The Three Best Ways to Work With Your Startup Board
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
When launching and running a startup, your board of directors is one of your most valuable assets. If you already understand why you need a board and how to structure your board, it may be tempting to think you can cross that item off the list. But building a board is just the beginning. Now you’ve got to get down to business—together.
I’ve spent a lot of time on boards—both as an employee director (like when I was CEO of Zillow and also on the board of directors) and as an independent board member (formerly at Zulily, TripAdvisor and Palantir, and currently at Varo Bank). Having seen things from both angles, there are three core principles that can maximize the potential of the incredibly important partnership between a CEO and its board: 1) Communicate, communicate, communicate. 2) Keep them close to the business. 3) Put them to work.
Let’s break it down:
1. Communicate, Communicate, Communicate
One of the biggest pitfalls I’ve seen leaders step into? Believing board meetings are a chance to share new information. These regular gatherings may seem like the ideal place to break the latest company news or bring up a new pressing problem for discussion, but that leads to directors feeling the opposite of how they should: out of the loop.
The best way to engage your board is to bring directors up to speed outside of board meetings so very little new information is presented at the meeting itself. Off-cycle communication, ideally in a one-on-one setting, can ensure everyone is up-to-date while also boosting director buy-in. I’ve found that an in-person coffee or Zoom lunch is my preferred way to get together—these human interactions are frequently more instructive and constructive than their digital counterparts. But the format is less important than the frequency. However a CEO or individual director prefers to communicate—email, text, Slack, or in-person—these discussions should happen at least once between each board meeting.
Another strategy that can keep connections strong is writing a board memo in advance of your next board meeting, a first-person account of what’s on your mind. At Zillow, I made it a regular habit to write my board a 3-5 page letter with high-level reflections on the state of the business. It’s certainly not a replacement for a 100-slide board deck, but it’s a personal touchpoint that can set the tone and tee up topics for the discussion ahead. The board letter is the perfect cover note to a formal board deck.
This kind of communication cadence can ensure that directors are never taken by surprise, especially in the board meeting itself. Consider board meetings less as a place for information sharing and more as a place for lively conversation that leverages their expert insight.
2. Keep Them Close to the Business
The board of directors may be at the top of the org chart, but they should be as close to the boots-on-the-ground operations as possible. Anchoring them in the-day-to-day keeps them focused on both mission and momentum.
There are several ways to do that. Say, for example, there’s a company off-site on the calendar. Inviting directors to that can help them gain a deeper understanding of the business while seeing firsthand how strategy is being translated into action. If you have a weekly or monthly all-hands meeting, invite directors once a quarter, especially if those meetings bring in customers or announce strategic shifts (though, as mentioned above, make sure not to surprise them with anything).
Simply put, the closer your directors are to the front lines of the business, the more engaged they will be and the deeper your working relationship will become.
3. Put Them to Work
Board members usually agree to become a part of your company not only because they believe in it, but because they believe they can bring value to it. If you aren’t asking your directors to contribute directly, you’re leaving tons of intellectual capital on the table.
The inverted pyramid of leadership applies here. That model says that an SVP actually works for their VP, a C-level really works for their SVPO, and a director really works for the CEO. Try to consider directors more as direct reports, tasking them with jobs and projects that tap into their unique expertise.
Consider asking for help with things like:
- Working with the CFO and the CEO to help strategize on raising the next financing round
- Identifying investor candidates or reaching out on behalf of the company to start follow-up conversations
- Diving a little deeper on marketing plans with the CMO and her team to share expertise and explore mentoring opportunities
- Interviewing potential candidates for key roles in the company (something I regularly do at Varo, and we’ve hired some great new people)
- Making introductions to other companies which are possible business development partners
Whatever your board makeup is, there’s so much often untapped opportunity there. Don’t let your board get bored, and your business will do better because of it.
- How To Structure Your Board: From Pre-Seed to IPO ›
- How To Startup - dot.LA ›
- Why a Startup Needs a Board: The Why and How of Constructing a Board Early ›
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Noramay Cadena (left, with her son) incoming chair of PledgeLA, receives a Catalyst Award for Emerging Manager in December. (With Qiana Patterson, PledgeLA Chair 2020-22 and Managing Partner of NAYAH)
Image Source: The McCourt Foundation
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