July 24, 2018 – One of the more important but over looked aspects of creating a successful tech business is identifying, cultivating and utilizing mentors. ITEN offers their member startup companies access to a robust and diverse group of local tech mentors through their Mentor Match Program. It is an on-line tool accessed via the ITEN website to search for and connect with mentors who have the expertise that startups may be looking for. If you are a local tech company and are struggling to identify quality mentors I would suggest you join ITEN. It’s absolutely free to join and you may then take advantage of this Mentor Match Program that list over 60 mentors in various areas of expertise. If you have not considered utilizing mentors or have not been able to leverage your current mentors for success, hopefully you will find some of the topics briefly discussed in this blog post quite helpful!
In 2014 Endeavor Insight studied thousands of startups, specifically NYC Tech Startups from 2003-2013 with the goal of identifying why certain tech firms were successful while others were not. Their study found that the simple strategy of recruiting great mentors can increase a company’s odds of success more than almost anything else (see figure below). Additionally, their study identified three lessons that tech founders can use to build effective mentor relationships:
- Mentor quality matters.Simply having mentors isn’t enough. If you want your company to be among the best, you need a mentor who knows how to reach that level.
- Good mentorship requires a sustained relationship.The top-performing mentors and protégés in the New York study met together three or more times with a company founder to mentor.
- Great mentors focus on critical business issues.It’s important to utilize your mentors’ talents to the fullest.
You can read a summary of their study in a Tech Crunch article from 2015 – Mentors Are The Secret Weapons Of Successful Startups, written by Rhett Morris the director of Endeavor Insight; a nonprofit that supports high-impact entrepreneurs across the world. And here are some other great blog posts on the value of mentoring:
- We Studied 100 Mentor-Mentee Matches — Here’s What Makes Mentorship Work
- Snag the Best Advisors for Your Startup, from Best-selling Authors to Fortune 500 CEOs
- Why You’re Wiser with an Adviser
- Advice Is a Gift Treat it That Way
Now that we have established the value of having mentors, let’s dive into how to effectively manage mentor/mentee relationships to maximize the value of those relationships.
There are three main areas where good mentors can add value to founders. Mentors can serve as a sounding boarding that provides an outside perspective on new ideas or solutions to current issues. Hopefully your mentors have personal experience either in your market/domain or with a similar type of company and thus their outside perspectives will be based on actual experience- i.e. what worked or did not work with their previous companies. Reality is that most of the issues founders face are fairly similar across multiple markets and different types of companies, so having direct access to mentors that have had to address those issues themselves can be extremely valuable for a first-time founder and can keep you from making “rookie mistakes”. Additionally, mentors can be used to fill in specific knowledge gaps that the founding team may not have much experience with. Successfully launching a company requires the founders to become experts in a wide arrange of topics. Thus, leveraging mentors to fill your knowledge gap can be an effective way to gain exposure and an understanding of domains that the founders have limited experience with- financial modeling, manufacturing, eCommerce, social media, etc. And as mentors get to know you and your company they can also provide much needed connections to investors, other mentors, potential customers, or employees.
The number one rule of the mentor/mentee relationship is “mutual respect”. Mentees need to respect the mentors time. Which includes an upfront discussion of the time the mentor is willing to offer, identifying the most preferred communication method and occurrence, identifying convenient times and locations to me- i.e. finding convenient times and locations for them, not you, to meet. And be sure to prepare before your meeting and focus on discussing current and future critical business issues in order to maximize your time with a mentor.
Mentors need to provide actual value to their mentees. This means having an honest discussion about what the mentor’s expertise are and what the companies needs are in order to identify where each mentor can add value. Additionally, a mentor’s expectations related to compensation- both short term and long term, as well as developing an understanding on the mentee’s expectation of turn-around time on communications. This last one is important since entrepreneurs need to know which mentors they can turn to for quick advice.
Mentor Compensation is a tricky subject to discuss since it’s very specific to the individual mentor and the company. In general, I suggest that mentors and mentees work together for 2-3 months without formalizing an agreement to ensure that the relationship provides value to both parties. The Founders Institute has some advice, including sample legal documents, on how much equity to compensate advisors and how to structure the compensation. I will add that founders should discuss all equity compensation with your corporate attorney and to make sure that any mentor/advisor agreement contains a vesting clause where the equity is awarded over time assuming the relationship continues to provide value. I will also point out that not every mentor/mentee relationship needs to be formalized. You might find that for some mentors a more informal relationship, meeting for coffee or happy hour once a month or so, may be the best structure for both the mentor and mentee.
As an entrepreneur there are a couple of things to keep in mind regarding managing your mentor relationships:
- While the decisions you make are important they are not permanent. I have seen too many new entrepreneurs develop a fear of making the wrong decision so they make no decision. Indecisiveness will kill your company, its better to make the wrong decision, realize it was the wrong decision, and make a course correction than make no decision. Use your mentors to help make the best decision possible with all available information, but you need to make the decisions.
- Remember that your mentors can’t read your mind so you need to ask them directly about the critical issues/challenges you are facing. Don’t beat around the bush and be passive with your mentors. They want to help you but can only help you if they know what you need help with.
- Related to the point above; communicate sparsely, regularly and pithily with your mentors. But be respective of their time and identify how they prefer to receive communications.
- Pithily – brief, forceful, and meaningful in expression; full of vigor, substance, or meaning; terse; forcible
- Be ready for mentor whiplash. The more people you ask for help the more opinions you are going to receive. Keep in mind that each investor represents a single data point and it’s your responsibility to identify the common themes across all of the opinions you received.
- Make developing a relationship with your mentor(s) a priority.
The gold standard for Mentor Best Practices is from Techstars, specifically their well-publicized Mentor Manifesto. Brad Feld of Foundry Group, and one of the Founders of Techstars, has written individual blog posts (linked below) discussing his personal views on the 18 aspects of the manifesto. Anyone active in mentoring, including mentee’s, should familiarize themselves with Techstars Manifesto to ensure you are maintaining the highest values and characteristics related to mentorship.
- Be socratic.
- Expect nothing in return (you’ll be delighted with what you do get back).
- Be authentic / practice what you preach.
- Be direct. Tell the truth, however hard.
- Listen too.
- The best mentor relationships eventually become two-way.
- Be responsive.
- Adopt at least one company every single year. Experience counts.
- Clearly separate opinion from fact.
- Hold information in confidence.
- Clearly commit to mentor or do not. Either is fine.
- Know what you don’t know. Say I don’t know when you don’t know. “I don’t know” is preferable to bravado.
- Guide, don’t control. Teams must make their own decisions. Guide but never tell them what to do. Understand that it’s their company, not yours.
- Accept and communicate with other mentors that get involved.
- Be optimistic.
- Provide specific actionable advice, don’t be vague.
- Be challenging/robust but never destructive.
- Have empathy. Remember that startups are hard.