Seven Vital Pieces of Advice From Startup Mentors
- by Peter Cohan
Most entrepreneurs lack the know-how needed to turn their ideas into billion-dollar companies. But corporate mentors can fill that know-how gap. The most important reason that entrepreneurs need mentors is that many of them have never run a company before. They often have great product ideas but do not know how to turn that product concept into a successful business.
Below are seven ways mentors can contribute to startup success.
Startups should anticipate the future direction of its industry and position itself to prevail in that future state. Corporate mentors help startups by developing a vision for the industry, conveying it to entrepreneurs and thus helping them to connect the short-term tasks with the industry’s future in a way that helps startups succeed.
Acquisitions and Partnerships
Startups often receive requests from customers for a product or service that the startup does not provide. In response, startups may choose to build the products their customers demand or acquire a company that already has. While acquisition may enable the startup to deliver the product to the customer more quickly, acquisitions are complex, and many entrepreneurs have no experience with them. Mentors can help.
Most startups lack sufficient profit from selling products to pay all their bills. Fortunately, there are many mentors who can help entrepreneurs navigate the choppy waters of raising early capital.
Given their limited resources, startups must closely monitor how their ventures are doing. Identifying the right business parameters to measure is an important challenge. Options for the right gauges include counting the number of users, revenue per employee, progress on product timelines or cash burn rate.
Hiring and Firing
One of the most crucial decisions a startup CEO must make is whom to hire, whom to promote and whom to “manage out of the company.” Such personnel decisions can determine whether a venture climbs to the next level or gets consumed with infighting and stalls out.
The wrong culture can yield turnover and low productivity because it leads people to fight each other, to cut ethical corners or to labor lazily.
Every startup shares the goal of building a product that customers will use and ultimately pay for, but entrepreneurs often struggle with how to turn that goal into something real.
Fortunately, places like Silicon Valley are full of these experienced entrepreneurs who are willing to share their critical expertise, along with their capital. Yet so many first-time startup CEOs are currently receiving capital that the demand for corporate mentorship now vastly outstrips the supply.