This article is the second part of a two-part series where we explore the relationship between companies and fractional advisors. Part One shares advice from the advisor’s perspective, while Part Two shares the point of view from the CEO.
The choice to bring on a fractional advisor during the early phases of a company's growth has been on the rise in recent years. It's a smart way to give your company a boost, design a strategic plan, or tackle specific challenges without breaking the bank. Fractional advisors offer the perfect mix of flexibility and expertise, allowing you to ramp up when needed and scale back when things settle. In the first part of our series, "Tips for Getting the Most Out of Your Fractional Advisor," we spoke with Travis Bryant about building successful advisor relationships. But we know that an advisor-CEO partnership is a two-way street. In this second article, we turn to CEOs from Stage 2 Capital's portfolio companies. AJ Bruno, CEO and Co-Founder of QuotaPath, Alex Sambvani, CEO and Co-Founder of Slang and Skylar Talley, CEO and Co-Founder of Medscout, offer their perspectives on how to make the advisor/CEO relationship a positive one for your company.
Making the Choice to Hire a Fractional Advisor
As an investor in early-stage companies, I've seen firsthand how important it is for founders to identify their path forward and understand what's standing in their way. When I sit down with CEOs, we often start by discussing The company’s revenue goal and then pinpoint the GTM gaps that are keeping them from that vision. Sometimes these gaps are obvious - for instance, when a CEO with a product or engineering background needs to build out a demand generation motion and ramp up sales. But sometimes, figuring out if a fractional advisor is right for your company isn't so clear-cut. As a CEO, consider these questions to guide your decision: How important is industry-specific expertise to executing your plan, and does your team have that experience? What strategic gap are you aiming to fill? In the next six months, do you anticipate reaching a new stage of growth that your team may be ill-equipped to handle? Would your current GTM leaders benefit from a mentor that has relevant experience? Answering these questions can help you assess the need for a fractional advisor based on your company's current and future challenges.
What Kind of Advisor Does Your Company Need?
Many times when companies think about hiring a fractional advisor, they're thinking mainly about strategic guidance for a CEO to help set high-level strategy and direction. But this is a very limited view - advisors can support so much more and fill critical gaps across the organization.
For example, AJ Bruno has used advisors across the company, in addition to having a CEO coach. "At QuotaPath, we've put advisors in place across various functions. The Head of Sales and the Head of Customer Success have Go-To-Market advisors. My own CEO coach has been instrumental in helping me find capacity and become a better leader, so I wanted my Go-To-Market leaders to have the same growth opportunity. Building frameworks in the modern SaaS world is crucial, and having advisors who are two or three stages ahead is invaluable. Both advisors have biweekly conversations with the Heads of Sales and Customer Success, providing a great sounding board and operational insights. We also have a broad 'company' GTM advisor, bringing essential operator understanding and key metrics awareness,” states AJ.
Getting Specific About Your Fractional Advisor Needs
While the support you need is unique to your situation, key areas where advisors often make a significant impact can span go-to-market strategy, customer lifecycle management, and operational efficiency. Some of the most common areas we see advisors fill gaps are:
Customer Lifecycle Management:
Go-to-Market Guidance:
Operational Success:
Revenue Management:
Skylar Talley talked about the diverse ways they've benefited from advisors:
"The advisors we've brought in at Medscout have been incredibly helpful. They've really shaped how we approach our customer journey and helped us get smarter about keeping clients engaged. We've even managed to automate some key processes thanks to their input. They worked closely with our CS team to build a playbook and have helped our teams get a handle on our revenue tracking. They've kept us focused on what matters and improved our retention and expansion with their feedback.
How Industry-Specific Advisors Can Bridge Knowledge Gaps
When building your team, in most cases, I recommend prioritizing role expertise over industry-specific experience. For instance, in enterprise sales, it's often more valuable to hire reps who understand complex sales motions, champion identification, and deal progression rather than those with industry experience. However in some cases, an industry-expert advisor can efficiently bridge the knowledge gap, helping your team incorporate sector-specific insights into their sales or marketing strategies. And don’t forget about those rich networks that your advisor is also bringing to the table. Alex Sambvani, CEO of Slang emphasizes the additional benefits of industry-specific advisors: "Advisors also help navigate industry relationships and make valuable introductions. For instance, they connect us with key logos in our space and help increase our visibility within the industry through their network and association." I recommend prioritizing your needs to determine if industry experience is needed.
How to Structure the Fractional Advisor Partnership
In Part One of this series, we shared Travis Bryant's perspective on setting up a successful advisor/CEO relationship. He stressed the importance of digging into company specifics, coming prepared to discussions, and maintaining transparency. Our portfolio companies agreed with these points and added some practical tips:
AJ drives home the importance of structure: "Be consistent, have an agenda, ensure the CEO has a one-on-one with this advisor once a month, and measure the results over time!"
Speaking of Measurement - What Do You Measure When It Comes to a Fractional Advisor?
Measuring the impact of a fractional advisor can be tricky for a few reasons. Your advisor is invested in your long-term success, not just your sales numbers for the next quarter. When deciding how to measure success, make sure that the measurement is realistic. For example, you may want to see pipeline growth, which I would recommend measuring as X number of opps per month per rep. If it’s 5 opps per rep at the start of the engagement, you can’t expect that it will go to 10 within a month, so setting realistic goals is important. Here are three questions I advise CEOs to consider when judging the success of their fractional advisor:
Lastly, it’s a bit of a gut check - does this feel like the right partnership? AJ uses an NPS approach to quantify success.
"Measuring the success of an advisor relationship can be tricky since their impact often contributes to long-term success rather than immediate results," says AJ. "However, we've found that regularly checking in with our leadership team provides valuable insights. I like to use an informal 'NPS' from my leaders to gauge the advisor's effectiveness. Are they finding the advice actionable? Is it helping them solve real problems? While it's not a perfect metric, it gives us a sense of the advisor's value over time."