How a Tourist Can Help you with Your Startup

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.