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Building boards that don't suck – advice for founders from Fred Destin of Stride.VC

Lucy Fuggle
04/04/19 00:42

"In my career, I've had boards that were toxic and damaging, and boards that really worked." In his talk at Turing Fest 2018, investor Fred Destin set out his playbook for how to avoid the former.

In 2018, Fred partnered with Harry Stebbings of The Twenty Minute VC to found Stride.VC, a seed fund that exceeded its “minimum viable target” of £50m seed fund in its first year.

With the slogan "Dissenters welcome," Fred and Harry are looking to do things differently. "We invest in companies that don't have any data yet, backing men and women who we think can reshape industries," says Fred. "It's what we think conviction investment is lacking."

"We invest in people we never have to change," says Fred. "We don't care if they're 19 or 60. We're looking for ambitious companies and crazy ideas, but founders who do the research... people we can back all the way."

Before founding Stride.VC, Fred was a partner at top-tier VC firms Accel and Atlas Venture, where we has lead investor in Deliveroo, Zoopla and PillPack, each of which has had their own approach to building a board that works.

Based on his extensive experience working with high-growth technology businesses, and ahead of his return to the Turing Fest stage this August, here are Fred's main lessons for founders looking to build a board that doesn't suck... 

 

1. Choose the right people

The wrong board can break a company, says Fred. Or, at least, it can make for meetings you dread. "Most entrepreneurs think the board is a terrible ordeal to go through every other month. It takes two days of prep from the team, they have to generate massive slide decks..."

"The VC may hold the key to your funding, they can get you fired... that's why founders tend to over-listen to their investors. Because, man, the power is effective. The worst offenders by far are the VCs, because they actually wield the power. And the VCs you can't fire, which is a bit of a problem." But as Fred explains, "the good news is it doesn't need to be that way."

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If you have a strong board, your VCs should yield their power responsibly. "Our ultimate job is not to tell you how to run the business," says Fred. "It is to advise you, help you, challenge you... and if some point in the future you're not the right person to run it, we should have that conversation."

Find people who are courageous, have conviction, are passionate about your business, and feel like part of your team. "And no assholes," says Fred. "This is one of the few places where you can go and cry sometimes, if your board works well."

2. Keep board meetings short and efficient

Fred gives Zoopla as an example of concise, effective board meetings. The board worked with Zoopla to set their KPIs, and they were the same "everywhere, for everyone" with the same visibility and objectives across the company.

Every board meeting, the CEO would give a short update (a "metronomical review of the business every month") which would always use the same slide deck, simply with updated numbers. "There was almost no prep, just the slide deck that took about 30 minutes." 

"The CEO was wonderful at only coming to you when he really needed advice, when there were strategic decisions to be made. Most of the time our board meetings were very quick on the numbers review, then we would choose a bigger topic to go into."

"There was only one big topic per board meeting, and short board minutes with about seven action points." 

Zoopla mastered the art of running board meetings at speed, with a maximum of two hours. 

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3. Be transparent, even if it feels risky

"Sometimes people say you have to be smart in the way you talk to investors. I disagree. If you're going to fail, fail on your own terms and proudly. If you're an entrepreneur, walk in and be like: this is what I'm good at, this is where I suck, this is where we need to execute better. If your investors can't take it, screw them. You have other things to do."

When Fred's team invested in Deliveroo, they had a team of 21 people. A quarter later, it was 300. Then, by the end of the year, 3000. "And the world's most aggressive competitor [Uber] attacking you in your core market."

"[CEO] Will Shu would come in his shorts, all sweaty, after doing a few deliveries himself, and would list two or three things that were real issues." "He was so radically transparent," says Fred. "He almost disarmed the board. He would tell you exactly where they failed. He was always taking responsibility for what wasn't going right."

"This was a person who was only interested in building the best company possible. He didn't care what you thought, or what he thought, just, we're going to build the best company we can. Transparency is an underestimated tool on the part of founders." When done well, it can also elicit transparency from board members in return.

"Yes it's more risky, but life is too short. Startups are too hard to have boards where you have to play a song and dance every month. We have enough shit to deal with in startups."

4. Don't ask your board to make your strategy

"Don't go ask your Dad what to do with your life. Don't ask your board what the strategy should be. Come with a strategy recommendation and if your board doesn't approve it, there's probably something wrong with it. It's your job as a founder to build a company on your terms. You know it better than anyone."

Fred also tells founders to carve out time for reflection. He emphasises that founders tend to know what their company should really be doing in their heart, but they don't listen to that.

"They don't stop and pause, to take three days away from the office and reconsider in their gut, in their mind, whether they're doing the right thing." There's a month-by-month pressure to perform that risks burnout and big problems that seem to come out of nowhere.

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5. Kill complexity

"Complexity is the biggest enemy to startups. Take away anything that stops you operating effectively and at speed," says Fred. Avoid legal complexity and keep your boards tight, controlled and trusted (see Fred's blog post on small boards).

One of Fred's go-to pieces of advice is a tried-and-tested Silicon Valley maxim: "Bad boards kill companies every time. Good boards do not make companies."

It takes careful curation and commitment, and a strong board isn't all you need, but if you're "thoughtful, careful, and yourself," you can build a board that helps to shift your strategy, bring in crucial hires, and transform your company's direction forward.


Join Fred and dozens more top-flight founders, execs and investors on the Lead track at Turing Fest 2019 this August, for more hard-won insight from one of Europe's leading tech investors!

 

Nothing beats being there. Get tickets now!

Join us in Edinburgh on 27-29 August, for two days of insight and inspiration at Turing Fest 2019...

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