Steve O'Connor is chief executive of startup electricity retailer Flick Electric, which currently has 22 staff. O'Connor is a serial entrepreneur and a previous CEO of Wellington startup incubator Creative HQ.
When did you first bring on someone in a governance role at Flick Electric?
We started interacting with Marcel van den Assum, who's now our chairman, quite early in 2014, even though we didn't launch formally in market until August 2014. At that time I personally wanted to connect with him and get his feedback on things, but in the background I was also trying to encourage a level of interest in him in the hope that a bit further down the line he might be interested in joining our team.
How did you initially connect with him?
I've known Marcel for around five years, primarily through my involvement with Creative HQ. Marcel is the chairman of the Angel Association of New Zealand and puts a lot of time and effort into supporting the wider startup ecosystem. I'd seen him do great things with businesses at Creative HQ and with other businesses along the way like GreenButton. He has that really interesting mix of experience at senior levels in big businesses and also with early-stage ventures.
Why did you want to get a chairman on board so early in the business?
It was because I'd seen the benefits of good governance. At Creative HQ we put in place structures that ensured our entrepreneurs had mentors and advisors, then hopefully an advisory board and ultimately a more formal board. I saw the benefits of that again and again if it's done well. I'd also been in my own companies in the past where we'd held tight control of the business and hadn't had the benefit of the insights and guidance you can get from an advisory board or a board, and I knew that something was missing.
So in those earlier businesses had it just not been on your radar to establish governance structures?
I'd certainly dealt with boards when I'd been on executive teams in bigger businesses, so I knew the value of them. But particularly when you have a group of founders in a business you run the risk of not getting over your fears of having other people involved and that worry about dilution of control, or that it's going to be a waste of time and effort for little benefit.
But no matter how good a team of founders you have you can never think you've got all the skills and capabilities you need, because no one person does and probably no one team does. You should always be honest about the skills and experiences you don't have and those are the things you need to look for in your board.
What benefits have you derived from having that governance experience on board with Flick?
We knew we were going to need external investment so we knew a board was coming no matter what, but we started instituting one before we needed to because we saw wider benefits. We have an amazing group of entrepreneurs who have founded Flick, but we're all fairly headstrong individuals. That has it's strengths — you need tireless individuals to drive things forward — but sometimes it can negatively impact your judgement. We knew we were starting to see things in the business we hadn't seen before, and we needed some wider perspectives on our business, and more confidence around the decisions we were making.
Marcel helped an awful lot with setting up the board, in terms of setting the expectations, roles and functions. That's helped us create an environment where we're really open about everything that's material in the business, whether it's good or bad. In some respects we're trying to dig up the bad stuff and say 'what do we do with this?' because that helps us problem solve and make better decisions.
What advice would you have for other business owners looking to start instituting some governance?
• Treat it as one of your biggest business opportunities. People don't often talk about governance in that way, but if you really invest in it up front and in the ongoing aspects of getting it right it can seriously make your business.
• Value your board — personally and financially, because it's a two-way relationship.
• Be really open personally, and about your business. You have to be able to talk about the challenges as well as the good stuff. Good directors aren't going to share your views all of the time so you have to be able to listen, consider alternative views, and at times adapt your thinking.
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