It occurred to me recently that although I have hundreds of posts about mentoring startups, nowhere have I elucidated my philosophy and practice of mentoring! That’s the purpose of this page. Please note there are a lot of links to other Mentorphile posts, I suggest you follow them. If you don’t you will miss a lot of what I have written about mentoring. Links to people and organizations are not critical in understanding of my philosophy and practice of mentoring and so may be followed at the reader’s option.
Entrepreneurship guru Steve Blank has a great taxonomy of advising, coaching, teaching, and mentoring in his YouTube video on human resources, so I’d like to start there:
If you want to learn a specific subject you find a teacher or take a class.
If you want to hone specific skills or reach an exact goal, hire a coach.
If you want to get smarter and better over your career, find someone who cares about you enough to be a mentor.
What do I actually do as a mentor?
It’s not been easy transitioning from the role of entrepreneur, where I set the vision and goals for the venture and then helped the team succeed in reaching those goals, to becoming a mentor. I can’t set the vision for the venture – that’s the founder’s job. But what I can do is to help them articulate it. Often they do need that help and I like to start there. The business model canvas can be a useful tool, though I find it isn’t widely used at the MIT Venture Mentoring Service. The approach I use to further my understanding of the venture is based on the questions asked by journalists: Who? What? Where? Why? When? Where? and How? I find I can get more depth by pursuing these questions in person than by asking the founder to fill out a business model canvas.
It’s important to distinguish between career mentoring, which usually takes place in a corporations where senior executives selectively mentor up and comers, often in an ad hoc manner, from the mentoring of entrepreneurs, which is my focus and the focus of this blog. Occasionally the two overlap, when it appears that the would-be entrepreneur would really be more successful working for someone else.
The bottom line is to help the founder succeed. This can and has been different than helping the venture succeed. Team members come and go, but so long as the MIT-affiliated founder is still with the venture they are eligible for mentoring from VMS. There are a variety of outcomes from mentoring: a founder may be build a sustainable business, sell their app, even realize that their idea just doesn’t have commercial potential, or that they aren’t “cut out” to be an entrepreneur. For more detail on what mentors do read the post Mentors are a must!.
How I’ve learned about mentoring
I’ve learned 90% of what I know about mentoring from my nine years at MIT’s Venture Mentoring Service, the balance has come from MIT’s Sandbox Innovation Fund, The Social Innovation Forum, serving on the advisory boards of some startup companies, and informally mentoring friends and acquaintances. So a lot of what I have to say relates to VMS. It’s worth checking out their web site if you haven’t already.
I usually define the practice of mentoring as providing advice, guidance and feedback to entrepreneurs. My mentoring is based upon my direct experience starting four-venture backed companies, two self-financed companies, two angel financed companies, and a few startups that didn’t even get to the launchpad, let alone off of it.
In addition I read the technology press widely and deeply, from The Wall Street Journal (unsurpassed in my opinion), to The New York Times business section, to blogs specifically about startups and mentoring, like Steve Blank’s. I use an app on my phone and iPad called FlipBoard, which is a news aggregator and helps me not only keep up with the startup world, but often surfaces stories about mentors. I find TechCrunch to be one of the best news sources on the Web for keeping up with newly funding companies and general tech news. Frankly there is far more to read, including books and video, than I could possibly have time for in ten lifetimes. Another source of secondary information about mentoring are my Google alerts, though I’ve had to fine tune them otherwise I’m inundated with news about career mentoring or the mentoring of underprivileged children.
Another source is observation: I’ve been very curious about startups and how they operate since joining an early stage company almost forty years ago, Software Arts. Software Arts was post-launch, generating revenue, but only had a dozen employees. I learned a lot about what to do, and equally importantly, what not do, to successfully grow a startup in my four years there.
And finally I’ve had a number of great mentors in my life – I can’t call it a career, since I’ve had several. Readers of this blog will find Jim Cox, my first swim coach who went beyond the call of simply coaching; to Terry Hanley, who taught me that there’s generally one right way to do things and you need to take the time and effort to find it; to Sigrid Reddy, who lead by example; to the Wayne Oler, from who I learned the value of the Socratic method; to Roger Heinen, a member of our advisory board at Mainspring and former Executive Vice President at Microsoft and Senior Vice President at Apple. Being an ornery anti-authoritarian, it is only these people, with Wayne and Roger foremost among them that I could have ever worked for. In addition, thanks to the Venture Mentoring Service’s team mentoring approach I’ve learned a lot about mentoring from my many mentoring team mates over the years.
The importance of intention
But it was Bill Warner, founder of Avid Technology, who taught me about the value of intention and how important it is for a mentor to understand the individual intentions of a venture’s founders and to see that those intentions are aligned. I start every first meeting by asking the founder or founders what are their intentions for their venture. Do they want to license their technology and let other companies worry about marketing sales and support, and enjoy a royalty revenue stream? Or would they like to exchange the value they have created in their product for a slug of cash immediately by selling their product? Do they intend to build a company, but sell it as soon as they can find a suitable acquirer? Or finally, as was the case with the founders of Software Arts, do they intend to build a sustainable organization – a venture that will last? Tied in to the intentions of the founders is their desire for social impact. One of my ventures is so focused on social impact that they are seeking non-profit status, tax code 501 (c) 3. The benefit of which is that IRS classification is that donations to companies with Federal non-profit status are tax deductible.
Intention is a key determinant of what type of legal business entity founders want to create. Fortunately for me and wisely for entrepreneurs, VMS has legal office hours. The MIT Sandbox Fund has a relationship with the Boston University Law Clinic. But I do explain briefly to mentors what the options are, ranging from a sole proprietorship to a C-corporation, incorporated in Delaware due to it’s favorable incorporation statutes. If the founders want to raise capital their only choice as a for-profit is the C-Corp, virtually demanded by all angels and venture capitalists. There is one other option, the B-Corp or Beneficial Corporation. The best example of a B-Corp that I know of is Etsy.
Learning the founder(s)’s intentions is not a one-time thing. Often intentions change over the life cycle of the startup. Founders with social impact intentions originally may later decide they want to cash out, perhaps to return to academia or their previous profession.
One of the key steps in flushing out founder intentions is a founder’s agreement. I often find founders to be resistant or more accurately, averse, to a founders agreement. Dividing up equity can be a very sensitive subject, especially within an academic team where one founder may have graduated and is working on the venture full time while another is still in school and is by necessity only working part time.
The importance of origin stories
There are two reasons origin stories – the stories of when, why and how the venture came to life – one, it helps the mentor to understand the founders and their motivations, and two, people are wired for stories. A good origin story can be the core of a presentation. A good origin story can become part of a venture’s culture, business myth as it were.
Assigning founders deliverables by the next mentor meeting is a very effective tool that MIT VMS has developed. I always help insure the mentor team works out an assignment with the founder(s). VMS wisely takes a very short term view with its mentoring. The focus is on helping founders set goals and reach them in days or weeks, not months. One thing I would like to see VMS and/or Sandbox do is to expose founders to the Key Performance Indicators – KPI system – developed at Intel. However, I think this may be a bit too formal for MIT culture.
There are certain instances of mentoring where I feel I need to be quite directive. For example, if a venture has invented something that could be patented I refer them to the VMS legal office hours of the BU Law Clinic. Or if they haven’t executed a founders agreement I tend to push them to do that as soon as possible. I will discourage most startups from having a Chief Operating Officer. That tends to be unnecessary overhead in a startup. I’m usually directive about operational issues. But I can also push when I see that a venture is either ignoring a customer acquisition strategy or not computing the true cost of acquiring customers. Given the team mentoring approach at MIT it’s important that all members of the team agree before issuing directives to the venture.
The Socratic method
Rather than be directive I tend to ask questions. This is especially effective in a team mentoring situation because I don’t need buy-in from other team members before asking a question, unlike issuing directions. Follow-on questions are just as important as initial questions and often another mentor will ask the follow on, which is helpful. Different answers from the founders can be a sign that intentions are not aligned.
When you have a hammer you tend to go out in search of nails
This seems like Entrepreneurship 101, right? Unfortunately not. In fact the majority of ventures I see tend to be product-centric, not customer or market-centric. Not totally surprising given MIT is an engineering/science-driven institute. But I find I spend a lot of time helping founders determine their market segment and what the value proposition is to their customers. Another common problem is failure to perform a comprehensive competitive scan. It can surprise a founder when you perform a Google search during a mentoring session and quickly finder a competitor they were not aware of.
Draw me a picture
This is a technique I developed last summer when I was co-mentoring teams in biotech. I have no background in the life sciences and it’s not an area that particularly interests me, so I rarely sign up for biotech ventures. However, MIT Sandbox, unlike VMS, assigns teams to mentors, there’s no choice in the matter. Last summer I was assigned two or three biotech or medical device ventures. During the discussion with one venture in particular I realized that one of the founders was failing to clearly describe what her company actually did. It was a quite complicated and involved process. This was a problem for me. But problems can be the mother of invention, so it dawned on me that technical, engineering or scientific processes shouldn’t be solely described in words, they should also be diagrammed. Virtually every conference room at MIT either has a whiteboard or has walls painted to be used as white boards. So I asked one of the founders she could please diagram the processes she was talking about. She virtually leapt from her chair, grabbed a marker and proceeded to diagram and talk us through the process while she drew. It was one of the best explications of a technical process I’ve ever witnessed. A flow chart was truly worth a thousand words. I knew this was a worthwhile exercise then the founder took out her phone and took a picture of the whiteboard before she left the room. For a great demonstration of the power of live diagramming versus simply presenting an existing diagram, check out my post How to do a great presentation without a computer or any electronic devices.
What keeps you up at night?
I never fail to ask this question. If I get the response, “nothing I sleep like a rock” is really the only time I worry. Because founders should be worried. Building a company is just brutal work and there’s always something going wrong whether it’s a key member of the team driving everyone else crazy, a competitor intent on killing off your startup, or the impending abyss of not being able to meet payroll. But for the sake of your sanity as a founder you can’t worry about everything. You need to worry about the things no one else is worrying about. A key part of my philosophy of mentoring is that I see valuable parables, models and stories from the world of sports – pro football in particular. Their are two common traits of outstanding of great football players which they tend to repeat to every sports writer: they don’t worry about what they don’t control and their goal is to get better every day. And getting better at their job every day isn’t confined to just players. Hall of Fame coach Bill Parcells first thought upon awakening every morning was, “What can I do today to make my team better?”
I encourage the founders I mentor to emulate this model and by asking what keeps you up at night I can find if they are worried about everything, which will wear out themselves or their team or if they know just what to worry about. And if they aren’t familiar with the Japanese term kaizen, I introduce them to the concept of continuously improving all facets of their venture and involving every member of the team in that process of continuous improvement.
The bottom line
I don’t spend a lot of time reviewing financials. What I tend to look at or push for are metrics: customer revenue/cost of customer acquisition, churn rates, how long should a capital raise last, and the number of interviews recommended for the customer discovery process. There are a large number of these heuristics.
For companies that are ambitious and whose goal is high growth, there are important numbers relating to the size of the market, its growth rate, total addressable market, competitor’s market share and so forth.
The nature of mentoring and when domain-specific expertise is needed
Mentoring is by its nature a reactive process. We have limited choice of our mentees. The mentees set the agenda, not us. Typically mentees set the meeting schedule with VMS – it’s on demand mentoring. Sandbox is more calendar-driven as it needs to fit into the students’ academic schedule. We may see a venture at almost any stage, though concept stage tends to dominate the ventures I see. The major issue I run into is general startup knowledge versus domain specific knowledge. At least three times I’ve mentored with post-doctoral fellow. I find that I completely lack the background and education to keep up with other mentors with domain specific knowledge in biotech and related areas. I also find that post-docs tend to be looking at entrepreneurship as a consolation prize for those unable to secure faculty or full time researcher status. Their level of enthusiasm for startups tend to be much lower than the VMS and Sandbox founders. After three tries I’ve decided to constrain my mentoring to VMS and Sandbox and within those programs to avoid biotech or other ventures requiring deep technical knowledge. I also find that the further along the venture is in its lifecycle the more domain-specific knowledge is required. Being a true generalist with virtually no domain specific knowledge outside of higher education technology my greatest added value is in two areas: mentoring very early stage companies and pitch scrubbing and preparing ventures to raise money.
I do have some specific areas of business expertise including recruiting, raising capital, and mergers and acquisitions and know a little about a lot of things. As Samuel Johnson said, Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information upon it. As a former librarian who is not an engineer, scientist, sales person, marketeer or finance expert my knowledge is of the latter kind.
Oddly enough I do find my undergraduate studies in social psychology to be of help in group dynamics of team mentoring and working with teams of founders. You never know what parts of your background may be applicable. I’m planning on a post on why journeyman athletes make much better coaches than all-stars and I’m certainly in the journeyman category.
What’s in it for mentors
Mentoring is an educational process, not just for founders but also for the mentors. I’ve learned a great deal about mentoring and about technology from those of the roughly 160 VMS mentors I’ve had the privilege of working with. And it is a privilege to work with the very bright, creative, and ambitious founders at MIT. Like a coach, who once played the game, but now paces the sideline I take great satisfaction in the successes of my mentees. And my role as a mentor enables me to help fulfill my purpose in life: to gain my satisfaction from helping others. And it’s been satisfying to recruit new mentors for the MIT Venture Mentoring Service. I only hope they enjoy mentoring as much as I do.