“Being a CEO can make you a better board member,” according to Andy Rachleff, co-founder of the storied venture capital firm Benchmark Capital and the financial services startup, Wealthfront.
But there are other qualities that Rachleff said will define the success of a director. A good director combines vision, intellectual honesty, and humility to help guide a startup through every stage of its development.
A good board member is able to be present at a “100,000 foot view”, according to Rachleff. “The most successful businesses are those that are able to continue to reinvent themselves.” And board members need to help provide that visionary approach, guiding the CEO in the next transition of their business.
“Product market fit is the biggest challenge” identified by Rachleff in our discussion. This is a common challenge for many founders and chief executives.
Rachleff asserts that “product market fit is when you achieve exponential organic growth.” However, many founders wrongly identify, either by mistake or out of sheer hope, if they have achieved product market fit or not.
It is the job of the board ‘to hold the mirror up to management to assess their intellectual honesty on product market fit’, recalled Rachleff.
Lessons of Success
Refuting the old adage that failure aids learning, Rachleff states, ‘”we learn more from success than from failure.”
So, a successful board member is generally one that has achieved operationally and “knows the lessons of success.”
Rachleff also stated the importance of humility with success, “a board member should be aware, the entrepreneur knows more than them.”
How is this reflected in Rachleff’s own behaviour, as a board member? “I talk a lot less,” he said.
Ultimately, the recipe for a successful board can be broken down into two simple elements. A board member who tries to tell management what to do seldom succeeds. A board member asking questions to ensure management is intellectually honest is a valuable board member.