Category Archives: Board

Simple Rules to Make It Easier To Build Your Startup’s Board Deck

As someone who has assembled many startup board decks over the years, I thought I’d offer some advice to executives who contribute slides to board decks that should make it easier for the point-person to assemble, improve the deck’s appearance, and avoid any painful and/or embarrassing mistakes in the process.  Marketing folks, who both build a lot of presentations and live in PowerPoint, tend to get these basics right.  Everybody else, in my experience, not so much.

  • You are your metrics.  Remember the old quote that’s often misattributed to Peter Drucker, “if you can’t measure it, you can’t manage it.”  I prefer its corollary, “if you’re not measuring it, you’re not managing it.”  And, in turn, its corollary, “if you’re not presenting it at a board meeting, then you don’t care about it.”  Remember, the metrics you choose to present — and perhaps more importantly those you choose not to present — say a lot about you and what you think is important.  Put real thought into selecting them.
  • Take the time to write a short letter.   Remember the again often-misattributed quote from Blaise Pascal:  “if I had more time, I would have written a shorter letter.”  It’s your board — take the time to include as few slides (and as few numbers per slide) as are needed to tell the story.  But no fewer.  Don’t make the classic mistake of just grabbing your ops review slides and pasting them into your board deck.  Don’t make the deck assembler have to decide which slides, from a pile you provided, should be in the deck.
  • Provide context for numbers.  Repeat after me:  the board is not afraid of numbers.  So don’t be afraid to present them.  Don’t drown them — be selective in which metrics you show.  But when you choose to show a metric, provide context so board members can analyze it.  That means providing trailing nine quarters of history, sequential and YoY growth rates, and % of plan attainment.  Thus, each metric translates to 12 numbers, so pick your metrics carefully.
  • Use the right design template.  Assembly is much easier if everyone is using the same corporate slide template, ideally a confidential version of it that includes good security footers (e.g., Company Confidential and Proprietary, Internal Use Only).
  • Learn how to use slide layouts.  Don’t be the guy putting text boxes onto blank slides when you should be using the Title+Content layout.  One great part about using layouts is re-applying them to make sure you, or a prior author, hasn’t changed anything.
  • Don’t hack the layout.  If your layout doesn’t include a subtitle, don’t use one.  It just makes it harder to reformat things downstream.  Plus, too many folks are lazy and make a sequence of slides with the same title, only varying the subtitle.  Bad habit.  Integrate the two and make varying titles.  Less is more.
  • Don’t put numbers into embedded tables.  The easiest way to get math errors in your board slides if to either cut/paste or re-type numbers into embedded Word tables.  Use embedded worksheets for numbers and ideally do live total calculations to ensure all the numbers are right.
  • Be careful as heck with embedded worksheets.  That said, note that Office has a terrible habit of taking the whole workbook along for the ride when you paste a table as an embedded object.  Don’t be the person who pastes in a table of payroll by department, accidentally including everyone’s salary on an adjacent tab, and then mailing that not only to the board, but also the whole executive team.
  • Paste charts as images.  The major upside here is you eliminate problems related to the prior point, the downside if you give zero power to the deck-assembler to fix things at 2 AM.  The best practice is to ship your slides with charts pasted as images and attach a separate Excel file as the source.  That way, you both reduce risk and give the assembler the power to change things if needed.
  • No more than one table of numbers per slide.  While board members love numbers, don’t mentally overload them with too many concepts on a single slide.
  • Use a standard capitalization convention.  I Recommend Title Case for Slide Titles.  I recommend sentence case for slide body copy.  It’s a pain in the neck to fix this if everyone is doing something different.
  • Use a standard convention for notes and sources.  I use * and ** and put the notes (which are often data sources) in 8-point type right above my confidentiality footer.  It doesn’t matter where you do it; what matters is that everyone puts them in the same place.
  • Don’t use slide notes.  In reality, you have two choices here — either always distribute your board slides in PDF or never use slide notes.  Any middle ground is very dangerous — imagine copying a slide from someone else’s deck that has embarrassing commentary in a slide note that you don’t notice, but a board member does.  Ouch.
  • Type text directly on objects.  Don’t create a separate text box and then put it atop on object; make the text and the object one.

If everyone on the e-staff follows these tips you’ll end up with a better board deck and it will take whoever assembles it — often the CEO at smaller companies — far less time to do so.

SaaS Startup One-Slide Financials Dashboard

In the course of my board and advisory work, I get to look at a lot of software as a service (SaaS) startups financials and I’m often surprised how people choose to present their companies.

Because people — e.g., venture capital (VC) investors — judge you by the metrics you track, the order in which you track them, and how clearly you present them, I think it’s very important to put real thought into how you want to present your company’s one-slide financial and key operating metrics.

As both an author and analytics enthusiast, I also believe in minimalism and reader empathy.  We should neither bury the reader in facts nor force them to perform basic calculations that answer easily anticipated questions.

I always try to remember this Blaise Pascal quote (which is often misattributed to Mark Twain):

I would have written you a shorter letter, but I did not have time to do so.

So, in this spirit, let me offer my one-slide SaaS startup financials and key operating metrics dashboard, which captures all the key high-level questions I’d have about any enterprise SaaS company.


While this is certainly not a complete set of SaaS metrics, it provides a great summary of the state of your annual recurring revenue (ARR), your trajectory, your forecast, and your performance against plan.  Most important, perhaps, it shows that you are focused on the right thing by starting with 5 lines dedicated not to TCV, bookings, or GAAP revenue, but the key value driver for any SaaS business:  ARR.

If you like it, you can download the spreadsheet here.

Joining the Granular Board of Directors

I’m very happy to say that I’ve joined the Board of Directors of Granular.  In this post, I’ll provide some commentary that goes beyond the formal announcement.

I think all CEOs should sit on boards because it makes you a better CEO.  You get take remove the blinders that come from your own (generally all-consuming) company, you build the network of people you can rely upon for answering typical CEO questions, and most importantly, you get to turn the tables and better understand how things might look when seen from the board perspective of your own company.

Let’s share a bit about Granular.

  • Granular is a cloud computing company, specifically a vertical SaaS company, aimed at improving the efficiency of farms.
  • They have a world-class team with the usual assortment of highly intelligent overachievers and with an unusual number of physicists on the executive team, which is always a good thing in a big data company.  (While you might think data scientists are computer science or stats majors, a large number of them seem to come from physics.)

To get a sense of the team’s DNA, here’s a word cloud of the leadership page.

wordle 2

Finally, let’s share a bit about why I decided to join the board.

  • As mentioned, they have a world-class team and I love working with supersmart people.
  • I like vertical strategies.  At MarkLogic, we built the company using a highly vertical strategy.  At Versant, a decade earlier, we turned the company around with a vertical strategy.  At BusinessObjects, while we grew to $1B largely horizontally, as we began to hit scale we used verticals as “+1” kickers to sustain growth.  As a marketeer by trade, I love getting into the mind of and focusing on the needs of the customer, and verticals are a great way to do that.
  • I love the transformational power of the cloud. (Wait, do I sound like too much like @Benioff?)  While cloud computing has many benefits, one of my favorites is that the cloud can bring software to markets and businesses where the technology was previously inaccessible.  This is particularly true with farming, which is a remote, fragmented, and “non-sexy” industry by Silicon Valley standards.
  • I like their angle.  While a lot of farming technology thus far has been focused on precision ag, Granular is taking more of financial and operations platform approach that is a layer up the stack.  Granular helps farmers make better operational decisions (e.g., which field to harvest when), tracks those decisions, and then as a by-product produces a bevy of data that can be used for big data analysis.
  • I love their opportunity.  Not only is this a huge, untapped market, but there is a two-fer opportunity:  [1] a software service that helps automate operations and [2] an information service opportunity derived from the collected big data.
  • Social good.  The best part is that all these amazing people and great technology comes packaged with a built-in social good.  Helping farmers be more productive not only helps feed the world but helps us maximize planetary resource efficiency in so doing.

I thank the Granular team for taking me on the board, and look forward to a bright, transformational future.

To Pre-Meet Or Not To Pre-Meet: That Is The Question

I once asked one of my board members which CEO ran the best board meetings across his portfolio companies.  His answer was, let’s call him, Jack.  Here’s what he said about him:

  • Jack got the board deck out 3-4 days in advance of the board meeting
  • Jack would call him — and every other board member — 2-3 days before each board meeting and walk through the entire deck and answer questions, taking maybe 2 hours to do so.
  • Board meetings with Jack would go very quickly and smoothly because all the questions had been asked in advance.

When I heard this, I thought, well, I have a few issues with Jack:

  • He spends a lot of time managing his board instead of running his business.  (I guess he got his CEO job by managing-up.)
  • He completely violates my “do it in the meeting” principle by having a series of pre-meetings before the actual meeting.

While I may have my doubts about Jack, others don’t seem to.  Consider entrepreneur and VC Mark Suster’s recent post, Why You Shouldn’t Decide Anything Important at Your Board Meetings.  Suster straight out recommends a 30 minute pre-meeting per board member.  Why?

  • Agenda input so you can adhere to the Golden Rule of Board Meetings:  “no surprises.”
  • So you can “count votes” in advance as know where people stand on important and/or controversial issues.
  • So you can use board members to convince each other of desired decisions.
  • Ultimately, because in his opinion, a board meeting is where you ratify decisions that are already pre-debated.

OK, I need to chew on this because, while practical, it violates every principle of how I think companies should conduct meetings — operational ones, at least.  When it comes to operational meetings, nothing makes me grumpier than:

  • Pre-meeting lobbying
  • Post-meeting “pocket vetoes”

My whole philosophy is that meetings should be the place where we debate things and make decisions.  Doing everything in advance defeats the purpose of meeting and risks encouraging political behavior (e.g., “if you vote for my bridge in Alaska, I’ll vote for your dam in Kentucky”), with managers horse-trading instead of voting for ideas based on their merits.

The only thing worse that teeing up everything in advance is what one old boss called the “pocket veto,” where a manager sits in a meeting, watches a decision get made, says nothing, and then goes to the CEO after the meeting and says something akin to “well, I didn’t feel comfortable saying this in the meeting, but based on point-I-was-uncomfortable-raising, I disagree strongly with the decision we reached.”

I remember this happened at Business Objects once and I thought:  “wait a minute, we’ve flown 15 people from around the world (in business class) to meet at this splendid hotel for 3 days — costing maybe literally $100,000 — and the group talked for two hours about a controversial decision, came to resolution, and made a decision only to have that decision overruled the next day.”  It made me wonder why we bothered to meet at all.

But I learned an important lesson.  Ever since then, I flat refuse to overrule decisions made in a meeting based on a pocket veto.  Whenever someone comes to me and says, “well, I didn’t feel comfortable bringing it up in the meeting (for some typically very good sounding reason about embarrassing someone or such), but based upon Thing-X, I think we need to reverse that decision,” I say one thing and only one thing in response:  “well, I guess you should have brought that up in the meeting.”

You see, I believe, based on a bevy of research, that functional groups of smart people make better decisions than even the smartest individuals.  So my job as CEO is to then assure three things:

But I’ve got a problem here because while we know that boards like pre-meetings, operationally I am opposed to both pre- and post-meetings.  Would it hypocritical for to say that pre-meetings are OK for me to conduct with the board, but that managers internally should avoid them?

Maybe.  But that’s what I’m going to say.   How can I sleep at night?  Because I think we need to differentiate between meetings with a decision maker  and meetings of a decision-making body.

Most people might think that the pricing committee, product strategy committee, or new product launch committee are democratic bodies, but they aren’t.  In reality, these are meetings with a decision maker present (e.g., the CEO, the SVP of products) and thus the committee is, perhaps subtly, an advisory group as opposed to a decision-making body.  In such meetings, the decision-maker should want to encourage vociferous debate, seek to prevent pre-meetings and horse-trading, and eliminate pocket vetoes because he/she wants to hear proposals debated clearly and completely based on the merits in order to arrive at the best decision.

However, board meetings are different.  Boards truly are a decision-making bodies ruled by one-person, one-vote.  Thus, while I reject Suster’s advice when it comes to conducting operational meetings (which I believe are inherently advisory groups), I agree with it when it comes to decision-making bodies.  In such cases, someone needs to know who stands where on what.

And that person needs to be the CEO.

The “Dumb VC” Controversy: Financial vs. Operating VCs

Last week a scathing post by Andy Dunn, the founder of Bonobos, entitled Dear Dumb VC,  generated some stiff controversy in the blog- and Twitter-spheres.  Serial entrepreneur turned venture capitalist Mark Suster, author of the superb Both Sides of the Table blog, weighed in with a long, fact-filled response, entitled As Populist as it May Feel, 98% of VCs Aren’t Dumb that among other things, challenges some of Dunn’s industry math assumptions.

As someone who’s run VC-backed startups for more than 8 years, raised more than $45M in VC, knows many VCs pretty well and several both in their pre- and post-VC incarnations, is an LP in a few funds, and who has both sat on boards and done advisory work to VC-backed startups, I thought I’d weigh in with a few opinions of my own.

The first is that the idea of the “dumb VC” is simply dead on arrival.  I have never met a dumb VC nor do I ever expect to.  To the contrary, VCs are always among the smartest, best educated people I have ever met.  Most of the folks I know have attended some combination of Harvard, Stanford, MIT, or Cal and have both undergraduate and MBA degrees.   Those who come from the technical side often have PhDs in engineering or computer science.  You may like them, you may hate them, you may agree with them or disagree, but let’s just kill right here any concept that VCs aren’t smart.   They are.  And usually very.  Thinking of them as dumb is both incorrect and isn’t going to help you work with them in any way.

I believe the big issue Dunn is circling is that of operating vs. financial venture capitalist.  Let’s define what I mean.

An operating VC is one who comes primarily from an operating background, typically someone who has founded or run one or more startups and brought them to successful exits, often scaling them massively in the process.  Operating VCs add value by drawing on their past experiences.  Entrepreneurs often prefer working with operating VCs because they feel they have walked in their footsteps.  The original VCs on Sand Hill Road were almost exclusively from operating backgrounds (and I think I once heard, the majority from a single fraternity at Stanford).  As one great, first-generation operating VC recently told me:  “venture capital was supposed to be a second career.”  Andreessen Horowitz is particularly vocal on this topic, frequently messaging that its partners are exclusively operators.

A financial VC is one who has limited operating experience and typically entered venture capital as an associate immediately after completing (Stanford, Harvard, MIT) business school.  They typically have undergraduate degrees from stellar institutions along with a 3-5 years of experience, perhaps in product management at a company like Google or VMware.  Life is tough for financial VCs at the start — a lot of them die off trying to work their way to partner.  Because they are both young and lack significant operating experience, few CEOs want them on their board.  For this reason, they are often paired with senior partners and on a good day the senior partner attends the board meeting with the associate.  Financial VCs typically work by “pattern matching” — i.e., they draw on their experience sitting across 10+ boards and look for patterns and best practices.

In recent years, I have observed a back-to-the-roots movement driving two key changes in how Silicon Valley works:

  • VCs are much more founder-friendly.  Founders are not seen as disposable CEOs who will inevitably be moved to a CTO role.  This reverses a prior decade leaning the other way, typified by EIRs seen by founders as CEOs in waiting (or lurking).
  • Operating VCs are more in fashion than financial VCs.

While there are many things I like about the back-to-the-roots movement, I think pendulum needs to be in the middle.  Yes, some of Silicon Valley’s most successful CEOs (e.g., Larry Ellison, Steve Jobs) were founders.  But also yes, some brilliant technical founders turn out to be terrible managers.  While the fathers of venture capital may have been heavily operating guys, some of today’s Kings of Sand Hill Road more closely match my description of financial VC than operating VC.

For example, John Doerr of Kleiner Perkins got his Harvard MBA in 1976, had six years of sales experience at Intel, and then joined the Kleiner in 1980.  Doug Leone of Sequoia had sales experience at Prime, Sun, and HP and joined Sequoia in 1988 after getting his MS in management from MIT Sloan.  While I don’t know John Doerr, anyone who wants to argue that Doug Leone is either dumb or can’t add value will last approximately 5 nanoseconds before evaporating into a puff of smoke.

Operating VCs are useful to the extent their operating backgrounds and the situations they faced are relevant to your company’s today.  However, they risk getting stuck in the past, doling out stale advice that worked 20 years ago but is irrelevant today.  Financial VCs are useful to the extent they have humility and offer advice based on the patterns and trends they see today.

In the end, the facts of the case are simple:

  • All VCs are smart — usually very.
  • Operating VCs add value in different ways than financial VCs.
  • All VCs, once they become your investors, are definitionally trying to help your company.

I want to close on the last point because the “dumb VC” post seems to miss it — whether you, as a founder or CEO, perceive the VCs on your board as actually helping, I can guarantee you that they are trying.  Rather than blaming them for their misguided efforts, I would direct you to this other amazing Both Sides of the Table post, entitled 8 Tips on How to Get the Most out of Your Board.

In the end, no one forces you to raise venture capital.   You choose to do so.  As part of that choice, you are taking VCs onto your board.  Like you, those VCs want to maximize the value of your company.  Your job as CEO is to work with them to do so.  If that doesn’t work in the end, it’s your fault — not the board’s — because as CEO your job is to work with your board to drive the company to the desired result.

A Note to the CEO: Drive the Board of Directors

I remember during my first year at Cal we’d sometimes see a local band, Psycotic Pineapple [sic], who performed a song entitled “The Devil has Work for Idle Hands.” Every time they sang the chorus, audience members would hold their arms above their heads and dangle their crossed hands as they danced. Keep that scene in mind as we head into today’s post about CEOs, boards of directors, and the relationship between them.

While I don’t claim to have any particular gift in “managing” a board, I have learned a bit over the years by being a CEO, sitting as independent director, and chatting with other CEOs, venture capitalists, and independent board members.

Before discussing the board/CEO relationship, let’s define a framework first.

What Is The CEO’s Job?
The CEO’s job is to run the company, set culture, and manage the relationship with the board.

Setting culture means defining, communicating, and living the norms you want to establish inside the organization.  Running the company means setting strategy, putting the team in place to execute that strategy, letting that team do its job, and keeping everyone communicating along the way.

What Is The Board’s Job?
I’ve often quipped that the board’s job is to meet 4-6 times per year to decide if it should fire the CEO.  While overstated, it captures my belief that the board should have no operating responsibility because the board’s job is governance.

The board should question the management team on operations and discuss the team’s answers.  The board should oversee and approve financial audits, operating plans, compensation plans, bonuses, officer appointments, stock option grants, financing rounds, long-term obligations (e.g., leases), and M&A transactions.

Why Do Boards Exist?
Let’s go back to business school 101.  From first principles, boards are needed because of absentee ownership — i.e., when the owners of a company are not the operators of a company they hire agents (all employees, including the CEO) to run the company for them.  To oversee those agents, and protect against agency problems, the company creates a board of directors.

Note that in Silicon Valley startups, the absentee owner assumption is less true than in corporate America because ownership is both concentrated and well represented on the board.  Founders and VCs together might own 70-80% of company and sit together on the board.   While the VCs are absentee in the sense that they don’t work at the company, the founders typically do.

Governance = Discussion plus Approval
I’m not a lawyer, but as far as I can tell, governance is about two things:  discussion and approval.  For example, when people first see a company’s board minutes, they are typically shocked because they appear devoid of content.

On January 5, 2011, persons A, B, C, and D from the board of directors met at 10:00 AM at the Company’s headquarters in Palo Alto, California.  Mr. Smith, the VP of sales presented the sales results for 4Q10 and the forecast for 1Q11 including a discussion bookings, revenues, forecast accuracy, lost deals, and pipeline coverage.  The board asked numerous questions of Mr. Smith and a vigorous discussion followed.

But they’re not saying what the forecast is?  Or who asked what question?  Or what the sales results were?  All the facts are missing!  But they aren’t.  The facts the law cares about relate to whether the board did its job.  It convened.  It met with management.  It asked questions.  It had a vigorous discussion.

The content of the discussion matters less, primarily because in business you have the right to be wrong.  It’s not a crime to start a company that sells three-headed elephant dolls; it’s just a bad idea.  The law isn’t going to go anywhere near trying to decide what’s a good idea or a bad idea – that is left to business judgment.  The law wants to ensure that oversight is happening — that the board is meeting and the business is being discussed.

While it might seem quaint, this notion of discussion is so strong in the law that board decisions made without an opportunity for discussion (e.g., not at a duly called meeting, but over an email chain) must be made unanimously.  (As an aside, misunderstandings about when such resolutions became effective were a part of the option backdating scandals of the 2000s.)

The Direction Paradox
While discussions, challenges, advice, and questioning are always good, when boards give operational direction (i.e., “you should do X”) they risk creating a paradox for the CEO.  It’s easy when the CEO agrees with the direction and in that case the direction could have been offered as advice and still would have been heeded.

It gets hard when the CEO disagrees with the direction:

Case 1:  If the CEO follows the direction (and is correct that it was wrong), he or she will be fired for poor results.

Case 2:  If the CEO fails to follow the direction, his or her political capital account will be instantly debited (regardless of whether eventually proven right) and he or she will eventually be fired for non-alignment as the process repeats itself over time.

In case 1, the CEO will be surprised at his termination hearing.  “But, but, but … I did what you told me to do!”  “But no,” the board will reply.  “You are the CEO.  Your job is to deliver results and do what you think is right.”  And they’ll be correct in saying that.

Once caught in the paradox, weak CEOs die confused on the first hill and strong ones die frustrated on the second.

Because the paradox is only created when boards give specific direction (i.e., “you should do X”), I think boards should generally refrain from so doing, and prefer questioning, challenging, brainstorming, and advice-giving to directing.

A Wacky Idea for Resolving the Direction Paradox
As a gamer, I have a simple but admittedly impractical idea for solving the paradox.  The CEO and the board each start with three credits.  Each time there is a disagreement on a major issue if the CEO goes against the board he instantly burns one credit.  If he is eventually proven right he gets 3 additional credits back.  The system separates major from minor conflict (“are we talking credits here?”), empowers to the CEO to make the decisions he/she believes in, reminds the CEO that going against the board is costly, but rewards him/her for the gumption to do so if they are eventually proven right.

A Better Idea for Managing the Whole Situation:  Drive the Board!
But there is a better way to handle the problem.  Why does the direction paradox happen?  I think for many good reasons:

  • Board members want to be helpful
  • Board members want to make an impact
  • Board members want to participate, not just sit and experience death-by-PowerPoint at every board meeting

In the past 6 months, three different VC ecosystem types have told me something akin to the following:

“You know, I love Joe, the CEO of company X.   You know why?  Joe is in charge.  Unlike most CEOs, Joe sends out his board deck 4 days early.  Then he calls me to make sure I’ve reviewed it and to ask if I have any questions.  So he’s both holding me accountable for doing my job and he’s speeding up the (boring) operational review part of the board meeting.  So the board meetings largely become discussions about important topics.  They don’t always take the full three hours, so sometimes I get to leave early, but they always energize me and let me contribute.  Heck, the craziest thing about Joe is that he’s got me working for him.  I leave the board meeting with 10 action items that can help the company and Joe calls me the next week and the week after to make sure I’m doing them.”

Joe has clearly taken control of the situation.  Joe knows the board has energy and wants to help.  And Joe learned from Psycotic Pineapple that idle hands are dangerous.  So Joe channels the board’s energy the way he sees fit, controls the situation, engages the board, and wins their esteem in the process.  That is clearly a better way to manage the situation.

Framing the Board Relationship
The other thing that Joe got right was framing the board relationship.  Many, many CEOs see their board as a tax, a group that takes time, saps energy, and distracts from running the operations of the company.

Joe has reframed things:  he has framed the board not as a tax, but as a value creation partner.  This is another smart move that sows the seeds for a healthier long-term relationship among the board, the CEO, and the whole executive team.

And if you don’t get the framing of that relationship right, your board might end up singing one of Psycotic Pineapple’s top songs:   I Wanna, Wanna, Wanna, Wanna, Wanna, Wanna, Wanna Get Rid of  You.