5 Must-Haves for a Solid Tech Startup Advisory Board

Starting a tech company is a bit like playing poker; you're making bets with limited certainty. Your advisory board can be a crucial asset to help navigate those uncertainties, but only if it’s structured correctly. Based on insights from serial entrepreneurs in the tech industry, here are five essential components for a solid advisory board.

1. Diversity of Perspectives

An advisory board should bring varied viewpoints to the table. Avoid creating an echo chamber—a situation where everyone shares the same opinions and reinforces each other’s beliefs without challenge. Instead, seek out people with different backgrounds, experiences, and expertise. A diverse board challenges assumptions and encourages open debate, leading to better decision-making.

Sometimes, board members prioritize getting along with others, which can hinder the inclusion of diverse perspectives. This tendency is related to groupthink, where the desire for harmony within a group leads to poor decisions because dissenting opinions are suppressed. A well-balanced board actively encourages differing viewpoints to prevent this from happening.

2. Focus on Accuracy

Ensure that your board members prioritize accurate information over simply approving management’s decisions. The board's primary role should be to help the company make the best possible choices, even if it means challenging the CEO or leadership team.

A board focused on accuracy is less likely to fall into motivated reasoning, a cognitive bias where people selectively accept information that supports their existing beliefs and ignore evidence that contradicts them. Similarly, it avoids self-serving bias, where individuals interpret situations in ways that benefit themselves rather than the company. By prioritizing factual accuracy over personal agendas, the board ensures sound decision-making.

3. Mutual Trust

A strong advisory board is built on a foundation of mutual trust between its members and the CEO. This trust fosters open communication and allows board members to challenge the status quo without fear of retribution.

Trust is essential to prevent confirmation bias, where individuals favor information that supports their pre-existing beliefs. When board members trust each other, they are more likely to listen to opposing viewpoints and reconsider their assumptions. Long-lasting relationships anchored in mutual trust create a rock-solid foundation for effective decision-making.

4. Adherence to the CUDO Norm

A well-functioning board should follow the CUDO norm, based on Robert K. Merton’s principles for scientific integrity:

Communalism: Open communication and information sharing are crucial. Hoarding information or secrecy goes against this principle.

Universalism: Information should be evaluated objectively, without rejecting a message simply because of who delivers it. This helps prevent messenger bias, where the credibility of information is judged based on the person presenting it rather than the content itself.

Disinterestedness: Board members should act in the company’s best interest, avoiding conflicts of interest or personal biases that could distort their judgment.

Organized Skepticism: All claims should be critically assessed and validated before being accepted. This counteracts confirmation bias and helps ensure that decisions are grounded in evidence rather than assumptions.

By adhering to these principles, an advisory board can maintain objectivity and make decisions based on the company’s best interests.

5. Members with "Skin in the Game"

Be wary of board members or executives who lack a vested interest in the company’s success. Hired CEO’s or board members who are well-compensated but do not hold equity in the business may prioritize maintaining their position over making tough but necessary decisions.

This scenario can lead to status quo bias, where people prefer things to remain the same rather than risk making changes, even when change is necessary. Board members with "skin in the game"—meaning they have a direct financial or professional stake in the company—are more likely to take decisive action that benefits the business in the long run.

Conclusion

A well-structured advisory board can be a powerful asset for a tech startup. However, it needs to be built on the right foundation: diversity of perspectives, a focus on accuracy, mutual trust, adherence to the CUDO norm, and members with a vested interest in success. By prioritizing these five must-haves, you can create an advisory board that helps navigate the uncertainties of the tech world and make informed, strategic decisions for the future of your company.

The Three Angles of Insight in This Blog:

Real-World Entrepreneurship – Lessons from Pete Gambitt’s experiences.

Proven Decision-Making Frameworks – Insights from Thinking in Bets by Annie Duke.

Poker-Inspired Strategy – Key lessons from No-Limit Texas Hold’em.