What does it really take to build an effective board and foster a thriving startup community? In this episode of CXO Conversations, Brad Feld—venture capitalist at Foundry Group, Techstars co-founder, and co-author of the released second edition of Startup Boards—shares lessons from serving on more than 30 boards (and why he’ll never do that again). Brad also reflects on leadership, diversity, and culture in startups, plus a few personal stories—from hiking the Colorado Trail to the pivotal life experience that still shapes how he leads today.
For the full 40 mins interview: https://ocns.co/brad-feld-vc-boards-why-be-on-one-1st-timers-and-the-colorado-trail/
10 Min Clip Transcript
Brad Feld: [00:00:00] In contrast, I, I like to use the phrase, uh, culture add. And I like to, instead of saying culture, I like to talk about the culture of a company as the cultural norms.
Michael Mitchel: Alright, I’m gonna kick it.
Welcome to CXO conversations where we talk with industry leaders, CXOs and board members, about reaching the executive level. They also share insight and advice on how to reach the C-suite. Today, Bradfield, uh, joins us since the late 1980s. Brad has been a prolific investor and entrepreneur While he was well known for co-founding the Foundry Group, it’s in fact his third vc.
Brad is also very passionate about startups, innovation, and really views entrepreneurship as a community. Not just about unicorn exits. Today, Brad and I are gonna discuss, um, uh, and focus on board issues. This is an area Brad’s well [00:01:00] positioned to discuss having served at one point, um, on a whopping 30 boards simultaneously, which I’m sure we’re gonna make a comment about.
An accomplished author Brad Co-wrote Startup Boards, which just released its second edition in June of this year. Welcome to the conversation, Brad. I guess to kick things off, um, what’s a unique life experience? Uh,
Brad Feld: serving on 30 boards. I was gonna say, I read that line twice in the book, by the way, which was dumb.
Uh, and, uh, with the benefit of hindsight, uh, a huge mistake not to be repeated. Uh, life experience. I love, uh, to get lost, uh, in the mountains as a runner. I spent a lot of time as a runner. Uh, I am, I’m now older and I’m slow, so I have no illusions about, um, any actual accomplishments. But the idea of getting lost in the mountains for two or three hours at a time, uh, is, is a [00:02:00] joy.
And last summer I spent about a week on the Colorado Trail. And which for those of you, yeah, dunno, the Colorado Trail, it’s about a 500 mile trail across Colorado from. Front range in Denver, down to Durango. And um, I did about a hundred miles of it, and it was an incredible experience.
Michael Mitchel: What segments did you do?
Brad Feld: Well, I started at the beginning.
Michael Mitchel: Yeah.
Brad Feld: Uh, I did the first segment and then, uh, I hadn’t camped, uh, for 30 years, so camping was new and I played around a little before. Sleeping in my tent, but I hadn’t really done much camping. And in the middle of the first night I had to pee. And I hadn’t realized yet that guys have an advantage, which is that if you just bring a a, a bottle into the tent that has a wide enough yep.
Neck, you can just stay in the tent. So, um, and as I stepped outta the tent in the middle of the night, I stepped on the tent steak and sliced open, uh, in between two of my toes. And it, [00:03:00] I still had to pee. So the campsite in the morning looked like a murder scene, um, because it’s just blood dragged across everywhere.
Uh, and I went off the trail for a couple days. Yeah. And I just, like, I didn’t know how bad it was. It was clear if I didn’t take a couple days off, I was gonna get infected. Um, and it healed enough that I went back on the trail, but I skipped to segment five. Because I’d already done segment four and segments two and three kind of looked like I was gonna do ’em in a day.
They weren’t that significant. No. So I did about segment five to Twin Lakes, which I don’t remember the number, but like 12 or 13, something like that. Um, and so, you know, I got a bunch of the front range elevation up to 12, 13,000 feet and then hung around between 10,000 and 13,000 feet for about four or five days.
Michael Mitchel: Yeah. Wasn’t the BRE to uh, copper Special? Um, I, I mind hurting. It was mind hurting. I, I did a, I did 108. I went to, I did it last year too. I did it to, to Twin Lakes. Oh yeah. So I started at Waterton Canyon and got as [00:04:00] far as Twin Lakes and the wildfire smoke chased me off. I’m, I’m thinking a timeframe. Were you doing it?
Um, I started in July. Had a step off for a bit ’cause I had a blister to size a Maine. On my foot. Um, by the time I got back on it was August, so we probably were, you know, somehow overlap pretty close. I started,
Brad Feld: I started June 21st, and then went back on like, I think the 25th of,
Michael Mitchel: oh, I, I was hearing about all the rains in June.
Brad Feld: I missed the, I missed the rains. The rains were just starting. Yeah. So I, I kind of got lucky, or sorry, the rains had happened and then there was another set of rains and I was just kinda like in between. We had like one night that was really nasty, but it wasn’t too bad.
Michael Mitchel: Okay.
Brad Feld: But the, just just for your listeners, the.
Bre to Copper thing. I think most people, if you’re not, even if you’re not Coloradans, you know that Breckenridge and copper are two ski resorts that are relatively close to each other. One of the segments climbs over basically Copper Mountain. You go from Breck over the mountain Yep. To copper, and it’s 3000 feet up and 3000 feet down, and, uh.
The down is just as [00:05:00] hard as the up was for me
Michael Mitchel: because it’s so steep. It was so steep,
Brad Feld: and I remember getting to the very top of it and thinking, what am I doing? Like it, it just, your brain is like, I’m so tired of one foot in front of the other and it’s only 3000 feet of vert. It’s not even that much, but it was intense.
Michael Mitchel: I, I, my wife was so overhear, uh, we’ll get to the podcast in a second. My wife was so overhearing about my pack weight and how much my, because I was obsessed with the gear. I had my base weight done like 15 pounds and I included a pound of watercolor. ’cause I like to paint on the trail. Um, I could talk about the trail all day long.
Brad Feld: Um, so, uh, people didn’t, people didn’t join this podcast thinking, oh, we’re gonna learn about. Colorado Trail today. Yeah, exactly. You never know if you’re gonna get on a thing like this.
Michael Mitchel: You know, one thing that I was texting with Wendy, a mutual friend of ours, uh, the other night was, it occurred to me as I was reading your, your book, um, and I, I mean, you’re well known in a community.
Obviously, we bumped into a couple, a couple times each other, like a Denver startup Week. Any number of years ago you could have retired. As a successful venture capitalist, but [00:06:00] it really seems to me that’s not been your driver. It’s, I get the impression you view the VC startup environment more as a community.
And my question for you is, where does that come from within you?
Brad Feld: Probably a couple things. I sold my first company when I was 28 and I was living in Boston and for a brief period of time, Amy Bachelor and I, my wife, uh, and I contemplated moving to Alaska. So, uh, Amy had grown up there. I grew up in Texas.
She likes to tell me that if you divided Alaska in half, Texas would be the third largest state. But, you know, I’d made enough money from that, uh, that sale where we could happily just check out.
Michael Mitchel: Mm-hmm.
Brad Feld: And, uh, neither of us felt like we were ready, like we were too young. You know, we, I’d learned a lot from that first company.
I didn’t have a huge like, and now I need to achieve this in front of me more than, this is interesting. I’ve got a lot more to learn and now that I’ve got some experience, uh uh, that’s significant, I can [00:07:00] apply that experience. We moved to Boulder, right? That’s when we moved to Boulder in 1995. And when I moved to Boulder, uh, I knew one person and he moved away within the first six months.
So I didn’t move to Boulder, uh, for any reason other than it was random. A random place that we wanted to move to that was not in the Northeast because we were, you know, Boston had been good to us, but it wasn’t home for either of us. So I think that leads to the second motivation, which is when I got to Boulder, I mean, I didn’t really expect to do work in Boulder.
I just expected to live here. And very, very quickly I started to build some friendships with other entrepreneurs in Boulder, because Boulder had a, even in the mid nineties, had a lot of entrepreneurial activity.
Michael Mitchel: Mm-hmm.
Brad Feld: But it was very diffuse. It wasn’t really focused or well known in the shtick on sort of Boulder in the front range in general in Denver.
From the coasts was, yeah. You know, the people there, they don’t work very hard. They go skiing in the middle of the day. You know, you get outta your door and you get on your mountain bike and the answer is yeah, you get outta your door and you go on your mountain bike ’cause you don’t have to [00:08:00] commute for an hour each way to work.
And we got mountains in our backyard, but doesn’t mean we don’t work hard. A lot of entrepreneurs worked very, very hard and there was a lot of intensity and some really successful companies. And you know, sort of through the 95 period through the internet bubble. My work was, was very national. I traveled constantly this period of time that we were joking about when I was on 30 boards, which included some international joint ventures and some public companies.
I mean, I, you know, I was on the road basically, you know, Monday through Thursday or Friday, three outta four weeks a month. So I really wasn’t in Boulder that much other than when I was in Boulder. I was with the friends that I’ve made and I made some investments in Colorado, but all over the country when the internet bubble crashed.
And after I’d sort of cleaned up all the shit that I had to clean up in 2001 and two and maybe 2003, you know, I started thinking more about Boulder coming out of this, uh, internet bubble crash. And by 2004 five there was a [00:09:00] lot of entrepreneurial activity in Boulder. And then we started Techstars in 2006.
So sort of in this period where, you know, I was in my early forties, we were just starting, 2007 is when we started Foundry. I became very fascinated with this idea of, uh, startup communities where didn’t exist. The phrase didn’t exist, I wasn’t using it back then, but the idea that you could build real significant entrepreneurial activity in lots of places all over the world, which had really been my experience, but was counter to the conventional wisdom that if you were really serious about building a company, you had to go to the Bay Area,
Michael Mitchel: right?
Brad Feld: And, and so that became very interesting to me, and that’s been woven through all the work that I’ve done as an investor. And you know, why not retire and just spend all my time on that? You know, for many years I felt very responsible to the companies that I’m investor in. I feel very responsible to my partners at Foundry and responsible to LPs.
And much of the work that I was doing [00:10:00] for on the VC side was positive reinforcing of a lot of the things that were intellectually interesting to me. I was able to link the two together in a way where the work was quite satisfying, even with all the ups and downs and successes and failures of what was going on.
So I, I think those are probably, you know, the, the, the lead into it. And then, you know, the last is, as I’ve gotten older, it’s been very rewarding to me to. And it’s weird to me to feel old. I was the youngest guy in the room for a long time.
Michael Mitchel: Yeah.
Brad Feld: And, and I knew what it felt like to be the youngest guy in the room.
I’m now often the oldest person in the room, and that’s just weird to me. Um, but it’s been very rewarding to help younger entrepreneurs and help younger VCs. Both, you know, in organizations that I’m directly involved in, but just sort of more generally as this phenomena of, of entrepreneurship globally has really taken hold.
Michael Mitchel: Mm-hmm.
Brad Feld: And you know, in 2022 there’s no, people don’t talk about, you have to be in the Bay Area anymore. In fact, there’s some very famous, [00:11:00] very well known, you know, bay Area. It, it’s all about the Bay Area that have recently said. You know, uh, nah, actually you can do this anywhere. Or, you know what, we’re gonna become virtual now.
Or, I saw the,
Michael Mitchel: yeah, I saw the movement people coming in from the Bay Area in 19 and then I think 2020 really accelerated that movement. Yeah. Yeah. Um, what would you say is, you know, when, when you look at the, what are one or two most common misperceptions of serving on a board?
Brad Feld: I think the two perce misperceptions are fundamentally the role of board members, especially at earlier stages, and then the dynamics around control.
Mm-hmm. So the role of board member, you know, boards go through phases or companies go through phases, right. The raw startup with a couple of people in an idea. The board and the activity of board members at that stage is very different than the role and activity of the board members when the company’s 20, 30, 40, 50 [00:12:00] people and different again, when the company is 500 people are going public.
And in the book we try to define, divide these into three different stages. In that, in all cases, I think a lot of board members don’t embrace the notion that they really only make one decision about the company, which is whether or not they support the CEO and if they support the CEO, they effectively work for her even though they can fire her.
Michael Mitchel: Mm-hmm.
Brad Feld: But, but their job is to try to help the CEO be successful. There’s a lot of other things board members do, but that’s fundamentally the one decision. And yeah, you make decisions and take votes and approve things and stuff like that, but philosophically, if you carry that all the way through from very early stage boards that are very working board oriented, you’re trying to help the founders.
You’re trying to help the company get going early on. Or that mid stage where you’re trying to help the company get from product market fit to really scaling now and growing, or the later [00:13:00] stage when a lot of the governance stuff comes into place, especially as the company gets very large or goes public.
Michael Mitchel: Yeah,
Brad Feld: but you know, again that that common thread of do I support the CEO if I do my job is to help her be successful. If I don’t, my job is to do something about that, which doesn’t necessarily mean fire her. No. Maybe we’ll talk about it. There are plenty of other board responsibilities, but the philosophy is the thing.
I think that so many board members, especially in early stage and venture-backed companies, miss. Um, the other is control. Yeah. Which is the dynamics of control between various constituencies of the board and the ownership characteristics of the company and the different classes of stock. So when you take money from an investor.
And certainly from a venture investor, but for most investors, including at early stages that the instrument they generally get when it converts into stock early on it might be a convertible node or a safe or something like that, but [00:14:00] generally it converts into preferred stock. And in the preferred stock agreement there, there’s a lot of information about who has what kind of rights, um, and their.
Commonly called protective provisions, and even though you have a board where the founders may control the board in terms of number of people or number of votes, the investors may control a lot of the decisions of the companies based on the protective provisions.
Michael Mitchel: Right?
Brad Feld: In addition, a lot of times you have.
Different numbers of board members on the board from different constituencies, but in most cases, unless you’re in a real conflict situation, you’re not voting and choosing, you know, three to two or four to five or something like that. It’s generally consensus driven unless you have conflict. And when you have conflict, the number of votes people have, uh, or that each category has on the board doesn’t really resolve the conflict.
In some ways, it makes a [00:15:00] conflict worse. And so this dynamic of how to build an effective team, knowing that there’s gonna be lots of ups and downs, lots of challenges, plenty of situations where investors and founders are gonna disagree. Lots of situations where you have a CEO change or you have a founder depart a business, or you have the need to change.
Do something about the capital structure of the company that may not be advantageous to the founders or advantageous to the. Early investors, like all of those things are the practical realities of growing companies. And yeah, the board has a lot of influence on it. If you configure your board correctly and thoughtfully and understand all the different parameters, you’ll be fine.
If you try to use control as the only vehicle,
Michael Mitchel: mm-hmm.
Brad Feld: And you find yourself in those situations as a founder or as an investor, you can find yourself very surprised. By the way, those things actually shake out.
Michael Mitchel: Well, when you’re, when you’re interviewing potential board [00:16:00] members, what are you looking for? Uh, in the reason for one, to serve on a board.
Brad Feld: Yeah. Well break it into two categories, and I’ll answer from a CEO’s perspective rather than from a VC’s perspective. You’re, you’re really generally beyond the founders. Adding two different categories of board members. You’re either adding investor board members, so people who have invested in the company, they get a either a board seat by right, with their investment, right?
Or a class of investors. They get to choose a board member or uh, you’re having an independent board member join that’s not involved in the company and that’s not involved with one of the investors, but again, could be appointed by. The common stock could be appointed by the founders, could be appointed by the investors, or could be appointed by mutual agreement.
So lots of different flavors of the person. I think in general CEOs, and I think it’s true whether you’re the entrepreneur, CEO founder, CEO, or whether you’re a brought in CEO, is you’re looking for [00:17:00] board members who are additive to the existing board construct. There’s a phrase that I find, uh, deplorable.
It just one I hate that became front and center in entrepreneurship 10, 15 years ago, which was culture fit. And it’s a phrase, like another phrase that I think should just be deleted from the vocabulary of entrepreneurs, which is meritocracy. Um, both of the phrases are for different reasons, really stupid and problematic words or phrases.
Culture fit is particularly bad. Because what it implies is that when you add new employees to your company, you want them to have quote, culture fit. This is not a negative on culture. I think cultures are a very important part of every company, but you don’t want to use this concept of cultural fit because it generates monocultures, right?
And it generates viewpoints as well as experience, as well as range. That [00:18:00] is very insular. I
Michael Mitchel: couldn’t agree more. In
Brad Feld: contrast, I, I like to use the phrase. Culture add. And I like to, instead of saying culture, I like to talk about the culture of a company as the cultural norms. And I think it’s the purview of the entrepreneurs.
They’re founded the company, they get to define the cultural norms. And oh, by the way, cultural norms evolve and change over the life of the company. And, uh, if, if you’re like, I don’t know what you mean. A very famous one is Google’s cultural norm. Very early on, whether you believe they actually executed this way or not separate issue, but a cultural norm was do no evil.
And there was a moment in time somewhere along the way, in the early 2000 teens, I don’t remember what year, where that just disappeared. It disappeared from their website. It disappeared from their language and it disappeared from their cultural norms. And I don’t, I wasn’t part of any of those discussions, so I have no idea why it disappeared, but it did.
Michael Mitchel: Yeah.
Brad Feld: And that’s normal. Like companies go through evolutions, um, as the organism that they are, [00:19:00] but the founders get to drive those norms. But in the context of those norms, you want culture add, you want to add people to the team that extend the business, that extend the norms, that will understand what they are and challenge them in a way that’s constructive to help evolve the norms.
So I like culture add, and that’s how I would talk about it on the board, not just culture add, but capability add. If you’ve got three board members that are VCs, you don’t need another VC on the board. If you’ve got two people on the board that know how to do m and a really, really well, you don’t need another person knows how to do m and a.
If you’ve got nobody on the board that has any product expertise and has never been a CPO of a company, you need that person. If you don’t have a person on the board who’s been a CEO. As a CEO, you’re gonna be pretty lonely. Like one of the best things you could do is get a peer CEO on your board.
Somebody else who’s been in your seat, who understands what it’s like to be a CEO sitting on your board. And when your knucklehead venture capitalists like me are [00:20:00] saying something, although I’ve been a CEO, it was a very long time ago. Mm-hmm. When they’re saying something that CEO pipe seven and says, yeah, that doesn’t work in today’s environment.
Like, you know, Brad, you’re living in 1988 when you were running your three person company. That’s where that experience,
Michael Mitchel: you need someone who can share the war scars with you. Pardon? You need someone who can share the war scars with you.
Brad Feld: Yeah. And it’s, but again, you want that spectrum across all the functional capabilities.
Yeah. And it’s not that you need 27 people on your board, but as you’re adding board members, you know, take stock of what you got. Um, the other thing which I think is important to say is, you know, when we wrote the first edition of the book in 2013. I’d already been very involved in gender equity in tech.
Going back to 2005, ’cause I was the founding board member of an organization in Colorado called National Center for Women Information Technology that today is about a $20 million, uh, nonprofit affiliated with cu, but independent nonprofit that’s had enormous influence on gender equity within computer science, uh, and tangentially within entrepreneurship and [00:21:00] innovation around that.
But even in 2013 when I wrote this book. To show how, how easy it is to miss on the, these types of issues, issues around diversity. We have a bunch of sidebars in the book, maybe. 20 written by CEOs and investors talking about a couple lawyers talking about different board issues. And we had a bunch of quotes, I don’t know, 20, 30 quotes from people.
Mm-hmm. Almost all of them, not all, but almost all of them were from men.
Michael Mitchel: Right.
Brad Feld: And you know, when I reflected on that, when we started working on the second edition of the book and we got some feedback, we got some feedback from some, you know, women in our network who we asked to give us, you know, feedback on things we can change.
I had one woman say, you know, CEO. Say to me very, very directly, this book just doesn’t speak to me. I, I don’t meet a single woman until page 82, you know, and, you know, come on, you can do better than that. And I, I, and the answer is yeah. And so we did, we refactored all of the sidebars and all the quotes. So it’s on a gender basis, [00:22:00] it’s roughly 50 50 male, female, and on a people of color we’re very included in that.
So we worked hard to get a number of, of, uh, both men and women. Um, who were not white, who would write either a sidebar or, uh, we quoted them in terms of their board experience as either an entrepreneur or CEO. Um, I would, I would put that in the category too. I mean, I think, um, maybe three years ago, four years ago at Foundry, we talked about it and several of the partners, uh, myself, uh, Chris Moody and Seth Levine, um, all, when we looked at our board compositions, all decided our boards were very overweight, uh, white male.
And, uh, in 12 months, all of us, uh, actively worked with the CEOs of most of our companies. Not a hundred percent of them for various reasons, but almost all of our companies to get at least one, uh, uh, woman on the board. Uh, I think at most boards that I’m on, not all, but most have at least one, many have two, a couple of boards have three, [00:23:00] and in most of the boards, uh, there’s at least one person of color now on the board.
Um, you know, it was just deliberate. It was deciding that the businesses and the boards would be healthier, especially with so many CEOs talking about diversity initiatives within their company. You know, if you’re a board that has a diversity initiative, uh, and you know, it’s part of the discussion of the cultural norms of your business and all your board members are white men,
Michael Mitchel: right?
It’s a really,
Brad Feld: no, it so, so it’s just, it’s just knowing that you wanna add to it in a way that. Is still a very functioning team, but gives you lots more range in terms of the experience, perspectives, skillset, lived experience, behavior, learnings, diverse voices, and work to bring that team together.
Michael Mitchel: Yeah, for me it’s all about diverse voices.
It’s not about just an optics or uh, headcount. It’s about the diverse voices that comes with, with folks of different backgrounds. Absolutely. Um, what do you see as the common [00:24:00] missing trait when in board members?
Brad Feld: There’s probably a couple of things that come up over and over again. You have a lot of board members, especially first time board members who are operators in businesses that don’t understand the difference between providing data and say, you should do this, and so this, this difference be between commanding or, you know, operating in the context of a board member.
There’s a, a wonderful cliche. Cliches tend to be popular. I like to think for two reasons. Either because they, they really say something or it’s just something that gets repeated over and over again, which actually is not helpful.
Michael Mitchel: Mm-hmm.
Brad Feld: I try to, when I hear a cliche, I try to separate ’em into both buckets and I try not to do the ones that are not helpful, that people are just repeating and amplifying.
Um, this one I, I think, is particularly helpful for board members, which is nose in, hands out.
Michael Mitchel: Mm-hmm.
Brad Feld: And the idea is that you, you put your nose in, like you understand what’s going on in the business. But your hands out, you’re not operating the business, you’re not functionally engaged in it. Mm-hmm.
Unless invited in. There are situations [00:25:00] where a board member can be very helpful on a specific thing or to a specific member of the leadership team or a functional area of the team. And you know, CEOs should. Actively invite board members in to help where they can. But board members should not just show up and en mesh themselves, uh, in them a little trickier at the very early stages of the company, especially if you have a very active working board with a very small number of people.
Michael Mitchel: Yeah.
Brad Feld: But same kind of thing, like understanding how to communicate what the right rules of engagement are. The CEO establishing that and everybody agreeing with it, and if you don’t agree with it as a board member, talk about it and get to a place where you agree with like understanding. That’s another trait that’s missing is that sort of understanding of that.
I would say a lot of board members, especially in moments of time, moments in time, and. I’m for sure guilty of this are, are lacking empathy of what’s actually going on amongst the team or the people that they’re interacting with.
Michael Mitchel: Hmm.
Brad Feld: There [00:26:00] are plenty of examples I can give of stupid shit that I’ve said either to a CEO or to a leader on the team or in a board meeting to, you know, when the whole leadership team was there where I, I wasn’t really hearing what was going on and as a result.
I wasn’t empathetic to what the challenges are. And so then when I said something, it was very at cross purposes with what the conversation was, or very unhelpful or off-putting. Yeah. And in some ways just, you know, misdirected the energy of some people into a different place. I probably did that more when I was younger than I do now.
Uh, even though I still probably talk a lot, uh, in board meetings on a relative basis, but I, I’ve tried harder to. Um, to make sure I’m understanding what’s going on. But that’s a trait that’s very, um, uh, uh, uh, very obvious in a lot of cases. I, I would add one other piece to that, a trait that’s missing. I think there’s a lot of board members, uh, especially first [00:27:00] time board members, but not limited to them who haven’t really had either a good mentor to learn from about how to be a great board member or have never gone through an onboarding with a company.
As a result, have never really had any sort of formalism around being on a board, and as a result, there’s a real lack of understanding of what the actual real roles and responsibilities are. I think a lot of board members that then become multi, multi-time board members learn that by just osmosis and experience of being on multiple boards, you see it.
But this is a first board member problem that I see regularly, especially in situations where the person is absolutely board member ready, uh, or you know, board, board ready, but no one has bothered to sit down with them and they have not proactively forced somebody to sit down with them in the company and say, walk me through the [00:28:00] cultural norms.
Walk me through what the expectations are. Walk me through what. Are things I need to be careful to do or not do in the context of this, this board. And then, you know, two years later, the person still feels out of place because they really don’t have a sense of how to be part of the functioning team.
That is the board.
Michael Mitchel: Yeah. How does someone know when they’re ready for a board seat?
Brad Feld: Yeah, we have a whole section in the book on this. Um, I think historically, I’ll give you a, a, a thing that I’ve heard over and over again from CEOs and, uh, you’ll hear it if you, um, uh, you, you know, just ask a random CEO hey, if you’re thinking about adding a board member, like, you know, what are the, what are the key traits that you’re looking for?
Michael Mitchel: Mm-hmm.
Brad Feld: And regularly, one of the top two trades is exper board experience. And, um, I think that is. Incredibly limiting. Um, and I’ll use myself as an example. I was once a first time board member, [00:29:00] um, and in fact the first board I was on, I wasn’t an investor on, I was an outside board member, and the company that bought my first company happened to be a very large user of this techno, this particular company’s technology.
And they were looking for a CTO to add to the board. I was playing CTO or I was the CTO of the company that bought mine, and I knew their product well and. I had no board experience and I ended up being on that board for three or four years and having a pretty significant impact on the company. Um, and a good, both a powerful learning, we had lots of conflict that I had to navigate through.
We did a couple acquisitions. Um, I had to figure out the boundaries around friendships between people and the breaking of those friendships.
Michael Mitchel: Yeah.
Brad Feld: Um, you know, including, you know, longtime relationships, A CFO, who was still on the board, uh, an ex CFO of the company who was on the board because they were a major shareholder and now investor, but who had a lot of conflict with the ceo, things like that.
Yeah. Um, but, you know, [00:30:00] somebody gave me that opportunity. So I think it’s, uh, I, I think there are way more people today. Uh, that are board ready. I think there’s a lot of organizations that are helping with that. I’m an direct investor in a company called Bolster that, uh, is a marketplace for executive talent.
And one of the things that they do is they help recruit board members and they’ve got programmatic activity to help get people, board member ready, executives board member ready to be an outside director. I’m a big supporter, a number of other people, including Reid Hoffman. And Jeff Weiner of uh, uh, you know, Reid was the founder of LinkedIn, and Jeff for many years was the CEO of LinkedIn of a company called him for her.
Michael Mitchel: Mm-hmm.
Brad Feld: Uh, bolster has a relationship with them as well. They’re a nonprofit. Focused on getting more women on private company boards and they’ve done an extraordinary job across the industry, but also for the Foundry portfolio. I think we’ve probably now had almost 20 board members that have come through, either them or them, plus [00:31:00] bolster helping us recruit to the various boards that I was talking about earlier.
So there’s a lot of these organizations that are not just recruiting for people, but they’re actually providing content.
Michael Mitchel: Yeah,
Brad Feld: community. Group meetings, training for potential board members to help those board members understand how to be effective. And then last comment on this one. Um, I, I think the, uh, the world of private companies has grown so much that there’s so many more opportunities for first time board members to get on boards and have the experience so that then their second time and third time and fourth time board members.
Yeah. And I think that that’s something that CEOs and and founders should embrace.
Michael Mitchel: Yeah, the, the first time board member aspect really fascinates me because I, you know, when, when I’m I doing search, I, I come across folks all the time who are like, I wanna be a board member. First thing I ask ’em is why I.
And more often than not, this probably won’t surprise you, I get silenced. ’cause [00:32:00] they don’t have a real reason why they wanna be a board member other than the fact that I think there’s some vanity involved, or they think they should be at their stage of their careers. But what’s the, I mean, you know, what are important skill sets to have as a first time board member?
Is it, you know, subject matter expert? Is the financial literacy strategic capabilities transaction? I mean it, I guess it depends on what the company needs in that board, but I really think that there’s a. People need to think more strategic about why you wanna be a board member. What do you wanna bring to the table?
Brad Feld: Uh, I, I think you said something at the very beginning of that, that I would reinforce. I think being on a board, uh, for your resume or for vanity is totally the wrong reason to have even on your list. I mean, we’re humans and we have egos and that sort of thing, so I’m not trying to suggest that people subjugate, um, you know, their, their, their own ego or sense of worth, but the actual experience of being on a board.
There’s a, there’s, I’ll, I’ll use a line [00:33:00] that I love Jeff Lawson. I heard it from him first, so maybe he came up with it. Jeff. Jeff is the CEO of Twilio.
Michael Mitchel: Mm-hmm.
Brad Feld: He said, as CEOI get to create two teams, my leadership team and my board. And he acknowledges that the board can fire him. Right. He says they board can replace me, that’s their prerogative, but if I’ve got ’em, I may as well make ’em into an awesome team, and I may as well get as much out of ’em as I can as the CEO to help build and grow my business.
Yeah. Brilliant framing and. I think for a board member, you know, they’re joining a team and if they’re serious about, if they care about the company, the founder, the CEO, the mission, the product, like whatever it is, and that is interesting to you and you’re willing to be part of a team to try to help the thing the company be successful and the CEO be successful.
That’s a reason to join a board. If it’s, I want to feel better about myself, I wanna put something on my LinkedIn, I think I can get a better job or raise it. Yeah. Those are not good
Michael Mitchel: reasons. Yeah. That, that’s gonna come out during the interview process. And they’re gonna get, they’re gonna get screened out.
But what [00:34:00] came through in the book is some of the basics of being a good board member, being engaged, attending the meetings, being on time. Right. Um, mentally being there. I, I think, you know, some people might think board meetings are like a star chamber, but they’re not. Uh, do you feel like people over-engineer.
Um, being a board member or underappreciate, what’s involved?
Brad Feld: Oh, sure. And I mean, let’s go back to the joke you made at the beginning when I was on 30 boards. How, how could I possibly be fully engaged as a board member in 30 companies? Yeah. And the answer was, I worked really, really hard, but no, like, you know, I was late, I missed meetings.
You know, I, I, I wasn’t able to deal with the nuance from one company to another because I had just too much that I was trying to handle at the same time. And, you know, whether I’m. Capable of a large number of boards or not, like, let people decide that for myself, my own self-reflection on it is just the, the fundamentals of participating and participating actively versus passively is key.
Michael Mitchel: Mm-hmm. Now,
Brad Feld: you know, being [00:35:00] a board member is a lot easier than being an operating executive and it’s a lot easier than being CEO.
Michael Mitchel: Yeah, with
Brad Feld: a few exceptions. I mean, there are moments when the shit really hits the fan in a company and as a board member you have a lot of intense work. You know, those moments tend to be when you fire or replace a CEO, uh, when you have real legal issues within the company, whether they’re fraud or, or regulatory issues or something that is significant when you have real internal HR issues that are, that are systemic, uh, whether they’re from the CEO or another, uh, executive, uh, executive leader.
Uh, and I could keep going, right? Yeah. So, you know, m and a situations, oftentimes financing situations, especially financings that are. That are complicated or that are at down rounds or that are recapitalizations. And so, you know, being able to really be available and show up, not just, Hey, I come to a meeting once a quarter, but you know, when that stuff happens, you have to be able to get into it.
And you have to be, um, willing and able to [00:36:00] both express a point of view, but also be part of a team where you’re not the one making the ultimate decision. Um, and, and that in and of itself. Has has some intensity for a lot of people, especially ones who are used to making their own decisions.
Michael Mitchel: So in the book you cite a Harvard study that 40% of the founders made it to year four, 25% led their company to the IPO stage.
Um, why do you feel that that’s such an attrition rate to get to that point?
Brad Feld: Well, I think this is, um, I think some of it is just the historical arc of, uh, of how companies grow and scale.
Michael Mitchel: Mm-hmm.
Brad Feld: By the way, it’s not just with CEOs or founders, I should say, as CEOs. I think it’s also true for board members.
Um, being a board member doesn’t mean that you’re a board member for life of a company. And in fact, the best boards have, uh, terms for board members. Maybe it’s a two year term, maybe it’s a four year term. Um, yeah. You know, Matt, Matt has some very, uh, Matt [00:37:00] Uhlenberg, the co-author of the book, who is the CEO of Bolster, has some very specific ideas that he’s implemented over many years.
By the way, I was on Matt’s board at his prior company Return Path for, uh, for 20 years. So, you know, you can be on a board for a long time, but we had, you know, plenty of board members that would be on the board for two years or four years that had sort of a, um, a, a period of time where they were helpful and then a period of time where they weren’t.
Um, I think that, you know, as you scale up a business. Some leaders, like Matt can go from a, a startup to a 500 person company. Um, you know, that’s a large, uh, in their case private company. But that was, uh, that was a nice, healthy, profitable business. Mm-hmm. In other cases, you know, at 10 people, the, the founder is not.
Right. CEOA good. Another Colorado example, return Path had, you know, New York based company, but had a big presence in Colorado. Another Colorado example that I put in the other end of the spectrum would be, uh, SendGrid.
Michael Mitchel: Mm-hmm.
Brad Feld: Which, uh, came outta Techstars and was a very, you [00:38:00] know, rapidly growing company.
Three founders. One of the founders was CEO. He, they came up with something that really sort of. Hit, hit a market seam, which was the ability to, with, you know, almost no code generate transactional email. And, you know, many companies started adopting them and I think, you know, very shortly after they got their first round of funding, their revenue wasn’t a huge number yet.
Maybe it was 25 or $50,000 a month. But the CEO at the time, the founder, Isaac, basically said, I have no idea what I’m doing. I’ve never been a CEO before. This thing is growing like crazy. I think I should be CTO, but I think we should bring in, you know, some title. I don’t know what his title was, but yeah.
One of, uh, you know, one of the technical founders or whatever, and I think we should bring in A CEO. So we brought in a CEO, very experienced, uh, very experienced multi-time CEO, uh, when the company was probably 20 people, and he was CEO of that company until the company hit about 40 million in revenue. He did a great job getting the company up to a certain level, maybe.
20 or $30 million in revenue. But [00:39:00] then he sort of hit his level Yeah. Of what he had experienced and what, uh, he had done well. And now he, he was starting to struggle with, with scaling the business up. And in Ingrid’s case in particular, the business slowed very, very growth slowed significantly, and the board ultimately decided to make a change and recruited a new CEO.
And that new CEO uh, Samir Deia did a spectacular job of taking the business and reinvigorating growth and making a bunch of choices and getting rid of some stuff and turning over some of the leadership team and re-energizing the company. But while maintaining the cultural norms of the company, um, versus, you know, showing up and replacing the cultural norms with new ones.
That original founder, CEO, Isaac, was still at the company, was still actively in the company, was still on the board. Through each of those shifts. And then when SendGrid went public, you know, Isaac continued to stay for some period of time. And you know, Samir scaled the business up as a public company and then ultimately sold it to Twilio.
Um, [00:40:00] but like even in that case, you see sort of the natural, the self-aware founder that says, wow, I think we have something here that could be enormous and I’m not the right, right guy to be the CEO of this thing right now. And, you know, if you said to Isaac, were you glad that you brought in another CEO?
Isaac would say, Ugh. So glad.
Michael Mitchel: Yeah.
Brad Feld: Um, for many reasons. And if you said, well, you know, you were part of the whole thing with, uh, the transition to Samir, were you happy about that? And I think he would say absolutely because where we ended up, you know, we could have had a $200 million exit, you know, at the time that, you know, we sort of were made the transition to Samir and we ended up having a two or $3 billion exit depending on how you value the Twilio stock at the time.
Which then increased in price another two or three times. Right. So, yeah. So that, that dynamic’s just normal. Let me add one thing to that story, though. You know, the board in that is incredibly important and I think it’s very hard. Uh, the first CEO [00:41:00] change was very easy for the board ’cause uh, Samir or, uh, Isaac wanted it.
And, you know, it was, it was an early stage board and it was very collaborative. Later on the, the next transition. It was very challenging and it was very challenging. A lot of tension, a lot of stress between the board, the CEO at the time, the leadership team at the time, you know, all the interactions around that.
And also just, you know, the overall dynamics of the business. So tension that I would categorize not as people throwing bricks at each other.
Michael Mitchel: But just hard. But also I would jump in, I would say it’s also a testament of a true leader who can say, you know what, I’m not the person to take it to the next stage.
Absolutely. I mean, that’s a hard call to make and so to, to be able to say that you’re, that person’s really is focused on the company and the vision, not the ego.
Brad Feld: Well, and if you know, if you know Isaac, you would understand that that very much is his ethos. Is he? Yeah. You know, unbelievably thoughtful.[00:42:00]
Self-aware, generous, ambitious. Yeah, very. I would say at the time that he was having to deal with some of this stuff, you know, as a first time entrepreneur, very mature, well, well mature beyond his own individual experience of dealing with all the pressures that come from all of these things.
Michael Mitchel: Well, before we button up this interview, uh, I always ask everybody, excuse me, what was the worst job you’ve ever had, and what skills did you gain from it you still use today?
So, like my example is in college I cold-called for a VP at Smith Barney. Worst job ever. However, it served me well. So
Brad Feld: my first job or my worst job didn’t serve me that well. Um, uh, the job I had after that probably did. Uh, and I’ll, I’ll just tell those two stories quickly. Back to back. The first job I had was.
Um, I was a serious tennis player as a, uh, as a kid, as a teenager. And, uh, you know, I belonged to Ract Club and when I was finally starting to be old enough to get, you know, real work, I think 14 or something like that, [00:43:00] uh, I got a job at, at, at the Ract Club that I played tennis at every day in the summer.
Michael Mitchel: Mm-hmm.
Brad Feld: And I would spend the whole day there. I’d play, you know, 6, 7, 8 hours of tennis sometimes. Um, um, I had two really close friends and they got the job that I, we all wanted the job, which was a job in the, in the grill, uh, you know, making food for people in the outdoor grill. Now, I have no idea why I wanted that job.
It’s Dallas, Texas in the summers, a hundred degrees, and working inside a grill, making hamburgers for people. That humidity, why I wanted that, but that was the job. Um, I, I was deemed not mature enough to take, get that job. And go figure what that means. Wow. I was a pretty, I’m, I’m a pretty mellow guy as an adult.
Um, I was a pretty angry tennis player. John McEnroe was my favorite tennis player, so I screamed and yelled and swore and throwing rackets and lots of shits and fucks on the tennis court as a 13-year-old. So I’m sure that had something to do with it. So the job I got was, was basically, you know, junior maintenance guy.
Mm-hmm. So they like had a maintenance team, uh, at the club, a couple of people, and like for the summers they’d had a few kids.
Michael Mitchel: Mm-hmm.
Brad Feld: And I [00:44:00] was the lowest on the totem pole. Which meant that I got the worst stuff. Okay. And you know, the stuff I got were things like, Hey Brad, on court 24, there’s a gigantic wasps nest in the tree.
Go get the wasp nest out of the tree. Um, it was stuff like that. I lasted two weeks. I was very unhappy. Uh, I got treated poorly by whoever was my boss. I mean, I was just do the shit and, and I just quit. I said, I don’t wanna do this. I’m not doing this anymore. My parents to their credit, like sort of got it and they’re like, okay, whatever.
Then the next job I had, which was probably a year later, was the job that all my kids, uh, all my friends in high school, uh, had, and we had a big, a big shopping center and there’s a big food mall, food court thing and the different cliques in my junior high and high school. Probably high school by now.
Yeah. It must have been high school. Yeah. The, the different cliques got different. Restaurant. So like there was a clique that got the, the, the Greek [00:45:00] lunch place and there was a clique that got the pizza place and there’s a click. You know, the stoners got the corny dog place and the jocks got the, I don’t know, the Mexican place, I don’t know which ones were which.
Right. The nerds all got the potato restaurant, so it was a place called potatoes, et cetera. And what we had like 20 different or 18 different, I remember 18 different toppings ranging from number one to number 18, and like number one was like butter and like number two was butter, cheese, and chives. But by the time you get to number 18, it’s like a thing that is like this complicated thing that’s been cooking in a bowl for three hours that you pour on the potato.
And it was a, it was a like a fun job at some level and it was with, you know, all my friends and that sort of thing. The manager was a, a young woman in her early twenties who was not a college grad, was kind of a partier, would show up, you know, sort of hungover every day. Um, and she was pretty rough on us.
Mm-hmm. Like she was, she was not a. [00:46:00] Collaborative boss and she had like a assistant boss who was kind of the good cop, but she was really the bad cop. And she was, I think, not just mean, but kind of nasty.
Michael Mitchel: Hmm.
Brad Feld: And I remember she would do things that were just gratuitous. So I remember one, the, the process of prepping the potatoes is we got these boxes of Idaho spuds.
You carry, you’d go down the hall to this dark store room, you carry the box, 50 pound or whatever, box all the way down the hall. You dump it in this big industrial sink, and then you’d wash and scrub the potatoes, and then you put the potatoes on a rack, and then you’d put salad oil or salad dressing, salad oil on the potatoes, and then you put the potatoes in this convection oven.
Like that was one of the jobs. And that was, by the way, the worst of the jobs. Um, and for some reason I was assigned to that job more frequently than I felt was appropriate.
Michael Mitchel: Yeah.
Brad Feld: Um, but I sort of put up with it and one day I had just done like a top to bottom rack of potatoes, so I’d probably been doing it for two or three [00:47:00] hours.
And she comes in late and hungover and she looks at the rat and says, Brad, you did all these all wrong. And she just starts taking ’em and dumping ’em back in the seat. I didn’t do ’em all wrong. She’s just being mean to me. Um, and, and, uh, I looked at her, uh, uh, and I basically did something I shouldn’t have done as an employee.
And I called her, called her a name that was inappropriate
Michael Mitchel: mm-hmm.
Brad Feld: To call your boss. And, and she said, you’re fired. Why? You’re the one that’s being a jerk. And I think some of it was we were all smart kids. Yeah. And, you know, it was kind of some dynamic going on there that I was too young to understand.
And I said, you’re the one being mean. She’s like, you’re double fired. Get outta here. You’re double fired. I don’t ever wanna see you again. I’m like, okay. And I left and I kind of drove my bike home. I didn’t have a car then, and I had like a three hour, three mile bike ride home. And I cried a little on my bike ride home.
I mean, I, I just got fired. You know, the first one at least I quit. That’s what I got fired from. [00:48:00] And uh, you know, I told my parents what had happened and I told ’em what I said. What I’d done. And they said, you know, not exact words, but it, it, it was imprinted like, even if you don’t respect the person that you work for, there’s no excuse for not being, uh, respectful of them.
Michael Mitchel: Right.
Brad Feld: So, um, and that, that made an impression on me. It’s like, you know, I don’t have to, you, you don’t have to work for somebody you don’t respect. You can choose. But it’s not Okay. Yeah. In that kind of context, to not at least be respectful of the person. And I could have confronted her in a different way.
I could have waited a little while and sucked it up and just done the potatoes again. Or I could have, you know, sat down with her after I’d done the potatoes again. Said, you know, just so you know, that that didn’t feel good. She probably would’ve told me to go, you know,
Michael Mitchel: yeah,
Brad Feld: fuck off. But, you know, whatever.
Like, there’s so many different ways to deal with that kind of conflict. Um, that’s a huge learning
Michael Mitchel: moment, that takeaway. [00:49:00]
Brad Feld: I was, you know, I, I was 15, so it really landed, and I think ever since then, you know, I’ve had plenty of situations where I didn’t agree with someone. I have many, many situations where I was in conflict.
I’m sure there have been moments where I haven’t behaved well, and I’m sure there’s somebody that listens to this that says, yeah, Brad, I saw you in this thing. You were a complete jerk.
Michael Mitchel: We’re human,
Brad Feld: but, but I try not to, I’ve tried to internalize that. Yeah. You know, be respect. That’s
Michael Mitchel: really interesting.
That’s, yeah, and usually I get, you know, like, makes my story look lame or people talk about what they learned about people skills for, you know, being a waiter or a waitress or, but that’s really profound. Um, all right. Well, cool. Well, look, Brad, I really appreciate your time. Um, thanks for being a guest on, on CXO conversations.
Um, my pleasure. Yeah, for those who, um, who are listening to follow us on your favorite platform, give us five stars on, on Apple so other people can find us. Um, thanks for joining the podcast. Thanks, Brad. See [00:50:00] ya.
