Startup founders often believe that determination and hard work are all that’s needed to ensure the success of their startups. While these are both important, they are not a substitute for the experiential knowledge that comes from running an established company.
That’s why coaches and mentors are such a crucial part of the equation for startups. Founders that surround themselves with the right people – at the right time – can be instrumental as their venture grows and begins to move toward long-term sustainability.
The Value of Startup Mentors
Mentors have their entrepreneurial track records, with plenty of setbacks and failures before achieving success. What sets them apart from those that don’t succeed is an ability to learn from failure without giving up on their idea. They’ve identified a problem that needs solving, and setbacks are just part of the journey.
They can help startup founders avoid critical pitfalls, such as recruiting an ill-fitted co-founder or investor, especially if they have gone through the same challenges themselves and overcame them.
Mentors can help founders stay focused on their goals and hold them accountable to their vision for their company. A good mentor can help a fledgling entrepreneur think through strategies, crunch numbers, and create a business or marketing plan. His or her guidance can get founders through rough times when their self-confidence may be waning and show them new perspectives and pathways to success.
Mentors help you find weaknesses in your business model. It’s easy to become overly attached to a business plan or to have tunnel vision as to the best way to achieve your goals. A mentor can help you look past your original scope and see the weaknesses in your model.
A mentor can offer a valuable opportunity to understand the perceptions and strategies necessary for a startup to succeed. A mentor can mean the difference between learning when and how to pivot and survive on the steep path that most entrepreneurs experience or becoming another startup casualty statistic.
Impact on Tech Ecosystems
The benefits of mentoring extend to the broader tech ecosystem as well. A strong mentorship network makes for a more robust startup community. Sharing knowledge is critical, and as mentorship increases, more startups will launch with access to knowledge and expertise that startups of previous generations lacked. This fosters a better-informed startup community, one that is less likely to make the mistakes of their predecessors.
More important than knowledge, though, are the connections that the best mentors help startups make. They change the dynamic when they make not only their knowledge accessible to young entrepreneurs but also the experience of their entire networks. Those actions strengthen connections across the whole startup community. New people, ideas, and expertise are continually brought into the mix to support startups.
Connecting potential entrepreneurs to networks promotes mentoring—which is often as valuable as capital to fledgling enterprises.
Key Mentor Characteristics
The type of advisors and mentors that founders should pursue is linked to the specific stage of their business. In the early days, they might have one set of advisors that helps them find their footing, and as they move onto the next phase of growth, the people you look to for relevant advice and insight will evolve.
Coach. Ideally, a mentor will not so much give advice as coach. They are actively involved in the direction of his or her own successful business. A good mentor should also be accessible — not all of the time, but he or she should be able to devote enough time to assist you in genuinely broadening and deepening your understanding in ways you could not have done for yourself.
Communicate. A mentor’s communication style should be direct but supportive. He or she should have the ability to help you see problems and challenges before they happen and make early course corrections for you and your company. A mentor should be able to supply vital constructive criticism and a well-rounded, objective point of view.
Character. Look for chemistry in the mentor-mentee relationship: some experts even advise looking outside your industry until you find the right match. Don’t seek friendship from a mentor, but rather the depth of knowledge and character. Look for someone you can trust, who will remain candid yet supportive. Try to avoid strongly opinionated mentors. There should be space to discuss differing viewpoints and merge on common grounds quickly and openly.
Vision. Mentors should be visionaries and problem solvers.Two important goals for a startup are finding creative solutions to current problems and looking beyond the daily startup buzz. A great startup mentor should help you find viable solutions for the issues faced by your startup—whether it be funding, technology, market access, or organization culture. The mentor should help you build solutions to these problems creatively and efficiently and draw upon his/her experiential knowledge to tackle similar situations.
The mentor should also help you look beyond the daily operational and tactical challenges faced by your startup and help you build a grander vision for it. The mentor should help you look at the evolving technology trends and changing market dynamics, guide you in developing alternative revenue streams, and scale/solidify your position in the market.
Ideally, mentors serve as sounding boards for entrepreneurs. They should raise questions and issues about each stage of building a company. Being a good mentor means knowing when the time is right to step back and when it’s time to offer guidance. Mentorship is a process, and it’s counterproductive to overwhelm a CEO with too much advice without allowing them to integrate it with their own ideas and other advice they may be receiving.
For entrepreneurs, the relationship should be more about listening, considering, thinking through complex issues, and then making decisions. They should understand exactly what they want mentors to do. Are they looking for networking opportunities, introductions to great contacts, or advice on market evaluations or product development? The needs of entrepreneurs will change over time – and so should the types of mentor relationships.
Fast Facts on the Value Mentors Bring to Startups
- 70% of mentored businesses survive five years, twice the survival rate of non-mentored companies, according to a study by UPS. The same study found that 88% of companies said that having a mentor is invaluable.
- Additionally, startups are seven times more likely to raise investment money and three-and-a-half times more likely to grow user numbers for their products and services if they have helpful mentors.
- 92% of small business owners agree that mentors have a direct impact on the growth and survival of their business.
- A Stanford University executive coaching survey found that 80% of CEOs received some form of mentorship; in a Sage study, 93% startups stated that mentorship is integral to success.
- According to a study from the American Society for Training and Development, 70% of Fortune 500 companies provide mentorship opportunities
- Data has shown that US businesses receiving mentorship increased their annual revenue by an average of 83%, compared to 16% for those who don’t use mentorship.