Mentors form a critically important part of building a successful business.
According to the United States’ Small Business Administration’s Office of Advocacy survey, only half of all small businesses survive more than five years and about 10–12 percent of all employee-based firms close each year. The research also shows those small businesses that receive three or more hours of mentoring achieve higher revenues and increased business growth. This has been further confirmed by a 2014 survey by The UPS Store, that about 70 percent of small businesses that receive mentoring survive more than five years — double the survival rate of non-mentored businesses.
Aside from the United States, research conducted by the UK’s Federation of Small Businesses has shown that small businesses that have received mentorship have superior survivability rates when compared to non-mentored businesses.
Below are some of the great proven ways mentorship helps startups to scale.
Mentors Have Deep Knowledge About Their Industries:
A mentor who is in your industry and who has been in the same line of a startup as you do would help you to understand the depth of your business and the complex nature of your market. However, having a mentor who focuses on a particular niche is better than having a mentor who provides general advice which your startup may need.
Dr. Arthur Krebber shares some thoughts about why niche mentors are better than general ones.
Being a marketing magician does not make you a supply chain supremo. When placed on the throne of Mentor, you run the risk of acting like the oracle of all things startup-esque.
A dose of self-reflection is critical in this regard. What is your advisory niche — i.e. in what two to three areas can you really add value? And are those in line with what your mentee is after? Depth of advice always beats breadth of advice.
Startups Can Avoid Many Costly Mistakes With The Help Of A Mentor
With an experienced mentor, your startup can scale through several mistakes. Mentors usually do not have vested interests in your business. They, therefore, seem to say the truth the way it is. They will tell you things no one else will, even if it hurts.
Founder of IrokoTv, Jason Njoku says mentoring helped him to a great extent while growing iROKOtv.
I think it’s super important, irrespective of whatever industry you’re in, to try and be on friendly terms with other significant players. The VOD players above are all slightly different, across different Geo’s, yet much further ahead in terms of market development than iROKOtv. So I have A LOT to learn. Speaking with Suk [Park, Co-Founder of DramaFever.com] a few Fridays ago in NYC really made me realise how little iROKOtv had actually achieved. In the 4 hours I spent at DramaFever’s madison avenue office, I learned more than I could ever know otherwise, even if I read hundreds of books or blog articles. Their successes and challenges helped narrow my entire company’s focus and thus make necessary changes earlier rather than later. I will be circling in with Suk on a regular basis just to trade ideas, borrow some wisdom and genuinely try and re-create the greatness DramaFever has created. Ego aside. Where possible. Get a mentor. Or a friend.
Mentors Can Lend You Their Network
Having a mentor with strong connections in the industry and the ecosystem you are operating in will help you in no small ways. The mentor can help to open multiple doors. Most investors feel more comfortable and would most probably make an investment if the startup was referred to them by their network. This applies also in the most business to business engagements. For instance, it is more effective to get referred by a vendor that supplies to a large corporation than cold calling.
Michelle Shroeder, an entrepreneur, and blogger who runs the personal finance and lifestyle blog Making Sense of Cents, that turns in over $70,000 in revenue per month says that as a mentor:
“The most painful mistake I see first-time (or inexperienced) entrepreneurs make is that they see others in their industry or niche as competition. This can significantly hold you back, as you may never learn industry secrets and tips, make genuine friends, and more.”
“Don’t view others in your niche as competition. Network and build relationships.” @senseofcents
“Instead, I think you should see others in your industry or niche as colleagues and friends. You should network with others, attend conferences, reach out to people, and more.”
Shola Akinlade, Co-founder of Paystack is one of the startup owners that benefited from this network:
“I applied to YCombinator in 2007 for my first company, Precurio. We did not get in, but we kept working on the business. In 2014, I realised that so many businesses were struggling to accept payments from their customers online and so I started working on Paystack to solve the problem and make payments easy for businesses. While working on Paystack, someone told YC about me and one of the YC partners encouraged me to apply. I applied and after some back and forth, we got invited for an interview in Silicon Valley in November 2014, ” he said.
Most Mentors Are Entrepreneurs Too So They Share In The Struggle
Mentors themselves understand what it means to run a business and succeed. Entrepreneurship is hard and someone who has gone through that path can understand the various issues and guide you in the best ways. Mentors are already familiar with their areas of specialization. Learning from them can help startups wade through unclear waters. Mentors can bring in a sense of direction and balance for startups when things go awful. They can help startups spot new opportunities. A mentor who has built a company from idea to exit is an ideal being. It always helps if you are mentored by someone who has gone through the process of entrepreneurship and has been successful at it. Although having mentors from big corporates who manage large businesses is good, it is a different game when you need to validate your idea, raise money and steer the company through difficult times. This when you would require an entrepreneur who has had that experience.
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Mentors Are Flexible With Their Wealth of Experience
Unlike starters who are yet to have a feel of what the business terrain looks like, most visionary mentors are already looking ahead towards finding a lot of creative solutions to current problems. A great startup mentor can help you to look beyond the daily operational and tactical issues faced by your startup and help you build a bigger vision for it. In this regard, you should hope that the mentor should help you look at the evolving technology trends and changing market dynamics. The mentor should also help you build alternative revenue sources, and scale and solidify your position in the market.
Key Points About Finding The Right Mentors
- A startup owner has to be careful about choosing a mentor. Usually, a single mentor may not possess all the elements listed above. In this case, it is extremely necessary that you may need two or three mentors with different levels of engagements guiding you.
Nav Athwal, founder, and CEO of RealtyShares sees mentors as a very important part of the journey for startups
As a founder, there’s a tendency to assume that your grit and hard work are sufficient to drive the success of your startup. While these things can take you far, they’re not a substitute for the experiential knowledge that comes from heading up an established company.
That’s what makes mentors and advisors such a crucial part of the equation for startups. Surrounding yourself with the right people — at the right time — can be instrumental as you grow and begin to move toward long-term sustainability.
The type of mentors and advisors that founders should associate themselves with is linked to what stage their business is in. In the early days, you might have one set of advisors that helps you find your footing, and as you move onto the next phase of growth, the people you look to for advice and insight will in turn evolve, he says.
Avoid Celebrity Mentors
Many first-time founders make the mistake of chasing celebrity mentors. While they do bring a lot to the table, it’s not necessary they are the right fit for your needs. Founders must do extensive research before signing on a mentor, because the relationship is more than temporary.
The first step in finding the right mentor is to ask what is it that you want a mentor to help with. “I help structuring my ESOP plan”, “I need to create employee policies that will help me attract and retain the right talent”, “I need to find out the best technology investments for my business”. A concrete question that the mentor can answer for you will help narrow down the list considerably, notes Inc42 BrandLabs.
Bottom Line:
Mentors are good for the growth and the eventual success of startups. However, in looking out for one, follow certain sound standards. For instance:
- Don’t go for celebrity mentors. Find a tested, trusted and experienced entrepreneur or expert.
- Plan specific problems you would want the mentor to help you solve and focus on them with the mentors until they are solved.
- You can rely on more than one mentors based on their expertise in specific areas at a time
- Don’t force yourself into the relationship; let it grow on itself.
- Most times, sticking to the paid consulting type of mentorship may not be a good choice. They may lack the capacity to be open and objective for fear of losing their earnings.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.