Keeping Founders Intellectually Honest


Richard Schneider

“A great board member is one who focuses on the 100,000 ft level. Asks tough questions to keep management intellectually honest.” – Andy Rachleff, Executive Chairman of Wealthfront (on The 20 Minute VC)

I resonate highly with Andy’s statement. Keeping the founders intellectually honest is one of the most important roles as an investor or a board member of a company. Four aspects I focus on when challenging the founders’ thoughts are:

Metrics: With the current metrics, can a sustainable business be built? Is it realistic to assume that the metrics will remain the same at scale? Will the money in the bank last us long enough to reach our milestone?

Competition: Are we differentiated enough from our competitors? Will customers pick our solution over the competition? Does our current roadmap keep us ahead of our competitors?

People: Are the people in the company well managed? Are we hiring the right people for the right role?

Market: Is the addressable market as big as we are assuming? Has there been a shift in the market that requires us to redefine our addressable market?

I will never know more about a company than the people who are running it. I trust and believe the founders and their decisions. However, it is also dangerous to assume that they see everything and that they have thought everything through. It is important that we challenge their thoughts to make sure they remain intellectual honest.

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