we were young (22yrs) we in a tough spot during the recession and tried to keep up positive impressions with the board.

    Ideas on how to align board mentality? I think now its purely a leadership quality that needs to come from the founders side (most often)….

  • http://bothsidesofthetable.com msuster

    Yes, as I mentioned in the article, bring many tourists in. They are all data points.

  • http://bothsidesofthetable.com msuster

    No offense taken. I try to write some posts that are shorter. It's a struggle.

  • http://bothsidesofthetable.com msuster

    100% agree. Mentors are important. As are other CEO's, which is one of the reasons I wrote my previous post about co-location in technology hubs / labs

  • http://bothsidesofthetable.com msuster

    Thank you. Appreciate the feedback (and virality!)

  • http://bothsidesofthetable.com msuster

    Answer is … predictably … both. You need to question how to exploit existing assets and form new ones. The balance can only be determined by looking at your forward leaning strategy. That is where a good outsider can help be your sparring partner.

  • http://bothsidesofthetable.com msuster

    For sure. As I said, it needs to be both ways. Board members need to know that their role is to probe and challenge but to give ownership for detailed decisions to the management team.

  • http://bothsidesofthetable.com msuster

    I think investors are more likely to part with cash when they are part of the solution, when data is transparent and when they have a trust-based relationship with the management team. Nobody likes to feel like they're being “sold to”

  • http://bothsidesofthetable.com msuster

    THAT is funny.

  • http://bothsidesofthetable.com msuster

    ALWAYS a benefit to new hires. I always love when the founding team finally brings on another senior executive. It tends to shake things up in a positive way. New pair of eyes.

  • http://www.missi.com/ Peter Beddows

    While the emphasis here is naturally about Start-Ups and VC'ing, from my own experiences I can say that much of this philosophy applies equally to dealing with the business that successfully reached beyond the start-up stage to established but yet has stalled in its growth. Many times I have found that “Being a Tourist” in such a client business has been the only way to bring light into the situation in such a way as to then bring value back to the stakeholders: Very rewarding for the peripatetic entrepreneur as well as the clients.

  • http://lmframework.com/blog/about David Semeria

    while ( get_post_from( “suster” ) ) {
    echo “Great post, Mark. I totally agree”;
    }

    You're on a roll, Mark old son.

  • http://bothsidesofthetable.com msuster

    Ha! Thanks David. Hadn't see ya for a while. Thought you abandoned me ;-)

  • http://lmframework.com/blog/about David Semeria

    Never! I've been a bit busy on a frivolous but very fun side project. I read all your posts, but I just end up nodding in agreement, which doesn't make for headline-grabbing comments….

    That's why I wrote my brown-nose script above.

    Keep it up!

    D.

  • Michael_RightSite

    I haven't worked as a VC, but when I was a regional manager travelling to local offices across China I sometimes fulfilled the “tourist” role as well. I think the key for such occasional visitors to be effective contributors is to be careful that you are a thoughtful tourist rather than a “pigeon.” Pigeons, of course, swoop in once in a while, splatter sh*t all over the place and then fly off again.

  • http://twitter.com/saadiq Saadiq Rodgers-King

    Certainly. You should pick board members who are trusted partners and any gilding of the truth will certainly come out eventually. I was just trying to put my finger on some of the incentives that make this difficult..

  • http://twitter.com/KellerII JT Keller

    Speaking from a consultant and entrepreneur's perspective I can say that everything in this post rings true. It's important to explore numerous possibilities and often those possibilities can and are uncovered by outsiders. Use your resources wisely, listen to the good, the bad, and the ugly and remember that at the end of the day it's up to you and your team to decide what to act on.

  • http://twitter.com/KellerII JT Keller

    Don't forget to explore insights from those that may not be familiar with your industry. Sometimes they'll offer you the biggest pearls of wisdom.

  • http://www.justinherrick.com Justin Herrick

    Powerful insights in this article mark. It makes complete sense, and it echos the sentiment of many other articles about best business practices. You need that outside view from time to time, if for nothing else then to prevent you from eating your own dog food. (I think the saying goes like that)

    I've thought of having the VC in that particular role, I've yet to deal with VCs personally, but as I imagine it now I would be in the former category that you mentioned of entrepreneurs. You feel this need to impress those on the board over bringing anything up that could cause dissent or disruption, perhaps it depends more on the relationships between the VCs and the founders, or perhaps its due to the fact that you know you have their money. Either way I agree with your point, and that discussion about improving the product and the business should be key.

  • Guest

    In a company I used work, an executive referred few consultants as “Seagulls”.
    They fly across the country every Monday, Shit all over the place during the week and fly back on Friday.
    This has stuck with me since I heard it the first time.
    Just ranting….back to what ever I need to do to get my first customer :-(

  • labanner

    Mark, great post. It reminds me of the following blog entry which reinforces the fact that consultants are generally not an appropriate fit for startups, for a variety of reasons. Big companies are in a much better position to “have the time told to them,” whereas startups cannot afford the opportunity costs and/or money involved in working with consultants:
    http://www.infochachkie.com/beware-the-consultant/

  • Len_Williams

    Building a strong relationship with a VC is not an easy thing to do and you are right, these tourists, however long they may stay with you, can help a lot if you know how to deal with them. Probably the most important thing, besides the ability to build rapport, is your business transparency, that will allow them to contribute to solving the real problems as they occur. You should also state from the very beginning the riskier aspects of your business plan, as weak points are expected to exist and VCs can help you fortify them.