This is a legitimate question. Having been in a consultant and mentor position for startups, I might not be the most objective person to talk about this. On the other hand, I am a founder who had his fair share of achievements and failures. Promise: I will do my best to offer a balanced perspective while answering this question.
1. The Founder Problem
Becoming an entrepreneur is risky… No, wait. Scratch that. I don’t believe that to be the case. I really don’t think being an entrepreneur is riskier than working at a job. It is just a different kind of risk. Anyway, back to topic; we can at least say that entrepreneurship is considered riskier. From the average point of view, it has strong associations with going against the grain, being rebellious, believing that you are right when people are telling you that you are wrong. So it takes a certain type of character.
That type of character, is not the type that usually acknowledges its shortcomings quickly. It does not ask for support (emotional or intellectual) easily. This cocky, confident, in command, extrovert, almost know-it-all type of attitude carried by the stereotypical founder is not actually entirely useless, though. It creates the reality distortion effect: If he believes in it so much, with such conviction it has a good chance of being true because although I don’t think he is right, I don’t hold my position with that much conviction.
(Also note that in some way or form, the Dunning-Kruger and reality distortion effect complement each other.)
Back to topic: Because stereotypically, entrepreneurs and startup founders share these tendencies, they are among the last to actively seek out mentors or consultants. They think they know. They think they know, until they see that they don’t. And by then, it is usually too late. This is precisely why first time vs. second time founders pay attention to different things. This is one side of the story.
Conclusion #1 : Founders are averse to being “sold to” by consultants.
What I mean to say is: I get why founders are not chasing after mentors or consultants. My observation in the London startup ecosystem has been that at other times when they have been approached by a consultant or a mentor; they are on the back foot, fearing they will be “sold to”.
2. The Mentor Problem
I say mentor, but I include consultants, as well. So the problem with these category of people (me included) is that it is hard (and sometimes almost impossible!) to tell if they are people with great wisdom and a golden touch or self-promoting critics with hit and miss tactics, who have never played the sport but love to shout from the benches.
Who is a good mentor, and who is not? How do you tell? It’s not easy but not that complicated. You have two options. You either judge with your own knowledge or look for a clue that has high signaling power.
Things with high signaling power:
- Previously mentored a high growth or exit reputable startup brand. (Think the word-of-mouth for this person being: “She worked closely with Monzo/Uber/Lime/Airbnb’s founders in the early days…”)
- Previously founded or exited a startup themselves.
- Authored and sold a well-known book.
- Created a well-known Youtube or Podcast series.
- Is affiliated with a well known and respected brand such as a VC or an Incubator. (Think: “He worked very closely with Paul Graham and he is now consulting Seedr.)
- Speaker / Presenter at a big event or a reputable organisation. (Think: He was the keynote speaker at Startup Grind London)
The other option is to judge yourself. But there is a BIG paradox with that. If you need a consultant/mentor in a specific area, it means you don’t have the experience or intellectual capital to be able to judge another person’s competence to a satisfactory certainty.
Conclusion #2.1: Signaling power can be misleading.
It is very difficult to tell if mentors are really good and can help your business grow strong, but they lack the signalling power.
Conclusion #2.2: Quality of the mentor vs. high signalling power do not correlate.
Mentors and consultants who don’t have the signalling power but are good at their jobs (can help founders tons) are under-priced.
3. The Real Role of Mentors and the Case for Why Founders Need Them
The real role of mentors is to increase the quality of decisions founders make.
With the tech world becoming more and more complex, success depends less on mindless hard work and more on actually making the right decisions. Hustle is key, but what to hustle on is more important. They are like fire & gunpowder. You need both.
I am a fan of the term quality of decisions (I think I heard the term first from the fantastic Mr. Musk around 4 years ago, but kept coming across the central idea many times over from people I respect and value the opinions of). I love it because it is broad enough to include both strategy and execution. Which means, there is still room to protect the heuristic “execution is more important than the idea”.
Good decisions will not only enable great strategy, they are also a crucial part of the execution!
To really appreciate the importance of this, consider the chances of a startup with low decision quality on issues like:
- Picking the co-founders
- If they have a satisfactory product-market-founder fit
- Hiring the early team
- Company culture and communication within the team
- Marketing strategy and channels
- Seeking investment (if or when) etc…
As a founder, you can (maybe) afford to get one or two wrong if you are doing splendid with the rest, but sooner or later if you make a pile of low quality decisions, it will catch-up to you.
Considering the immense impact these type of decisions have on the future of a startup, the cost of a mentor/consultant is a bargain. Worst case scenario, you spend 90 minutes bi-weekly to double-check your ideas and assumptions for leaps of faith and logical gaps.
Conclusion #3: A Mentor’s real job is to push for higher quality decisions.
Mentors should work to increase the quality of decisions founders make by providing them with mental models, relevant examples from their industry, their own subject matter expertise in their niche (people & culture in my case) and challenge the key assumptions the founders are building the business upon. Mentors should push for gathering more data, running more experiments and getting more feedback rather than being “gurus” with answers.
Yes! Founders need good mentors and consultants. And specifically because of these three reasons.
- Founder need neutral people in their corner who can easily challenge their assumptions, provide alternate perspectives, share market information and bring attention to roadblocks/problems before they become too big to solve easily.
- Founder need people who are Subject Matter Experts in domains they are not experts at. The need for the expertise and thus the best experts for that organisation might change from time to time from a People Expert, to a Finance Expert, to a Marketing Expert.
- Founders need people who will not only help them with difficult decisions, but people who will permanently increase their ways of thinking around a problem and making higher quality decisions.
I think if we can become more aware of the obstacles I’ve pointed out from both the founder and mentor side; we have a much better chance of benefiting from better partnerships between mentors and founders.
It’s 2019, and I believe the startup ecosystem is still just getting started. It will get bigger and better. And with time, I hope the way founders & mentors discover each other and get to work will evolve, too.
If you are curious…
My domain expertise has been people, culture and learning for the last 10+ years. Founded some startups, written some books (including Startups Grow With People: How to Pick Partners, Recruit the Top Talent and Build a Company Culture). Also acted as a consultant for some great companies. Now I’m running CommonWisdom and building some side projects such as StartupsofLondon
All the other stuff I made over the years is at ozandagdeviren.com