Tetiana Horban, CEU iLab
October 13, 2020
Once you launch a startup, you, obviously, want to succeed. But you probably already know that most new businesses fail. Around 20% of them sink during the first two years of functioning, 45% do not surpass the five-year threshold, and 64% fail during the initial decade. Only 25% of ventures make it to 15 years.
So, if you want to succeed but you know that the likelihood of this isn’t that high, what should you do? You got it right, figure out what makes startups successful. Generally, successful startups are:
However, the research suggests that there is another secret weapon that successful startups possess – good mentors.
Endeavor Insight interviewed nearly 700 startup founders, analyzed data from CrunchBase, AngelList, and LinkedIn, and found out that 33% of startup founders who became top performers were all mentored by thriving entrepreneurs. If there is a strong link between the success of a startup and startup mentoring, then apparently you should get a mentor.
But why is startup mentoring important? How can startups benefit from having mentors? How should startups engage with mentors to succeed? With these questions in mind, we turned to some of the mentors and members of the CEU InnovationsLab community. Based on the experience they have shared, we present 7 ways in which entrepreneurs can benefit from startup mentoring:
Startup mentoring can be a long-term engagement, over which you will always have someone to support you and discuss your ideas with. This isn’t possible without trust and chemistry.
“I like to think about startup mentoring as long-term joint thinking. I like to be with a team for a long time, assuming that there is some chemistry, that the team believes I am the right person for them considering the experience or personality”, says Gábor Baranyai, CEU iLab mentor on fundraising, business, and financial planning.
Achilles Georgiu, CEU iLab mentor on consultative selling, business and IT strategy believes trust is one of the most beneficial elements in startup mentoring: “Startups need a mentor because they need someone to trust, someone who can share the experience with them. A mentor is not there to tell you what to do, but they're to ask questions to help you go through, be like your partner, a person you trust and can rely on”.
However, the role of a startup mentor in this trust-based long-term engagement isn’t always the same. “There are different maturity steps which startups go through and every mentor could be valuable at different stages. At the stage of creating the idea and when leveraging it to create the reality, the role of a mentor will be different”, says Achilles.
Of course, a startup mentor will encourage and inspire you. But the mentor should not be the one who agrees with everything you do, as it won’t help you grow. For your benefit, a mentor will be honest with you and tell the truth.
“If a team accepts us as mentors, we have to deliver the message, either it is something positive, or negative. We always have to encourage entrepreneurs but at the same time, it doesn't mean that we are always telling nice things”, says Gábor.
Do not think, though, that you will be discouraged by a good mentor. A good mentor will find a way to make you see your flaws and fix them, it isn’t just about criticizing you. “I think a good mentor can see what others cannot”, opines Achilles.
Péter Szilágyi, head of the FinTech Section at CEU iLab, agrees with this opinion: “A mentor can be instrumental as a closely related outsider who will objectively look at skills you are lacking or any processes that may be inefficient and will advise on them”.
Éva Halász, CEU iLab mentor on business strategy, brand strategy, and communications planning believes a mentor should not necessarily tell startup members what would be the right way forward. Instead, a mentor will rather guide and inspire startups to let them grow:
“Mentoring isn’t about constantly telling people what to do. A good mentor inspires startups in a way that they realize their issues through intense co-working. It’s more about guidance and consulting”.
Why telling startups what to do doesn’t work in startup mentoring? Éva explains that if startup members come up with the idea themselves, internalize what they have been taught subtly, they realize on their own that they have changed or that they need to change. Otherwise, it would be lecturing, but not mentoring.
Getting guidance and inspiration is an advantage of startup mentoring as it puts more responsibilities on the shoulders of startup members and allows them to grow.
“I will never tell a startup what to do. I can have a hypothesis about what they can do, but they have to validate it. I am not somebody omnipotent who has an answer to everything, but I can point at techniques, I can tell them to do more research, and it’s them who come to the conclusion that they need to change a business model”, says Éva.
Gábor agrees with this approach. He says that an entrepreneur should always understand that they are in charge, they are responsible for their own business development and a mentor can only guide:
“As a mentor, I cannot, for example, develop their market, but I can help them to make their own market segmentation, develop marketing, communications, etc. I cannot negotiate with someone on their behalf. But I can tell them who they can talk to, and it will be their responsibility to approach that person. A mentor can only advise but the final decision should be the entrepreneur’s”, says Gábor.
Another benefit of startup mentoring is that you will have someone who will challenge your ideas and approaches. This is important as it will help you avoid narrowing down too much and make you more open to new perspectives.
Achilles says a good mentor is someone who can challenge your thoughts and be honest with you. “You need somebody to keep a mirror in front of you, help you reveal the holistic view of your idea. I have seen startup teams who narrowed down and focused on their idea without seeing it holistically. Check your idea from a wider point of view to see where it stands, is it really good?” says he. A startup mentor is someone who can help you do this.
“I'm curious enough to ask questions that startups have never thought of before. Or I can play a customer in front of them, asking “Why would I buy anything from you? Is it because of your personality? Is it because of the product which can minimize some negative risks which I have?” These are the questions which can help the team go further”, explains Achilles.
“Obviously, running a startup requires a diverse set of skills, a mentor basically helps develop those skill sets”, says Peter. Indeed, you need to know how to develop an effective business model, how to solve problems, manage a team, do web development and proper accounting, how to raise funds, communicate with clients, and so on. Unless most of your team members are professionals from certain fields, you will not know how to handle all these things.
Startup mentoring can come in handy. Mentors aren’t simply guides. They’re first of all professionals in certain fields with years of experience under their belt. You may ask: but why do I need a mentor if I can read articles and watch videos online on how to do certain things? The thing is that a mentor will find a special approach to you that you can learn from their experience and mistakes, and their practical knowledge can be more helpful than any theoretical one you can find online.
“The Internet provides all kinds of information, and you can do amazing courses on many topics. But mentors can work with startups like really good consultants, focusing on their needs, applying tools and knowledge to their specific case, and that's the real value”, says Éva.
It isn’t only the experience that mentors can share. Through years of work they have built strong networks and know many entrepreneurs and professionals in different fields. Startup mentoring can open up networking opportunities for you as you may get to know more people, get specific information from them or new connections. Startup mentoring may help you find a new investor, team member, employee, or another mentor.
A good mentor can teach you how to network and tell you where to search. But remember that the responsibility of talking to people will always be on you.
“A mentor should be invisible. I'd rather stay behind the team, tell them how they can expand the network, or I can point at certain directions. The maximum I can do is to open the doors and share the contacts – “this is the person you can talk to”, but I never step beyond that. Otherwise, I'm not a mentor anymore”, says Achilles.
If you can learn online, get connections through active networking, get a different opinion from family, friends, and team members, then why would you need a mentor? Éva says anything is possible and you may succeed on your own. But think this way: how much time and money will you spend learning from your own mistakes, by trial and error?
“It is still always good to have a mentor if you are a member of a startup. Of course, it is possible to go without a mentor, but you can save a lot of time, effort, and money if you have a mentor. It's much easier if you have a good one”, concluded Éva.
You can have the best startup mentor in the world, with years of experience in entrepreneurship, investment, advising, several MBAs, and so on. No matter how talented and experienced your mentor is, there will be no use of having him or her unless you can listen – that’s one of the things that our mentors agree on.
Éva believes that some startups can be more mentorable than others, and the mentorable ones can be more successful. Startup teams can benefit from startup mentoring only if they can listen.
“Every startup benefits greatly from the right mentor. But a startup should be open-minded to listen, come out of their comfort zone, let go of their own concept for a while, be flexible enough to let go of ideas and concepts which don’t work. Only in this way they can benefit from having a mentor. Good startups are those which listen to their mentor, listen to the customer, and listen to the results of the research”, says she.
You cannot make the most of startup mentoring if you don’t prepare yourself for it. Our mentors have advised on the following:
1) Be open. Be open to consider having a mentor, suggested Gábor. If you open up to having a mentor, you will be more open to hearing a different opinion and talking to different people, which is crucial in business.
2) Know what you need. Éva says you should have at least a rough idea of what you want to do and how. You need to know what you want to learn from a mentor, otherwise, you will waste your time and the time of the mentor. Gábor suggested having a mentoring plan.
3) Be careful to choose the right mentor. Gábor says experience and personality matter a lot. Achilles believes you need to see if there’s chemistry between you. For the start, have a coffee with a mentor, see how you talk and how you can work together. Also, remember it should be a person who can challenge you and not agree with every step you make.
4) Look at which stage you are. Achilles emphasized that a mentor may not escort you through the whole life. Depending on the skills you need to learn or so, you may need different mentors at different stages.
Startup mentoring is important for many reasons. It can provide you with long-term support. It can help you see what you didn’t see before. It can inspire and challenge you. It can help you learn new skills and enlarge your network.
At the end of the day, startup mentoring will help you save money, time, and effort. But this all is not possible unless you learn how to listen and adjust. Now, as you know how startup mentoring can be beneficial, would you consider having one?
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