Building Your Board with Redfin CEO Glenn Kelman | The Scaleup Offsite 2017 | Summary and Q&A

TL;DR

Glenn discusses the importance of having a strong and supportive board and shares insights on how to recruit, engage, and effectively work with board members.

Key Insights

• 🗯️ Choosing the right board members is crucial, and founders should prioritize finding individuals who are passionate about their mission.
• 💄 Diversity in the boardroom can bring various perspectives and enrich the decision-making process.
• 🏂 CEOs should take responsibility for the success of the company and actively seek help and guidance from their board members.
• 🤗 Open and transparent communication between CEOs and the board is essential for building a strong partnership.
• 😒 CEOs should properly manage board meetings and use documents to encourage thoughtful discussions and decision-making.
• 🏂 It is important to provide feedback to board members and clearly communicate expectations for board meetings.
• 🫵 CEOs should overcome their resistance towards the board and view them as a valuable resource for support and advice.

Transcript

I'm Glenn and I'm here to talk about building the board I was surprised that James slavit the Greylock partner asked me to discuss this topic because I've actually had sort of a fraught relationship with our board and in fact I really didn't have much experience about what a board should be like just because my only experience had been watching mov... Read More

Questions & Answers

Q: How should founders evaluate potential board members during the fundraising process?

Founders should spend time getting to know potential board members, evaluating not just their firm's brand but also the quality of the partner and their personal connection. Look for partners who are genuinely passionate about your mission and are willing to spend time understanding your business.

Q: How can boards be helpful to CEOs?

Boards can provide valuable advice, access to their network, and help CEOs solve problems. They can act as a sounding board and provide a different perspective. CEOs should seek help from board members and be open and transparent about their challenges and issues.

Q: How should CEOs handle difficult board members?

CEOs should remember that they are still in charge and responsible for the success of the company. If the board is causing difficulties, CEOs should strive to maintain control and make decisions that align with their vision. Transparency and open communication with the board can help resolve conflicts.

Q: How can CEOs effectively manage board meetings?

CEOs should focus on presenting the truth about what is happening in the company and engaging in meaningful discussions with board members. They should use documents instead of slides to encourage slower and more thoughtful thinking. It is also important to clearly communicate expectations and follow up with board members after the meeting.

Summary

In this video, Glenn Kelman discusses his experience with building a great board and the importance of having a strong partnership with the board. He talks about the process of recruiting board members, the qualities they should possess, and how to effectively work with them. He also emphasizes the role of openness and candidness in board meetings, as well as the value of thorough documentation and preparation beforehand.

Questions & Answers

Q: What is Redfin and what makes it unique?

Redfin is a technology-powered real estate brokerage that has built a real estate website and invented map-based real estate search. They also have their own real estate agents, who are more productive and charge lower fees compared to traditional agents. Redfin has a higher Net Promoter Score than the traditional industry and has achieved significant revenue.

Q: How important is it to choose the right partners when raising money from venture capitalists?

It is crucial to evaluate and choose the right partners when raising money from venture capitalists. Glenn suggests that founders should not focus solely on the brand of the firm, but rather on the quality of the partner. It is important to spend time getting to know the people you are raising money from, as they will be long-term partners in the business. It is difficult to fire board members, so making the right choice upfront is essential.

Q: What are the benefits of having venture capitalists on the board?

Venture capitalists on the board can provide valuable insights and connections. They sit on other technology company boards, which gives founders access to a network of companies they can learn from. Additionally, venture capitalists have been through the process of raising money numerous times and can provide guidance and support throughout the fundraising journey.

Q: What advice does Glenn give on conducting yourself when meeting board members?

Glenn suggests asking James, his partner, for an email in which he outlines how to conduct oneself when meeting board members. He emphasizes the importance of being authentic and genuine, rather than putting on a facade or trying to impress. It is crucial to establish a soulful connection with the partner and evaluate if there is a true fit before committing to work together.

Q: How did Redfin recruit a diverse board with different experiences?

Redfin deliberately sought out operators from different companies and backgrounds to bring diverse experiences and perspectives to the board. They focused on finding people who had relevant expertise and skills that could help the company in different areas. They also considered the peer relationships that these board members could establish with the management team, fostering better communication and understanding.

Q: How did Glenn overcome the initial challenges and develop a strong relationship with the board?

Glenn initially had a strained relationship with the board due to his own rage and resistance to authority. However, he came to realize that he needed to take responsibility for the success of the company and began to approach the board with a different mindset. He started being more open and honest with the board, sharing the real challenges and seeking their help and guidance. This honesty and vulnerability brought about a significant shift in the relationship and allowed for better problem-solving and support.

Q: What did Glenn learn about the importance of having someone to talk to as a CEO?

Glenn realized that being a CEO can be incredibly lonely and challenging. He stressed the need for having someone on the board who can be a sounding board and with whom he can openly discuss the business. This person should be someone who can understand the complexities and struggles of running a company and offer valuable insights and support.

Q: How does Redfin approach board meetings and decision-making?

Redfin avoids making decisions on the spot during board meetings and instead takes the time to carefully consider and evaluate each decision. Glenn emphasized the importance of being thoughtful and precise when explaining what is happening in the business. Redfin uses documents instead of slides to ensure that the whole story and all the details are accurately conveyed. The goal is to have everyone agree on one version of the truth before making decisions.

Q: What advice does Glenn give on selecting board members and conducting interviews?

Glenn advises focusing on finding board members who genuinely love the company's mission and are deeply passionate about what the company is trying to achieve. It is important to look for people who listen more than they talk and who have relevant expertise and experiences. Glenn encourages writing job descriptions for board members to clarify expectations and ensure alignment. He also stresses the significance of diversity on the board and the positive impact it can have on the company.

Q: How does Glenn handle rejecting potential board members?

Glenn suggests that rejecting potential board members should be done personally and by the CEO themselves. It is important to give proper closure and respect to the candidates. Rejecting someone is an unpleasant task, but it should be done to ensure transparency and maintain professional relationships.

Q: How does Glenn involve the management team in board meetings?

Redfin involves the whole management team in the board meetings to allow them to see the inner workings of the board. Glenn mentions that sometimes decisions are made because the board wants it, and it is easier to blame the board for unpopular decisions. This approach helps reinforce that the management team is accountable to the board and facilitates more open communication within the company.

Takeaways

Having a great board and building a strong partnership with them is essential for the success of a company. It is crucial to choose board members who align with the company's mission and values and have the relevant expertise. Openness, candor, and thorough documentation are important principles to follow in board meetings. CEOs should take responsibility as the ultimate decision-makers but should also seek guidance and support from the board. Establishing a soulful connection with board members and having someone to talk to can significantly benefit CEOs. Finally, diversity on the board should not be overlooked, as it brings different perspectives and enriches the overall decision-making process.

Summary & Key Takeaways

• Glenn talks about his initial lack of knowledge about boards, having only seen them in movies, but emphasizes the importance of having a great board partnership.

• He explains the challenges of choosing board members and advises founders to carefully evaluate potential board members during the fundraising process.

• Glenn highlights the importance of a diverse board and the benefits of having operators and experts from different backgrounds and experiences.

• He shares his personal experience of overcoming his initial rage and resistance towards the board and encourages CEOs to take responsibility for their company's success.