June 13, 2016
This series is brought to you in partnership with the Consumer Technology Association (formerly the Consumer Electronics Association).
“Founders have a tendency to drink their own Kool-Aid and can convince themselves it tastes good when perhaps it needs more or less sugar,” described Invisionate founder and CEO George Stepancich when asked why he thinks it’s important for entrepreneurs to seek out mentors. An experienced entrepreneur and a mentor himself for the Consumer Technology Association’s Mentor Program, Stepancich knows all too well how crucial it is for entrepreneurs to have trusted advisors. Unfortunately, for some entrepreneurs, there’s this innate unwillingness to seek mentors – and this could hurt them in the long-run.
The Myth of Entrepreneur Self-Reliance
“The myth of the American entrepreneur is based on self-reliance: a single-minded obsession with a goal, with a bit of arrogance sprinkled on it,” said Paul Sabbah, president and founder of Stamford International. “The arrogance serves a vital purpose – it convinces the founder that they won’t fail, despite the odds. But it also makes them less open to mentorship, for fear that taking advice somehow cheapens their accomplishment.”
While entrepreneurship necessarily involves starting your own business, you shouldn’t misinterpret it as something that must be pursued without help or advice from others. On the contrary: the road to entrepreneurship is paved with the footsteps of many, all working together to make something succeed. According to Greg Borchardt, managing director and cofounder of Caerus Ventures, the most successful entrepreneurs are actually the ones that actively seek out advice and feedback – whether that’s through a mentor or a group of advisors:
“[These entrepreneurs] understand their strengths and weaknesses, and they surround themselves with people who have complimentary skill sets. Successful entrepreneurs are open to continuous learning.”
Entrepreneurs (even serial entrepreneurs) don’t know everything. And, even if you did, it’s not necessarily a bad thing to have people keeping tabs on you. Even if it’s just having someone else reinforce your certain beliefs or strategies, having a mentor can help.
“Even if you ‘know it all’, it can help to hear it once again, so a bit of nagging and keeping people to commitments can help,” said BlueSalve principal and cofounder Robert Heiblim. “I think it takes some self awareness on the part of the mentee that they need help. Even an argument that leads to conviction or reinforcement of a view may be helpful even if that does not lead to a long-term mentor/mentee relationship.”
Mentorship Is Crucial to Success
There’s a reason (or, at least, one of many reasons) why so many startups apply to startup accelerators or attend large conferences: there’s a lot of value founded in connecting with industry experts. Whether it’s hearing from serial entrepreneurs with multiple successful exits to big-time VCs, startup founders want to create the necessary networks and learn the most important lessons essentialto the success of their companies.
According to Heiblim, startups and entrepreneurs are often initially resource- and information-poor. Mentors can help provide them with insight on past experiences and fill-in those knowledge gaps, as well as introduce them to others that can fill-in additional blanks and provide even more support. “Mentors can help founders look at a problem from a different perspective[…]many times, a mentor has dealt with a similar challenge in the past,” added Borchardt.
Additionally, entrepreneurs often go into business with a limited set of specialized skills. Having a mentor can help fill-in those missing gaps, as well:
“Startup founders often go into a new venture with experience in one particular area – like engineering or product design – but don’t have extensive experience in other critical area such as finance or marketing,” said Sabbah. “Having the ability to obtain guidance from a mentor, particularly at no cost, has great value to them.”
Many Issues Can Be Prevented with Mentor Help
According to Heiblim, Sabbah, Borchardt, and Stepancich, a variety of issues can be prevented if more entrepreneurs actively tried to find mentors.
Heiblim: “Things like pricing are often way of-base due to lack of insight as to what materials or manufacturing may cost, or what the costs of the distribution channels may be. How much to budget and how long things take are important to know even if this becomes daunting. While the idea of a startup or entrepreneur may be to damn reality and full speed ahead it is always good to have some facts. This disconnect is the reason, for example, why so many Kickstarter projects fall way behind or fail to deliver as promised.”
Sabbah: “In principle, the overall rate of startup failures would go down [if more founders looked for mentors]. If only because that one critical mistake – be it finance, cashflow, marketing, or distribution – might be avoided by hearing about some best practices which are not intuitive or part of the founder’s knowledge base.”
Borchardt: “The number one thing that kills a startup is running out of cash. Having an experienced mentor that can help you with your financial projections is extremely valuable. What are reasonable revenue projections and what resources will it take to achieve those projections? What is the proper pricing model/margins? Are COGS [cost of goods sold] estimated correctly?”
Stepancich: “Well, a lot quite frankly. Like most of us, we know what we know and don’t know, and can therefore ask the proper questions for filling in the gap on what it is that we don’t know. However, it’s more difficult to determine ALL that we don’t know since we don’t know the right questions to ask. For example, I’ve had entrepreneurs talk about their ideas with 3rd-parties without taking steps to protect their IP. With respect to consumer electronics, I hear how much of a product that the entrepreneur is going to sell and how much revenue they’re going to generate without considering the negative effect of returns and allowances.”
Joining the CTA Mentor Program
Heiblim, Sabbah, Borchardt, and Stepancich all are mentors in the CTA Mentor Program, a free benefit available to all members in CTA. According to Stepancich, the greatest benefit for entrepreneurs is access to various mentors with diverse experiences – all willing to meet and talk with them at no charge:
“It’s like having an experienced guide to help you navigate what could be treacherous waters. If I were traveling to a foreign country, I would certainly seek out someone who’s been there before who can share their experiences – both positive and negative. In much the same way, a CTA mentor can provide the entrepreneur a guide on what to do and what not to do.”
For several mentors, they’ve seen a great amount of success from their mentees in the program. Heiblim, for instance, noted:
“More than one of my mentees has seen sales growth multiply their sales. One in particular with whom I have maintained a relationship has grown from under $1 million to well over $5 million in sales in a few years. Another entered a new technical space a few years ago, and it has now become the revenue driver for their company – a decision we helped make together.”
You can learn more about the CTA Mentor Program here and sign-up to meet with a mentor.
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