Startup tips – how to choose mentors?
Over the past several weeks, I’ve met several entrepreneurs. Some young and others experienced. Some have boot-strapped their ventures, others have secured some financing from friends and angel investors. All of them have a dream and the desire to succeed but only very few will. Usually, those that don’t succeed realize that they’ve been chasing the wrong opportunity with the wrong business model and wrong team much much later in the game, if at all.
What if they had been made aware of the pitfalls and dangers early on and been prepared to deal with them? What if they had had the benefit of experienced counsel from mentors and advisors? While having mentors and advisors is in itself no guarantee of success, having the right mentors can often times reduce the agony of late unhappy realizations of the state of the business.
What was interesting to me about the entrepreneurial teams I met was the absence of any advisors/mentors who were either directly or indirectly involved. If one looks at entrepreneurs say, in the US, more often than not, entrepreneurial teams have advisors and mentors working closely with them. In many cases, angel investors double up as advisors.
Why are Indian entrepreneurs shy about involving advisors? While the entrepreneurial eco-system here is not as mature as in the US and the culture of mentoring isn’t as widely prevalent, the fact remains that most entrepreneurs are hesitant to have advisors. Some of the hesitation can be attributed to lack of awareness and shyness.
The larger reason and more serious reason is due to fear, anxiety, and arrogance. Fear about losing control and influence. Fear of sharing company information with a “third party”. Fear of having to share the pie. Arrogance about knowing it all.
While no man is an island it is even more true that no startup can be built in isolation. The importance of building bridges and relationships cannot be over-stated. The importance of sounding out business strategies, feedback on technology direction, dealing with issues relating to employees, sales & marketing, customers introductions, partnerships and so on with someone who’s experienced can be critical. It is worth considering the setting up of an advisory board consisting of people who bring a diverse set of complementary competencies to the table and who can provide credibility and legitimacy to the fledgling company.
There are two types of advisors worth considering:
(a) a big name brand individual with an acknowledged set of achievements & expertise and
(b) an executive who might not be personally well known but by virture of his/her position in the corporate world can positively impact the startup.
Advisory boards are also usually compensated in stock or a combination of cash and stock. These advisors can help you tremendously; so spend quality time in creating the advisory board. Engaging with your advisors and mentors on a regular basis, providing updates, seeking and receiving feedback can prove to be invaluable. Having a shoulder to cry and lean on in times of trouble can be uplifting. Being spoken to directly about the dangers ahead can be critical for success. For this to happen, inhibitions need to be shed; fear and anxiety need to be replaced by confidence, humility and a willingness to learn.
Of late, industry, entrepreneurial and academic groups (including Nasscom and TiE) have started mentoring programmes for entrepreneurs. These programmes are becoming popular but still have a way to go before they become mainstream and become acceptable to all entrepreneurs. In addition, there is a growing number of successful entrepreneurs and corporate executives who can be tapped as mentors and advisors.
The benefits of such associations can be enormous and can take the company on another trajectory altogether. While there are issues of the tactical “here and now” that need resolution, it is very important to also build the foundations for what could be a big company. At the same time, being aware of the risks and issues of pursuing one path over another can save many sleepless nights.
Paraphrasing a line from an ad for a popular chewing gum, “Mento(r)s dimaag ki batti jala de!“.
What do you think?
Republished with author's permission
Totally agree with what you say.
The crucial difference between the Silicon Valley and elsewhere is the number of avenues that are available to meet up with prospective mentors. These could be introductions through your professors, other entrepreneurs, accountants, solicitor, bank etc. Not to mention the numerous networking sessions.
There is also plenty of “patient” capital chasing good investments. The whole Angel scene is well established.
You are right about shyness being a part of our psyche. I think some of us are uncomfortable asking for something for clearly benefits us.
Totally agree. Another reason, i think, is that entrepreneurs love to believe they are “right” and like to dismiss anything to the contrary.
Ashish,
Great point to discuss.
It is true that an advisory board definitely helps in giving a second perspective and so would some one in an executive advisory position as well.
I would like to believe however that, even without advisory executives or boards, entrepreneurs and start-ups do seek a lot of advice and inputs in an unofficial manner. There are individuals or groups whom many of us would approach in different circumstances for advice or feedback or to check if things are being done the right way.
For example, if i am having certain doubts over Intellectual property or over certain legal matters, i would definitely approach some one i know or through my contacts for advice.
However when you do start off, the contacts and connections are what are difficult to reach out and it does help to have some one who has a few connections for you to latch on to and allow for a wider circle of experienced people to connect to on various areas you might need advice or feedback.
While it is a definite plus to have an advisory board or executive, what would really help start-ups is a range of experts or teams they can bounce their queries to when they need specific feedback.
Indeed, the presence of a “good” adviser can turn the fortunes of the startup.
Also, with just only one cycle of successful Entrepreneurs in India, there may be many of them available as advisors, however, not many will still be good at advisory. Giving advise is also a skill which needs to be learnt over a period of time.
Let India has 2-3 cycles of succesful entrepreneurs, we may have more favorable advisory season in India.
In addition to all the interesting insight, few things to remember always are:
1. “A good adviser is the one, who gives the advise and finally leaves the decision over Executive team”, even lack of experience at the advisor end may lead to conflicting situations. This is when the CEO has testing times to take decisions.
2. When an adviser works closely with you, he too is almost the part of a team, thus, the chances of receiving a detached advise keeps getting lower.
3. Finding one/two unofficial advisors (the unexposed ones), who are detached with any personal interest (profits) but excited about the product may come out to be a boon during some critical decision making.
4. Not to have too many advisors as well, unless really justified.
I believe mentors are also choosy about the start-ups they choose to mentor. If they don’t see you attracting a VC there’s no way they will mentor you. That means if you do not wish to attract the kind of money that a VC will want to invest, you are left in the cold. That leaves out a lot of people like me – people who are searching for investments in the range of 60-75 lakhs.
And before someone tells me to go to friends and family, let me tell them that I already have!!
Ours is a print-on-demand publishing house. We are only two right now but, besides clients in India, we have clients from Germany, USA, UK, Canada and Tanzania. Our Google analytics software shows expressions of interest from 34 countries. Let me repeat – we are only two and are currently managing an active client list of 37. We want to scale up – be the Lulu of Asia and even attract a major chunk of Lulu’s clientele because our cost/book is cheaper. But all of it does not warrant 1m USD as investments. So why in God’s name would I ask for it?
Our website is http://cinnamonteal.dogearsetc.com
So I am doing the next best thing. Selling shares of my company. I wouldn’t do it if I were not convinced of the numbers I have put in to arrive at the price per share. Go have a look, the url is
http://www.dogearsetc.com/cinnamonteal/invest.html
Thank you,
Leonard Fernandes
==============================
Cell: +91-98503 98530
http://books.dogearsetc.com (our online book store)
http://cinnamonteal.dogearsetc.com (our print-on-demand service)
http://thepost.dogearsetc.com (our weekly newsletter)
Leonard,
Your financial analysis is faulty. Why are you using P/E multiple when you have anyway calculated the PV of future earnings? Even after assuming your earning forecasts are right, you have overvalued the share price by a factor of 5. Don’t try to mix relative and fundamental valuation !
And no way you can have a growth of 50% p.a. indefinitely for a business with low entry barrier. That’s just absurd. You also have not taken into account any debt which will be required.
[...] Leonard Fernandes: I believe mentors are also choosy about the start-ups they choose to mentor. If they don’t… [...]
hi
I have a business idea and planning to start a venture by getting VC funding.
Any idea of whom I can approach for mentors or any organisation that can help me?