Tips to Help First-time Entrepreneurs Develop a Relationship with a Mentor

Young entrepreneurs often think that mentors want to work with them because their idea is so awesome, so compelling that they just want to be associated with the next Mark Zuckerberg.  Guess what?  The best technology or idea doesn’t win and the odds of your idea being the next Facebook are infinitely small.  I will not speak for all mentors but I advise startups because I just love working with entrepreneurs.  I like their energy and passion.  I enjoy helping them develop a sustainable business model.  In the best cases it is like that puzzle you can’t put down until you solve it.

I meet with a lot of entrepreneurs, and because of imagemy background in software and affiliation with the University of Michigan, many of these entrepreneurs are students or quite young.  (For all you entrepreneurs out there - it is a great idea for you to have an experienced mentor or advisor to talk to about your startup.  See graphic on the right from the Startup Genome Report.)  

I fully appreciate that I am not Brad Feld or Fred Wilson, but many, certainly in Southeast Michigan, still seek out my advise on startups.  Getting that first meeting …and getting a second one is, to me, about being respectful in your interactions.  Mentors tolerate weak strategy, poor business models, etc. but if you remain coach-able and respectful you can develop a relationship. So here are some tips to help you show respect to a potential mentor/advisor.
 
Respect…
…your mentor’s time.
My time is valuable.  (Especially to me.)  If you schedule to meet with a mentor, show up.   Sounds obvious but I had 3 cases in 4 weeks.  This includes phone calls too.  I just blocked out time on my calendar that someone else could have actually used.  If I show up to a coffee shop and you don’t, it’s going to be a long time before we meet again.

Be on time.  I know everyone runs late.  I certainly have, but I pick places to meet that I know have wifi so you can let me know you are running late.  (P.S. 5 minutes is late. 15 minutes is disrespectful.)

Do some homework.  If I can name five companies doing exactly what you are pitching and you can’t, not cool.  Google it.  It’s not that hard.  I would also do your homework on your mentor.  You can find out a lot about me from my bio on this blog, my LinkedIn profile, my Tech Transfer bio, and a Google search.  A quick review would tell you that I am not the one to offer advise on the best regulatory path for your biologic.  You can also use you research to make a personal connection to you mentor.  A quick search for me will tell you I like beer, homebrewing, BBQ, and the Kansas City Chiefs.  If we have any of those in common, that is a great connection.

Know what you want to talk about.  Have a plan/agenda.  Good agendas include (but are not limited to): help figuring out how you can make money off your idea, help figuring out how to develop the technology, developing a team, etc.  Your plan should NOT be to pitch me a bunch of poorly thought through ideas until you get to one I think is interesting or “just getting to know me.”

If something changes don’t just keep the appointment.  I have been working with a startup (that is tackling a big problem) that had scheduled to meet me.  They sent me this message more than 24 hours before saying:

… We don’t want to waste your time and we realized that we need to have a group talk first.  Can we reschedule with you once we have a better grasp on our goals and timeline?


Hell yes.  Thanks for not wasting my time.  If all you did was postpone, this would be different.  In this case the team is very coach-able and respectful of my time.

Your mentor has a busy schedule.  My student mentees seem to work on a different time scale.  In most cases you cannot book my time later this week.  If you wanted tomorrow at 1:00, you should have asked (at least) 3 weeks ago.

..your mentor’s communication channels
If someone gave you my cell number (I’ll shoot the bastard) don’t text me as your first correspondence.  How the f*ck am I supposed to know who you are? Especially when you didn’t even give me your name. (This was not a U-M student for all you wolverines out there.)

 image

Totally not cool.


…you mentor’s contacts
Yes.  I know a lot of venture capitalists, angel investors and entrepreneurs.  I value my contacts.  I’ve worked hard to develop those relationships.  I’m not going to give them to you because you ask.  I will not just introduce you.  By default, my introduction is an endorsement of your product/idea my.  The bar is high there so don’t get you hopes up.  I see hundreds of ideas in a year.  Investors know that and since I don’t pass them all along any connection/introduction becomes a qualifier.

If I offer a connection and you accept, follow up quickly.  It looks bad if I make an email introduction or I introduce you in person and you say you will get them some documentation and drop the ball.  You make me look bad.  If you are not ready to talk to that person, tell you mentor “I would love an introduction to Ms. Big, but at this point I need to do X before talking to her.  Can I contact you next week when I will be ready for the introduction?”

I know this might be an obvious blog post, especially for experienced entrepreneurs.  But given my personal experience as a mentor, I found that not all first-time or student entrepreneurs know how to engage with a mentor.

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"Experienced Management Team"

First let me say that I DO NOT subscribe to the “you-have-have been-a-CEO-to-be-a-CEO” model you often hear from venture capitalist. I find it utterly ridiculous and if that were the case the pool of CEO candidates would get infinitely smaller. However, when I read the “experienced team” slide in a pitch deck or the management section of a business plan and no team members have no real experience you’ve lost my attention. Don’t embarrass yourself and loose credibility. I understand the MBAs see the pitch deck template and it says “Experience Management Team slide” and think, “Oh, I got into a good MBA program, that is definitely me.” Focus on what you do have and need regarding technical and business talent. If you have neither you need to create a team that does.

I know, everyone thinks the inexperienced label does not belong to them, but think twice before labeling yourself an “experienced Management team” or “fundable team” if any of the following statements are true:

  • If you have never worked in the industry you are trying to enter. 
  • If you don’t have deep contacts in your industry (preferably decision-makers that will take your call.)
  • If you to make the claim of experienced entrepreneur and you are counting your childhood paper route.
  • If you have never worked in a startup (or company with less than 50 people)
  • If your management experience includes an undergraduate (or graduate) club/organization.
  • If you are claiming technical knowledge because of an undergraduate degree you have yet to complete. (Software can be the exception, medical devices however, cannot.)
  • If you claim to be fundable but have no connections to the angel/venture community.


Gain some credibility and state that you are a scrappy young team and you know your deficits. “We have little experience but we are going to leverage mentorship from Ms. Entrepreneur who is willing to help us…” or “we are looking to add talent to the team…” or “our advisory board is made up of…”

Remember, investors would rather invest in an A team with a B idea than a B team with an A idea.

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Rant: Entrepreneurial Entitlement

I have read 3 business plans in the last month-and-a-half that have the entrepreneur’s compensating themselves nicely.  Two plans had $250k or more shared between two founders.  (To top that off one of the plans was to raise more money in about a year.) Seriously?  WTF?  You are an entrepreneur not an employee of your funder!  Be honest, you might as well change your pitch from a business to what it really is, a philanthropy to cover your boat payments.   As you guessed, this angers me a bit.  It has less to do with founders being compensated, I’m OK with entrepreneurs taking salary if the modifiers “minimal”, “nominal” or maybe even “no” come before salary, and more to do with what I call entrepreneurial entitlement.  Entrepreneurial entitlement is when the entrepreneur thinks he/she deserves perks and high salary.  It leaves to me worry about how effectively you spend your company’s resources. When I see founders nicely compensated in business plans I interpret that as “I’m going to take your money and drive this company into the dirt.”  If you want to drive a company off the cliff while pulling in a nice salary, look at a career on Wall Street, or closer to my home, the auto industry (although right now they really aren’t hiring. :-) )  I also question whether the entrepreneur thinks the company is going to be successful when they demand money now.

It is not the spending but the mentality that scares me more.

If you are starting a business, and you need to be compensated, I want to see just enough to keep their attention from being diverted from the startup.  What is the minimum you need to cover the mortgage and keep the power on?  Simple equation: think about what the average market rate for someone like you, now cut it in half.  (Some argue in half again.) Or maybe think of it this way.  From my talks with many successful founders, I would guess that the starting salary is $30-50k.  The MIMINUM you can live off of.  But consider this: What could you company do with the extra $20k?  Could you hire another person part-time or a contactor with that?

The other case of entrepreneurial entitlement was something along the lines of “once we get revenue the company will lease a sedan for the founder.”  You car worked fine up to that point, what changed?

Enjoy your Top Ramen® now and oysters and caviar when you cash out.  

Other Links:

http://venturehacks.com/articles/ordinary-people

http://www.feld.com/wp/archives/2006/06/giving-up-salary-for-equity-after-vc-funding.html

http://onstartups.com/tabid/3339/bid/164/Startup-Founder-Compensation-The-Good-The-Bad-and-The-Irrelevant.aspx

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"Are they going to steal my idea?"

Because I work with early-stage startups and students I get this a lot.  Whether it is searching for venture capital or talking to a mentor/advisor/consultant everyone seems to be worried that someone will steal their idea and run with it.  Here is a reposting of my resopone on the University of Michigan's entrepreneurial Ning site.

Are they going to steal my idea?

Posted by
Matthew Russell on July 14, 2009 at 3:18pm

I came up with this brilliant idea, and I want to discuss it with a mentor, but I am afraid they might steal it. Do I need to get a non disclosure agreement? Should I even discuss the idea online? What about other people who aren’t mentors, should I tell them my idea?

Replies to This Discussion
Reply by Wesley Huffstutter on July 15, 2009 at 11:29am

I get this a lot and (sorry) there is no good answer. If you can talk about your idea without disclosing your “secret sauce,” go for it. Talk about your idea as a “black box”…input A and B and like magic, out pops C on the other end. However, this is often difficult in cases where the idea/market niche is what is unique (which is often the case for web 2.0 ideas.)

Generally speaking, those in the venture capital (or angel investing) community are safe. (Even though they will never sign Non-disclosure Agreements (NDA).) They have a reputation they would like to maintain and if they are branded as one who seals ideas from entrepreneurs, no one would bring them startup ideas (deals) and they could not make a living. The same can be true of mentors and consultants.

You can ask mentors to sign an NDA but don’t be shocked if they don’t. I don’t. Through my job at Tech Transfer, mentoring students and startups, advising investors, and sitting on boards and committees, I see a lot of technology. I hear lots of startup ideas. In fact, I have had two different groups pitch me the same basic idea. If I had signed an NDA, the liability would be on me to prove that I did not disclose information to the second company.

This said, good ideas turn into great ones by getting feedback from others. After all, two minds are better than one. It is too often that I see companies operate in “stealth mode" but why? It has been my experience that the reason they are in stealth mode is not that they have some ready to execute top secret plan, but rather they feel that they are not ready for the light of day, lack focus, or can’t figure out how to get to market. These are all things that would benefit from talking to someone. You might discover a flaw in your plan that would have cost you lots of money or time. So be careful about creating a product (or a company) in a vacuum. (By the way, I’m not saying you should not fly under the radar. Quite the contrary. I am, however, suggesting that an outside perspective can help you figure out if you actually have a business and may even speed your idea/technology/product to market.)

Still reluctant? What can you do? Do your homework. Find out about the people you would like to talk to. This website is a great place to start and remember, you are getting free advise.

Wes

Original link (with other comments):
http://alumnicfe.ning.com/forum/topics/are-they-going-to-steal-my

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