Each week, we seek out expert advice to help a small or medium-sized firm overcome a key issue.
As chief executive officer of the tech startup Jostle Corp., Brad Palmer needs some help. To be exact, he needs help finding help – as in expert advisers who can give his growing business an edge.
Mr. Palmer co-founded Jostle, whose product is a team-building, cloud-based intranet, in 2009. Today the Vancouver company has about 60 clients based in a dozen countries.
With a mature product in hand, Jostle recently began an aggressive push for business. By the end of this year, Mr. Palmer would like to have $1-million in annual recurring revenue for his online platform, which is called People Engagement.
The product, which bills clients a flat monthly rate plus a fee per user, includes a searchable employee photo wall. Each worker profile contains contact details and tags describing skills and interests. Clicking on the Relationship tab shows all formal and informal staff structures.
Jostle gives employees an extended sense of being part of a team and the connections they need to do their work, Mr. Palmer explains. "Traditional intranets have always really sucked at that for some pretty clear reasons," he says. "We're arriving in the right place at the right time with a fresh take that's really work-relevant."
So far, Jostle has raised $4.6-million without turning to institutional investors, such as venture capital firms. All of the 17-employee company's financial backers are private individuals, most of them senior business leaders, Mr. Palmer says. But this funding arrangement means that Jostle has never had the benefit of an institutional investor to help it find and secure advisers, he adds.
That's becoming a serious disadvantage now that the company is gearing up to tackle the enterprise market in a big way. Although Jostle has a five-member board, most of its directors play an oversight, rather than a business advisory, role.
Mr. Palmer needs specialized advisers in three key areas of so-called software as a service (SaaS): marketing, sales, and deployment and security. He also envisions adding one or two new board members with connections related to financing and exiting the business.
But identifying and landing such talent is no easy task for Jostle, which might have less difficulty if it were based in Toronto.
"The people who are world-class in these kinds of topics are highly sought after," notes Mr. Palmer, who says Jostle plans to compensate its advisers mainly through stock options and is willing to work with them remotely.
He adds, "How do you get those world-class advisers who are highly specialized, never mind where they are, and how do you attract them to your lowly little startup in Canada?"
THE CHALLENGE: How can Jostle find and attract the specialized and sought-after business advisers it needs?
THE EXPERTS WEIGH IN
Stephen Gardiner, managing director of management consulting, Accenture PLC, Toronto
Luckily for Jostle, the market's never been better for companies in Mr. Palmer's situation. In Canada in the major metropolitan areas, there are more and more senior, experienced executives and people connected to innovation incubators like DMZ [Ryerson University's Digital Media Zone], who are making themselves available.
It's worth Mr. Palmer and his leadership team sitting down and doing a true network analysis of whom they know and whom those people may know. The first step is to institutionalize networking as a core competency. One of the things they should look for in individuals joining their management team is the degree to which they are networked and are networkers.
Once they get beyond the networking aspect, the whole thing around Mr. Palmer being the visionary is critical. He should free up his personal time not only to drive his team through the networking but also to be out there in the marketplace, and to make sure he sets aside enough time in his day that that is an actual core responsibility, a key lever for success.
As you start to move toward attracting these individuals, there is an opportunity to get into a win-win situation by making sure that you're paying for outcomes and performance, not roles. In other words, make sure that they have clear objectives and that they are paid quite handsomely for the advice they are bringing, and the outcomes they are helping the company to drive.
Elizabeth Watson, founder, Watson Advisors Inc., Vancouver
Seasoned executives and directors are interested in these kinds of opportunities because they like the idea of being closer to the ground. Today, so much is expected of directors of public companies. What turns their cranks, particularly if they're entrepreneurial in nature, is that they are still very engaged and excited about building businesses.
People are more open to phone calls and conversations than you know. The kind of people you probably want are motivated to help. And so it's a matter of understanding whom you want, understanding who their networks are and how you might have connections to that person. Or being bold: making a call, going to the same kinds of events where they're going to be. You've got to put in that time and effort.
Even within Vancouver, there are people who are here or come here on a regular basis. Obviously, you do your networking farther afield, but there are a lot of people around here who are connected globally.
In theory, I can give you the same advice over the phone as in person. But the interaction, the commitment, the engagement is hard to maintain if you never see each other. We find that the best interactions are face-to-face, so you will want to have the opportunity to get together at least once or twice a year.
Scott Larson, CEO, UrtheCast Corp., developer and operator of high-definition video feeds of Earth for broadcast from the International Space Station, Vancouver
No one is going to decide to come to the board because of the compensation that Jostle is offering them. A small compensation package is fairly standard, but that won't be the deciding factor. The project needs to be exciting; they need to network with people. Once you have two or three board members who are well recognized and have good networks, push them to go find other members.
Having a board is fundamentally expensive. You've got meetings and calls that take up a fair amount of resources and time. And so if you get too international in your search, it adds to the cost. If you're going to expand into the U.S., then perhaps [add] one or two Americans, but much farther than that it becomes cumbersome to have board meetings. Being able to educate and get bona fide value out of the board becomes more difficult. Lots of startup companies have added a bunch of advisers, but the advice they're getting is nominal or non-existent.
I would not recommend hiring a consultant to fill out the board. The CEO wants to be able to maintain a direct relationship with the board and put together a board that they'll be able to work with.
THREE THINGS THE COMPANY CAN DO NOW
Perform a network analysis
Take an inventory of your management team's connections and make networking a core skill for everyone.
Rather than wait for an introduction, call potential advisers or arrange to meet them in person.
Pay for performance, not position
Offer advisers generous compensation for achieving clear goals.
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Interviews have been edited and condensed.