Javier Soltero
How to Fix a Broken Board

Javier Soltero joined Redpoint Ventures as Entrepreneur in Residence in 2013, and is currently working on his new start-up Acompli. Prior to Redpoint, Javier was the CTO of SaaS & Application Services at VMware. He has 15+ years of experience designing and developing infrastructure management technologies.

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So, we needed a catchy title and we chose this one just to see if we could lure enough people down here to make this talk worthwhile.

Knowing a little bit about the size of companies that are at Heavybit, and the folks that I have interacted with in office hours and stuff like that, I'm pretty sure that most of you wouldn't qualify your boards, if you even have any, as broken. It's more about making sure thatyou don't get to a place where your board is broken or a governance processfor your company that is not helping out. Which is part of what this talk is designed to do.

As Tom mentioned, I was the CEO of a companycalled Hyperic. The reason why that is relevantis because it was through the journeyat Hyperic that I learned pretty much everything I knowabout corporate governance and boards.Specifically, I was tasked with running a board meetingbefore I had ever attended one.I suspect that that may be the case for a lot of youas you move from probably a more informal relationshipwith your seed stage investorsinto a formal relationship with professional investors, VCs and the like.

So, let's get right to it.

How many of you have boards?Okay, you guys — Meteor guys, right? Okay.Anyone else? Jessie has one.Jessie is familiar with it.Okay, excellent!

What is the purpose of a board meeting?And this is actually not meantto be a rhetorical question.I'm genuinely curious to see,and have you guys throw out one word answers for this.I'll give you the first one:I thought it was governance.

For an early stage company,what is the purpose for a board meeting?Jessie?

To give VCs updates on the deck.

No. Good try.I did ask for a one-word answer.

Reporting.

Not an answer. Anyone else?

Hiring.

Okay. Not either. Good try though.

Sales leads.

Sales leads, hiring — all of these answers are all wrong.All great ideas. All very well-intentioned ideas.Actually, I wonderif anybody has actually attended a board meetingin a room like that. That room reminds me of Tron, the 1982 version of Tron, a very sort of 80s take on what acorporate board room actually looks like.Most of my board meetings latelytake place in that board room right there,or in one upstairs if we don't annoythe third floor people too much.

The key purpose of a board meetingfor an early stage companyis something that's really important to understand.It's not the usual things.This isn't a reporting thing. There are elements of reporting, yes.It's not about governance even thoughthere is a little bit of governance involved.It's not about firing the CEO,although again, that is also a part of what the boardis enabled to do and one of their heavierand arguably more clumsier weapons.

We're going to explore this. I'm going to try to tell you all,from my own experience,how this played out for me, specifically, at Hyperic. How this has changedfrom those days into what I'm doing now. And how I'm running the board processfor my new company Acompli.

The real purpose of a board meetingfor an early stage companyis —and I'm a very, very big fan of this kind ofairplane analogy:

When you're building a small company,a technology company in particular,your first job is to assemble the planeand then take off.Then, the next job is to keep the thing flying basically.

Often, the state of that airplane is shoddy at best. In case you're curious, this is Mr. Cessna.I believe it is this fellow right here,and his team of "founders,"as we would call them today, or "other crazy people"as they would have called them in 1922,or whenever this picture was actually taken.

The idea is early stage board meetingis what's going to help you turn this. . . into that.So that, for those of you who are not aviation geeks,is a 787 Dreamliner made by good old Boeing.

This is what we aspire to.This is why we're here at Heavybit. This is why we're at startups.We are here to start with a very shitty airplanethat we barely can fly,whose engine is prone to breaking down,and with a team of not even mechanicsjust very, very eager people,to take flight, and then get to this. To get to a very shiny plane with high speed,long range, comfortable seating, etcetera.

I personally believe that the board process,if you will, is a key instrument in getting you here.What I mean by that is that it wasn't untilI actually had the accountability of a Board of Directorsstaffed by professional investors,in my particular case at Hyperic,with folks from Excel and Benchmark — two excellent VC firms,as well as some outside directors,that I was thinking in 787 Dreamliner terms.

Before we actually raised money from VCs,we spent two years bootstrapping the companyand during that time it was pretty much about survival.There was, by the way, no seed funding,no Heavybit.There were none of the things that we now havethat can help companies navigatethe very difficult, early processof idea to go-to-market to scale, etcetera.Those were not available.

We jumped right in from this sort of,"let's try to keep this plane flying" — and it was me and 4 other co-founders —into "oh my god, we have professional investorsand that is awesome."

The first disconnect for mewas these two investors, in particular, on my board, were always thinking in terms of 787 Dreamliners. When we came in, and this is a true story, and walked into the first or the second board meeting — it was probably the second one. Because the first board meeting,frankly, after an investment is made,for those of you who haven't gone through this yet,there's a lot of high-fiving and huggingand "Yeah! Let's go to dinner!" And all that kind of fun stuff.

It's after that first hug-it-out meeting that youget to the what-have-you-done-for-me-lately phase. You will likely stay in that phasefor quite some time, if you're lucky,or you'll get fired.

Very early on with my two investors,we walk into this board meeting.We had set a financial plan for the company.We were already profitable. We had been doing somewhere in the vicinityof a million, a million two, in revenues. We were a healthy company, something that today I'd be killing for.I walk in victorious.It was quarter end and we're like,"Yes, great board meeting!"

I thought, okay,time to give them the report.Here's the plan.We said we were going to do, and I actually remember exactly what the number was —$325,000 was the bookings targetfor that particular quarter.This is in late 2006, Q3. I'm like, "Well, board members, welcome.I'm happy to report that we didn't do $325,000, we actually did $362,000! And so I'll pause right now so that you can allkiss my ass collectivelyand applaud our joyousoverachievement of our number."

The silence was pretty painful.In fact, what I had done there,because again, my board members were looking for this,was I had taunted the beast.I had bragged about achieving a numberthat personally, as a crew of people who had beenbootstrapping a company for two-and-a-half years and saw the first $750 check that came in to Hyperic. I celebrated that and literallyit was like "10 bucks for you, 10 bucks for you,10 bucks for you, 50 for the kitty," that kind of thing.

To go in there and get basically punched in the guton account of having overachieved a numberand have my investor,and I will for the purposes of this part,not name names, but assume it was one of the twoinvestors in my company,say, "What was our number last year?How much money did we do last year?"Whatever he said, which I remember,but I won't bore you with it,basically trivialized the achievementthe company had made the year before.

The year before there was no venture investmentand literally we had taken this company,for those of you who don't know the story,from the Sequoia Capital trash heap, quite literally.This was a company that Sequoia had investedupwards of $32 million into,and we salvaged this product. Five engineershad bootstrapped it for two yearsand brought it from zeroto over a million dollars in bookings.Through all kinds of unnatural and painful acts,most of which involved me on the phonecalling every single lead and saying,"Hi, I'm Javier. How are you?And so you downloaded our product.What did you think?" and all that.

To hear somebody not only not reactto our overachievement, but also go the extra stepand suggest that what we had done up until that pointwas crap was really too much for my Puerto Rican-nessto be able to hear at the time.

So what did I do?My reaction was the wrong the reaction. I literally said, "You know what, dude?We did a million two before a single dollarfrom your firm showed up at this company,so you better think long and hard before you comeand trivialize any work that we have done here."And while that in the moment felt right. I'm like, "That's right, dude!"It was not the right moveand I will walk you through why that is today.

So in an effort to spare any of you who would be trappedinto thinking that the board meeting is an opportunityfor golf claps and pats on the backand attaboys and whatever else,no, no, no.It is about getting to this.

Audience: What was the one word answer?

What was the one word answer, sorry, to what?

Audience: You said what is the purpose of a board meeting?

The one word answer is inspiration.You have to know,and this is why we're here by the way, if you're building a company the traditional way — with sort of no outside capital, you go get a bank loan,you have investors that are not holding you accountableto deliver some kind of unreasonably large outcome — the rules are very different and much more practical.The goal is to stay in the gameand grow the company.

If you're going down the Sand Hill Roadand getting money from anybodywhose address is on that street,or anywhere in that vicinity, they're looking for this.So why is that relevant to the story I just told you?Because while I was inspired, I had this ideaof getting somebody to hold me accountableto higher achievement and higher results. And the reality was, I was like, "Okay, we have a plan. We set a financial planthat the board approved." As we start executing on it, at the time meeting those objectives,it was really surprising/annoying that in achieving that,I wasn't getting anything other than more questions.

It's about harnessing that inspirationto achieve something bigger, something that I was actually having trouble visualizing,that we wound up at the right answer.

We'llcome back to that because that's a very good question.

While we're at that,let me give you a quick peekinto the mind of a Venture Capitalist: Slices. Delicious pepperoni slices.They think of things in terms of slices.Your company, which by the waythey refer to internally as a project, another example of somethingI found highly objectionable.To them, it's something they allocate a specificamount of time every week or every day.They allocate a specific amount of timeto think about Hyperic or Acompli or Meteoror OnBeep, or any of thedifferent companies that are in here.

It's up to you to figure out,assuming you're in that position as the CEOor as part of the management team,to direct where that time is spent.If you don't, well then all bets are off.

That's when you get the wandering mind of thehyperactive venture capitalist that's going to beemailing you at 2 AM at night,asking you random questions about different thingsthey think you should be doingor people they think you should hire.Or, and this is a very special onethat they enjoy tremendously,people they think you should fire.

So why is this important?Well it's important because the board process,not just the board meeting but the board process,your relationship, your ongoing interactionwith the investor is your way of directing theirtime and their attention towards an outcomethat will help the company.An outcome that serves that idea of you tryingto achieve the 787 Dreamliner outcome. Not the "Hey, local band does okay" kind of outcomewhich is not what we want.

There are various strategies on how to achieve this, notthe least of which is not to wait until the board meetingto start setting expectations and communicatingwith your board and specifically your institutional investors on what they should behelping you with and how they should be thinkingabout your company.

More story time.I will require a drink for this.What does a bad board meeting look like?In an effort to spare all of youthe very unpleasant experience. Actually, before I tell my story,has anybody had a bad board meeting here?Jessie raises his hand quietly. Anyone else?All hugs and kisses so far?Okay, great.Well, luckily, we don't have board meetings everyday,although I have one on Thursday so I'm going to putall this shit into practice here pretty soon.

A bad board meeting starts withwhat I just described a minute ago. It starts with egos getting brought into the tableand clashes over arguably petty things that areinconsequential and in the moment serveonly to create conflict and discord and frictionbetween the entrepreneur, the board,the executive team and the investors.

To put this in more concrete terms,that specific story I told where an investorwith an arguably rougher hand than he should have,gave me the tough love that was necessaryand was very much a part of me growing upas a first time CEO. That meeting ended very poorly.The whole rest of the meeting was shit.It was basically a series of frustrating remarksabout me trying to reassert our level of achievementand our trajectory; and the venture investornow going out of his way to remind methat I had not delivered shit to him yet.Actually, that is true.

The reality was that we were still a tiny company,and for a guy who at the time was actively involvedas the first investor in Facebook and a range of othervery, very successful companies, to go and look at our quarterly numberof 300-and-whatever and says, "Pffff."The really bizarre fact by the way,is in that particular case, I don't know thatFacebook was even making money at the time.It's not even really about money as much as it iswhat are the goals and how are you goingabove and beyond to achieve them. A bad board meetingis something that should be avoided.

I had another bad board meeting during the courseof the 2008 crisis.A meeting where basically,because of the very, very unusual and critical situationthat was taking place across the globe,most investors essentially brought every singleone of their portfolio companies in, to basicallyre-establish their right to continue to exist.

Look, it's just part of life.It was not a pleasant process,but it is part of going through this.And in that process, there was a series ofmistakes that I made.

I let my personal ego and passion and sort ofemotional entanglement with the companyget in the way of managing a process that is designed,in the best case, to help you navigateuncharted waters and difficult situations.

Now the good news is I look back on every single oneof the bad board meetings that I had, of which there are thankfully not many,and know that I learned somethingvery, very concrete, which I will share with youas part of this presentation.

More importantly, I can also happily say that I canlook back on every one of the ass kickings that I gotfrom both my venture investors,as well as my outside directors,as well as the support that they gave me,even during times where there was a lot of very, verystrange shit going on in the world,as a big reason why I chose to do it again.

There is actually a silver lining to all of this. The reason behind this talk is not to scareanybody here, but more to help you all potentially avoidmaking some of the mistakes that I madeas a first time entrepreneur. Particularly, as one who had gone through anunusual journey in the course of actually gettingto raising venture money and insteadget to this place where you are at oddswith what your investors want you to deliver.

So, what does a good board meeting actually look like?

Well, a good board meeting is one wherehard questions are asked,not every question is answered,but where whatever the dialogue that takes placebetween the executive team and the board,leads the company to, at a minimum,uncover something very significant that remainsunanswered, that will unlock additional growthor potential in the company.

That's all very unspecific, but I'll tell you someconcrete examples when I get to the tipson how to actually run these meetings.The reality is a good board meeting is whenyou actually are able to ride the wave ofinvestor expectations, outside pressures,internal management team turmoil,all the different things that all convergeon this blessed occasion that happens, in most cases,every 6 to 8 weeks depending on where you arein your company's process,and you manage to not only have a great discussion,but everybody feels satisfied.

It's not because you went in there and tickedall the boxes and said, "Okay, well so the number wasa million two and so we beat that. Great. We needed to hire a new VP of marketing. Got that. Great."It's not a checklist item.In fact, it's actually very the opposite of that.Those things are important, but you've got to getthat shit done, not because you need to pleasethe board but becausethat's what keeps you in business.

A good board meeting is one whereyou actually raised, or you came preparedto the meeting to talk about some material questionor issue that the company is facingthat stands between where you are todayand achieving that sort of giant,awesome outcome or building that amazing company;and that the board feels satisfied that not only did youcome prepared to address that topic,but that they participated in this process.This goes back to the pizza slice in the slide that I had 2 minutes ago.

Investors, professional investors,look at every investment they make as a project.One of the most useful things that I've learnedin the experience I've had in raising moneyfrom very talented investorsis for me Hyperic was like a company, something that was a huge part of me; I was all emotionally intertwined in the thingand my co-founders were as well,and it was like a very, very complicated thing. But, to my investors, it was a project.

The first time I heard them say thatI was like, "How dare you refer to my thing,our thing, as a project!That sounds so trivial like as if you have others."They have others.If they're good anyway, they have others.

In fact, when I really understoodthis whole idea of a projectit was: They want to help.The big lesson in terms of interactingand being able to raise capital successfullyfrom professional investorsis to enlist their help in a journey, in a project, and having work for them to do. Not because you're going to be handing them tasks,but because they want to get in this car with you. To go and figure out all the shit that you don't knowat the A round, you won't know it at the B round. You may know it laterwhen you're raising growth capital, that's a whole other ball game.

In an early stage company,the appeal to an investor is this ideathat not every question is answeredand that they might be able to not only contribute,but frankly be present at the time that those questionsget answered. If you do things right,it is the board process and those kinds of interactions where they help raise your barand raise your game.

To basically help get youto that place when you say, "You know what, I'm betterbecause I had the chance to work with two fuckingawesome guys, who very early on, checked my egoat the door."

They said, "You haven't done shit, dude.Great, you bootstrapped a companyand you brought it to a great stage in revenueand you rescued this out of Sequoia's trash heap.Golf clap. That's what our series A money was for. From here on out, the clock gets reset."And the clock frankly, for those of you who are alreadyon the revenue treadmill, gets reset every 90 days.It's basically what-have-you-done-for-me-lately, for good or for bad.

In any case, having a good board meetingis a situation where all of those thingskind of fit together.Where, yes, you're reporting the right news,you're raising all the potential bad news elementsthat may need to be raisedand talk through them. But it's one where there is true collaboration taking placebetween all the members of the board. It's not just the management team filing in there,going through their respective pieces and sayingthis is what we have to say, thanks a lot, that was great.

If you're having those kinds of board meetings,you're not getting the most out of your investorsand likely, in my opinion,you're probably doing it wrong.

Now, let's get specific. Here's the partthat some people may find somewhat objectionable.The first tip, and because I'm an engineer,or at least I fancy myself one,I like starting lists at zero,just to annoy the shit out of people.

No board packets. . .Ooooh, no board packets!

I thought, when I first started Hyperic and we had our first set of board meetings, there's a packet, there's a deck that you have to prepare,there's a whole set of things.You've got to send shit in advance, there's a mountain of paperwork,stuff that you've got to send.No. You know why not?Because chances are they won't read it.If they do read it,then why are they coming to the meeting?

If you send the deckand you go through the trouble of preparing a slide deck that doesn't require you and the restof your management team to be presentso that you can walk them through the contentand have a discussion,then all you're doing is providing thema reporting framework and you might as wellnot even have the meeting.Just send them the shit and tell themif they have any questions, they should email you.

That, in my experience, was a recipe for disasterbecause A, it consumed a tremendous amount of cyclesfrom the management team in advance of the meeting, and B, if anything, it led to investors coming —I'm using investors anddirectors here interchangeably so, please forgive me; this is not a universal truth of investors,it's more of a director thing — they arrive at the meeting with the gun cockedand ready to go because they're trained by necessity and by the natureof their job to find the pony.

What is Javier not telling me here?What is in this slide?What is in this particular PNL statementthat is the thing that he doesn't want to talk about?What's broken here?There must be something broken here. If you go through the trouble of putting togetherthis beautiful board packet that says, "No man,everything is awesome. Everything is going great."

They're going to be double-motivated to go findsome stick to beat you over the head with.And believe me, if you're working with good people,they're going to be smart and they'll find it.

Very early on,I realized that whatever this packet bullshitthat I was supposed to do in the 'grand owners' manual'of the venture-backed startup, wasn't working.In fact, it was out of a bad board meeting,that first one that I mentioned wherethis particular investor took me to task over how muchmoney we had achieved,that in an effort to diffuse what was turning into avery, very toxic board environment,one of my other investors, a good friend of mine andone of the best investors in the Valley,suggested a different approach.

He said, "Javier, you don't understand.We're coming into that meeting and it's likeeverything's already been figured out andwe're just sitting there and you're reporting shit to us. It's boring and it's not making us feel like we're taking part in the discussion."

What you should do is for every board meeting,have a question or some big issue in mindthat is going to be the central topicof that board meeting and have that issue be somethingthat is not an immediate issue.You don't have the topicbe the VP of marketing search.No that's shit you've got to do.

The topic is something bigger,something that is a few steps ahead of from where youare today that is going to help you asa management team be more disciplined,to anticipate the things that you're going to have to doas you grow from being a shitty airplane that canbarely fly into truly being something that's worth riding in for a transatlantic flight.

The way to do that is to start by, for every meeting, you identify 1 maybe 2 things,2 major topics that are going to be the basisof discussion for the majority of the board meeting.Yes, there will be reporting and yes,we found the VP of marketingor we fired the head of sales or whatever. But this particular strategic and substantial topicshould be something that the executive team,and the entire company,is prepared to present an opinion on or a plan onas part of the board meeting.

That second part is crucial.You don't go figure shit out in the board meeting.No, you go there with a big questionor some material issue and then a way to solve itand a way then to enlist the boardto provide feedback and either validate orshoot holes. You have the discussion.Maybe they think the idea is crap.That's fine.

The goal is, you've got to center all the energyand all the attention and all the discussionaround something that's going to be meaningful.

It isn't going to be about mincing little tinydetails of your financial planor different aspects of how you're running your org,or whether or not when you send email it does or doesn't do the right thing.

In addition to having that question,what I chose to do was, I don't want to senda packet that you're not going to read.There are rare occasions where there are documentsthat require a concerted effort. You don't want to be sitting there reading stuff.You send 7 to 10 days prior to the board meetingthis topic and an agenda that says "we will coverda-da-da reporting things, but the major topicof the board meeting is going to be the issue."

We're about to launch our company,so our goal is to discuss not the mechanicsof the launch, but specificallythe nature of our user acquisition process.Why? Because my goal for this board meetingthat I have on Thursdayis to have the investors and the board leave that meetingcomfortable with the idea that we know the natureof how people are going to arrive at our doorstep,make their way through our website and the app storeand all the other bullshit that's involvedin getting people to download an app and then be at the other end delighted with the productthat we have given them.

I want to have a discussion around thatbecause there's a lot of different elementsto that that are very, very important.

So what did I do?A few days ago, last week, I sent an email saying "Hey, this is the major topic.We will also cover product progress, etcetera. But what we really want to discuss is this.If there are any questions or any comments,or if you feel like we should be discussingsomething else, let me know.What comes back?Immediately, "Sounds great.That is a great agenda and by the way,are we going to cover this aspect of thatuser acquisition process? Are we going to discussviral features in the product and see them in action?"Yes. This is now a little bit better.

On the day of the board meeting,going back to board packets,I don't print anything.I print the board minutesand I print actually one copybecause they don't take it with them.Why don't I print anything?Because I want them looking at meand my management teamand the deck that we're presenting.I don't want them leafing through shitwhile we're trying to have a discussion.

If you hand somebody a stack of agenda printed slides, doyou know what they're going to do?I saw this a dozen times,(page flipping sound).Find the pony.I'm going to find the slide that has the bad news,I'm going to start asking you questionsand start struggling to take you off the agenda.

The best investors and the best directorsthat I ever had the privilege of working with,they all do this.

What's the answer?

"Welcome to the board meeting.Glad to have you here. Do you guys need coffee? We make great coffee down here at Heavybit.Have some coffee.Do you want some Vitamin water or whatever this is? It's delicious.Now let's sit down and let's have this discussion."That's the first one.

Always wear a jacket.Or, for women CEOsand women who are running board meetings,dress in a way that is differentfrom the way that you dresswhen you normally come to work.Why? Javier, that is really, really, really trite and stupid.No, it's not.

When I attend a board meeting for Acompli,just as it was true when I attended the board meetingfor Hyperic, and other board meetingsthat I've been a part of, I am not Javier in the trenches,CEO. I am Javier the director of this company and also the CEOand I need to have some silly wayof forcing myself for that day aloneto be in a different place mentally.

And the simple fact of forcing myself to wear a jacket — you can rock the business mullet if you want.Business mullet, for those of you who don't know,is the jacket and the jeans.That's the party up top or party down belowand business up top thing.I didn't come up with that term,somebody else did, but I like it.

You have to do something that's going to take youinto a different mode and that's going to make yoube present at that meeting in a different capacitythan you would if you're simply there like, "Hey another day at Heavybit."No, I have a board meeting.That meeting, to me, is very important.

For those of you who will be here Thursday,I'll be wearing a jacket.

By the way,no one, not a single board member in my current company, in the past there were some, but of my investors — one of them wore shorts.He gets to wear shorts becausehe wrote me a big fat check.He can wear whatever the fuck he wants to wear.It's basically the honest truth. Me, I wear a jacket.Why? Because I'm running the meetingand I have to be in a certain place.

We came to a place in the days of Hyperic wherethere was such a thing about me wearing,at the time, a suit. Because it was a bigger company,it was a bigger deal. The board would play this gameabout whether I wore a tie or notto determine whether we had missed a number. I'm like you guys can keep guessing,whatever amusement you get from the silly fact of me wearing a jacket,I'm still wearing it and that's just part of what this is. So, it's important to me,I find that it would helpful for all of you.

No meetings on Friday.Why?Well, because in the eventthat you have a shitty board meeting,you're going to simmer on that for a whole weekend.

You and your executive teamand arguably your directors and your investorsare going to leave that meeting in a state of discontentand concern over your company. I guarantee you, and I speak from experience,that will be the shittiest weekend of your life.

Has that ever happened to anybody?Anybody had board meetings on Fridays?Other than Jessie.You're my boy, Blue.

Why not on Fridays?Because if there is a followup,if there is anything that needs to be discussedas a result of that meeting,it needs to be discussed either immediately afterthe meeting or the day after and no later.You, as the CEO, or as a member of the executive teamor anybody involved in this process,do not have the luxury of letting board-level issuessimmer over the course of anything more than 24 hours.

Why? Because, A, time slice mentalitywill get the best of youand then the investor is going to move away from thatand then come back to it with a very differentperspective and likely one that willnot be to your advantage. And 2, because it's going to suck for you.I did this twice and I regretted both timesand never again.

Do not meet at Quadrus,if your investor is at Quadrus, or at 3000or at whichever one of those buildings they're at.You meet at the company.Why? Because you want your investorsand your directors to **walk **the company,to see the faces of the employees that areworking their asses offto make their investment worthwhile.

It is an incredibly grounding thing for a directorwho's coming in to have a difficult discussionwith a board, potentially about having to do a RIF,a reduction in staffing,or to fire the CEOor to make any kind of difficult decision.It keeps everybody grounded on the ideathat the company isn't just this project of whichyou only interact with only very select people ona very rare occasion.No, it has a logo, it has a bunch of peoplewho work there,whose families are hoping that the thing turns out well.There are people involved.

It is very, very importantthat every one of those meetings take place on your turf.Under no circumstances,and I mean no circumstances,are there to be any board meetings that do nottake place in your offices.

Jessie, have you done any board meetingsoutside your offices?Yes. Anybody else? Meteor guys, do you always meet at your offices?Yes. So, very, very importantto keep things local to the company.

The last slide before we do a little open Q & A. I'm happyto elaborate on any of the stories.

There isn't a recipe.One of my biggest mistakes early onwhen I was a first time entrepreneur and CEOwas presuming that there was an owners' manual.

The engineer in me thought that there wasfor all these routine or otherwisegovernance-related tasks of running a company,a right way of doing things.That, "Oh yeah, my attorney said that I have to preparea board packet and he gave me some samplesof what the structure and the template of a board deck is. So I've got to fill this shit out and I've got to send it." Or any number of other examples of situations where "there's a way to do this. "The reality is there isn't.

There are generally accepted thingsthat you have to do because it is your fiduciary obligation as the executive of a companyand as the board memberthat some of you may be.But in reality, the process that you should be followingis the one that works for your company. It's very important, so I've given you heresome tips on how I approach it.

You don't just show upat your next meeting and say,"By the way, you guys, no more board packets,"and blah, blah, blahand you implement some sweeping changein a process without getting buy in.You have to not sell this,but basically get everybody on boardand explain why you'd like to follow a different process.

The Jedi mind trick, if you will, in all of this,is to think from their perspective.This is a project. It's not even necessarilya company depending on how early you are in this.

So in order for the project and their participationto be enjoyable, productive, useful and worth doing,you are proposing a change to the processyou've been following whereby you're no longertying up your management team for two weeksto try to put up a board deck. Instead you would rather have themanagement team tied up trying to come upwith a plan of attack and some kind of answerto some material question that's going to bethe central topic of the board meeting.

A subtle** difference**, but a very, very material onerelative to how the board meetings will goafter you change from:

"Let me go and drown you in reportsand other sort of mundane items"

To, instead

"Let's get into the sausage making ofbuilding out this business and enlist your help. You're a product person or you're an operationsperson, let's have you bring the bestof what you have to offer,because frankly, if it's about poking holes inspreadsheets and shitty slides,there's ample lists of people that we can enlist for that."

With that, thank you.I hope this is helpful to any of you.I actually wrote a blog post on thisthat is in essence this same story,but with less pictures,which I'm happy to send. Now I'd love to take questions on the record,off the record. I think this is all good, so, please. Thank you.