In our Startup NOW accelerator program, we cannot stress enough the need of mentors to help make you successful as an entrepreneur. I have covered this topic before in past articles. I have even discussed the reality that, even if you are not interested in pursuing an entrepreneurial career, mentors can be a key success factor in helping you navigate life in general.
A scenario that plays out consistently when aspiring entrepreneurs gather in conversation, whether in a conference or even in a loosely organized setting, revolves about the excitement due to the involvement or sometimes even the slightest degree of the remote possibility of involvement of an investor or a group of investors. I have heard it a thousand times. Stories about investor interest, and bragging contests about who has the most significant instance of that, have become a common occurrence around the periphery of many startup ecosystems.
I contend that real bragging rights are earned by self-aware and level headed early stage entrepreneurs that can count the right mentor or mentors in their contact list. All else being equal, I am more likely to get impressed by an early stage entrepreneur pointing out a valuable mentor as part of their core team, than mentioning a deep pocketed investor. Why? Because I’ve seen enough of these stories play out, and because I’ve seen enough startups fizzle in the early stage. The main reason they fizzle is because they cannot explain well the problem they are solving. They cannot tell me with certitude who their typical customer is, or how they are going to get their product or service to this customer. They cannot tell me how much money they will make from this, and they do not have a team in place to accomplish the task, or even the wherewithal to assemble one.
These things they cannot tell me, are exactly the things investors want to know. If you are an early stage entrepreneur who think you have and brag about having attracted investor interest, and you cannot answer these questions posed before, I pity the investor. Novice investors have this bad tendency to flock to good pitchmen without a validated business model and an un-researched market. In an ecosystem that is brewing with excitement, only one or two wildly successful stories will provide enough exuberance to act as a magnet for undisciplined entrepreneurs and investors to bloviate about and concoct great stories that end up failing. If you listen to Bill Gross from Idealab and his study on the reasons for startup success, of the top 5 factors leading to it across more than 200 companies he looked at, the bottom one was funding, with 14% of them attributing that to not having failed. Significantly more important factors leading to success where timing, having the right team, executing well, the actual idea, and the business model around the idea. These are exactly the things that mentors can help you with. Mentors will help you build the right team. The right mentor with the right experience, skepticism, and cynicism will make you think in the right ways and have you go through all the protocols that once helped them to help you test your idea and your business model. Each mentor that you find hopefully will be an expert at one thing – recruiting people, aligning distribution, validating product-market fit, designing a business model. If you can assemble a group of people like these around you, who volunteer their time and their interest to make you successful, you can brag about that all the way to the bank. Why? Because it sends important signals about yourself, that most level headed, practical and commonsensical investors like. It signals that you are a professional, that you are aware of your limitations and are not afraid to ask for help, and that you are capable of seeking out the best people to help you AND that you have the demeanor, personality and depth of character that attracts these people voluntarily. In exchange, they give you their most valuable and irreplaceable asset – their time – for the payout of the satisfaction of a real possibility of achieving, along with you, something that is bigger in value than the combined original parts.