Tuesday, July 17, 2007


Software Vendors and Advisory Board Mistakes

Ever noticed how many software vendors pursue CIOs of Fortune enterprises to serve on their advisory board yet somehow are always disappointed when they turn out to be about as effective as Madame Tussaud Wax Dummies...

For vendors that repeatedly get it twisted, the vast majority of IT executives aren't close enough to the technology to add value to your advisory board. Likewise, many of them don't have deep networks to help you penetrate other enterprises as they spend most of their day interacting with the business. If you haven't figured it out, the notion of inviting enterprise architects to serve, might be a better investment.

Software vendors often seek advice from industry analysts who are pricey. Nowadays, software vendors need cheaper advice that eschews the notion of you get what you pay for. Instead, consider compensation in the form of stock participation. Industry analysts tend to avoid this form as they have no desire to have skin in the game but enterprise architects might. Consider an offer of 0.25% ownership in a startup vested over three years in exchange for five hours a month. This will result in a 10x return over both IT executives and industry analysts.

For the record, I no longer personally serve on advisory boards, but my significant other does...

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