PODCASTS / E123

Episode 123 – How To Filter Advice

August 1, 2024

One of the most important weekly tasks for founders new to CPG is networking. And yes, you better damn well be doing it every week, or don’t admit it to me.

If you don’t build a broad professional network across stakeholders sets, your ability to source advice and expertise quickly when opportunity strikes will remain low, and then you will be faced to chase opportunities without the benefit of more experienced eyes guiding you.

The problem is not in getting industry elders to toss out advice. The problem is that it’s actually too easy to acquire crap advice from the well-intentioned. I hope that what I’m about to share helps founders learn to vet advice better, and seek it out proactively better as well. The latter being my preferred recommendation, is try not to become an audience to unsolicited advice of any kind.

First, there is the specter of decontextualized advice. It’s most likely to come from the older generations, who are most tempted, socially and culturally, to become patronizing advisors. They often mean well, true. I’ve talked to many of them. But really, I think they’re just bored. 

Decontextualized advice is generally coming at you unsolicited by the random hordes out there. The zoom hordes. It also comes from investors who are grooming you. What am I talking about when I say decontextualized advice? I’m talking about advice that’s given without exploring A, your financial goals; B, your business model; or C, the specific competitive context of your offering in its category. All praise category analysis. Sorry, couldn’t resist. 

It takes effort to offer good business advice. The advisor has to spend time soaking in details. And how many are willing in to put in the time of your average Board member for free ad hoc for someone in their network? Think about it. This is why quality advice through mere networking is very rare.

Decontextualized advice is shallow, hastily formed and plucked out of past experience, detached from its original context, and then sloppily thrown your way as some kind of a gift. Thanks?

Decontextualized advice derives from a classic ego fallacy in human logic. I don’t have an Aristotle quote, but I’m sure he beat me to this concept.

My superficial read of your thing reminds me of a business I ran, or some such anecdote I know more than you about, yada yada yada. 

Poor extrapolation, weak interpretation, low content, shitty advice. It’s as likely as a coin toss to be correct. Do you have a coin? You probably don’t. You’re so digital. Awesome.

Unsolicited thought-provoking questions are the only thing you should happily receive from someone who hasn’t studied the context of your business. That, ladies and gentlemen, is the sign of the well-intentioned advisor. Good questions.

You know, if I were you, I would take note of unsolicited advice anyways, but just don’t react to any of it unless you’re getting the exact same comment across different stakeholder groups, preferably those with conflicting business interests.

Experienced entrepreneurs, older industry titans, agencies, consultants, your smelly older brother. None of them have the same interests, so if they’re all saying the same thing, then yes, you probably need to go and have a drink. Patterns are generally revealing of something that potentially is quite real about the social reception of your thingamajiggy.

This leads me to the second principle of advice filtering, the empirical basis for claiming to know something. Ooh, so fancy.

Remember, the less of a name you are in the industry, the more you will attract free advice and negative comments. It’s part of being at the bottom of the social hierarchy in general. The higher up you are, the more bullsh*t praise you will receive.  It’s Sociology 101, folks. This is why most unsolicited, decontextualized advice has to be ignored in the long term.

However, within the ocean of critiques will be some pearls, but how do you find them? Well, that’s what the second filter’s for. You’ve got to filter for some details on who is giving the critique. Let’s assume here that this is a critique you more or less invited as a proactive learner. 

You’ll save yourself a lot of time by only soliciting critiques from stakeholders who’ve had access to hundreds of case studies related to the business issue their critique focuses on. This case study experience should lend them to decent pattern acquisition, absent of statistical data set.

Certainly, that hard-won pattern recognition is vastly better than just chatting up a couple of entrepreneurs over drinks, who’ve run one or two companies on any random topic that’s bothering you at the moment. This is the false promise of startup networking groups in local cities.

Why? Because two cases, even from entrepreneurs who practically killed themselves to run those one or two companies, cannot yield patterns. Just like two points in time does not constituteth a trendeth. No matter how much you stare at those two points and want to make a line appear.

Thirdly, the final filter that you need to use is that you have to ask yourself a question. Is the advice that I just received part of this person’s core expertise or something tangential they’ve learned along the way? The osmosis knowledge, right?

My favorite punching bag here are the numerous private equity deal hunters and finance brokers who always seem to show up at every single in-person event. These are the folks who love to spout off over drinks about branding and marketing and pack design, and yada yada yada. But they have no formal training in it, and they have no formal pattern analysis based on any data, either. They literally have no fucking idea what they’re talking about. Most of them are just another bloviating guy with a cocktail. I honestly don’t know how they find time to swallow. 

You know, I guess if you’re rich, your opinion must automatically be well-educated.

I’ve rarely met anybody in private equity who stays in their finance lane. I really haven’t. It’s a problem because I think it’s something to do with living inside the fortress of capital.

But more seriously, how do you know if someone is talking outside their core expertise, unless they’re just honest about it? Well, they say phrases like, “I don’t know.” A lot. 

So just make sure that any advice you act on passes the three tests above. It comes to you after a deep contextual understanding of your business, financial goals and competitive situation; was based on the advisor’s pattern knowledge on a specific topic, not just a few anecdotes; and lastly, was tied to their actual core expertise. And make sure they use humble phrases like “I don’t know” routinely. 

Be safe out there, folks.