CBI Insights’ grim sounding 2020 report entitled 339 Startup Failure Post-Mortemsfound that 70% of upstart tech companies fail. When it comes to consumer hardware startups, 97% eventually die or “become zombies.” And what were the top three reasons for startup failure?
- No market need
- Ran out of cash
- Not the right team (lack of diversity in skills and experience)
Harry had Dumbledore, Luke had Yoda, and Daniel had Mr. Miyagi. While your startup may not be facing an imminent attack by death eaters, stormtroopers, or teenage ninjas, having the right mentor in your corner can seriously help when it comes to developing the right features, battling competitors, winning a crucial funding round, and learning new tricks along the way.
To find out just how to identify and attract the right mentors, we spoke with the manager of a startup accelerator, two startup founders, two networking organizations, and one mentor.
1. Find someone who can help you put the nail before the hammer
Ed Gaze, has been Senior Manager of Lloyd’s Lab, an accelerator for InsurTech startups created by insurance giant Lloyd’s, since its start in 2018. Having seen hundreds of startups go through the program, one mistake he commonly sees is:
“Sometimes startups come with a hammer and want to find a nail. They’ll develop a tool first and then try to find a problem to solve with it, rather than starting with a problem.”
This fundamental disconnect between startups and their customer base can lead to major product-market fit issues down the line.
The beauty of the startup-mentor relationship is that mentors can help you get into the mindset of your target audience. The ability to put your product into the hands of a potential client (and not just any client) and get their direct feedback can be the most valuable info you’ll ever get.
Michael Crawford, CEO of Describe Data, experienced this first hand during his time at Lloyd’s Lab. “We used our mentors as a product-market fit test group. We asked them what they thought about new business ideas, what they liked, how they would like to be sold to, how much they would pay, what licensing models they preferred, even down to UI preferences. They were just incredibly helpful,” he explained.
Start by taking a deep look into your ideal customer base. Develop customer personas and make sure your potential mentor fits within this category or has a deep understanding of what these personas would be looking for, based on their experience.
2. The right connections can bring more than just cash flow
If your startup is in great need of funding, even a killer pitch deck won’t be as effective at convincing investors as a personal recommendation from a well-connected mentor. Having an external stamp of approval can bring you a long way in gaining both funding and larger clients. But you should consider if that’s really what your startup needs right now.
Today access to data is gold for most startups. “The second biggest value startups gain is when mentors either help provide data or introduce the product to various people within their organization to run a proof of concept,” Ed explained.
Well-connected mentors can also be extremely helpful in connecting you to mentors in other fields, whether you’re in need of strategic growth marketing hacks or want to introduce an IoT component to your product. According to Ed:
The mentor doesn’t necessarily have to have all the answers, provided they’ve got the network within their business to find them. The ideal mentor can also be someone who’s just very good at influencing others to get involved.
3. Get you out of your comfort zone
You may find you really hit it off with a mentor that has the same experience, a similar mindset, and technical background. But selecting someone who will think the same way you do may not be what’s best for your startup.
Allyson Kapin, Founder of Women in Tech, a nonprofit which showcases women-led ventures and helps provide capital, mentoring, and direct access to leading investors, explained, “It’s important to look for someone who can be supportive but can also provide constructive feedback. A mentor should challenge assumptions when they feel their mentees are headed down the wrong path and be able to have those tough conversations.” While praise can be highly motivating, finding someone who can and will tell you what you could be doing better is invaluable. “This can be life-changing for mentees,” Kapin said.
Gerard de Vere, COO of Describe Data, explained that, when starting out, “most startups sit somewhere on a Venn diagram between being more tech or industry heavy, depending on the expertise of its founders. The first thing to do is to understand what your balance is between tech and industry. Then try and find the opposite to fit the last piece into the jigsaw puzzle.”
His co-founder Michael agreed: “Push yourself out of your comfort zone. We were kind of adopted by an external marketing mentor and an enterprise sales expert during the Lloyds lab. These were two areas we didn’t have any real experience in. Those relationships months later are still strong and they’ve been incredibly invaluable for us. Look for people outside your area of expertise because they’ll be highly critical and highly useful.”
Attracting your ideal mentor
Once you’ve found the Yoda to your Luke Skywalker, how do you convince them you’re the right mentee to take on? (Aside from carrying them through the jungle on your back of course.)
Tip one: Show your enthusiasm
“To attract interesting mentors, it’s about passion. Michael does a lot of presenting for us and he’s very passionate and very charismatic. That’s very honest and authentic and really attracts people. We’ve seen a really great technical startup that had the talent and the skills, and, if they had gotten funding, they would have gone really far. But the guy just didn’t have any charisma. At the end of the day, it’s not just the idea, the team, or the need that mentors will consider,” Gerard explained. Just like anyone else, they want to spend time on something they’re excited about.
Tip two: Drop the technical jargon
Even if your solution and what it does may seem obvious to you, it might not be to other people. Ed once saw a startup use very technical language during a midpoint review. After the founders left the room, he asked the mentors if they had any further feedback. That’s when a few admitted they honestly didn’t understand what the solution was. Always remember to translate your technical language into words your mentors will understand.
Rob McLendon, a mentor for Lloyd’s Lab, works as a Principal for Beat Capital. With a background in the insurance world, his interest in mentoring comes from a drive to learn about advancements in tech and how they can help him and his company in their day-to-day.
“The first thing I’ll consider is the practicality and the tangibility of the service or product. In the InsurTech space, there are a lot of things that are difficult to comprehend. When that happens, the practicality aspect disappears. For me, that skips over one of the problems that the insurance industry has: just doing the simple things really well,” Rob told TNW.
Tip three: Set realistic goals upfront with your mentor
Having worked with numerous female-led startups, for Allyson Kapin, the best way to get the most out of your relationship with your mentor is to set clear expectations and deliverables from the start:
What are the top short term things you want to work with your mentor on? What are the top three long term goals? Define how you will work together on these goals. Will you meet virtually once a month to discuss your progress and challenges? Will the mentee check in once a week via email on how they are doing with their mini-goals and tasks? Define all of this upfront so you set expectations from the start.
Tip four: Build long term relationships
Leslie Feinzaig, CEO of Female Founders Alliance, knows all too well about the difficulty of attracting mentors and investors when you’re just starting out. Having started her own EdTech startup, she soon realized she didn’t have the same founding experience and support that male CEOs in her industry had. In 2017, she founded the Alliance to enable female entrepreneurs to connect, share tips, and help each other develop the skills they needed to create and scale a successful startup. She suggests:
Build your network before you need it. Look for opportunities to truly connect with people that you admire or have kinship with professionally. Ask them for coffee, share opportunities, and stay in touch, professionally. Those are the relationships that over time yield the best mentorship and the best introductions.
Look at it as a two-way street
Don’t be afraid to approach a potential mentor. Keep in mind that, for mentors, especially when coming from a corporate background, the speed at which decisions can be made, and the ability to directly influence the development of a new product can bring the rush that makes mentoring worth it.
You could see this sense of excitement when Rob talked about one of the startups he mentored, Inari: “They helped us build a cutting edge data lake that brings together tons of data points to give us this enterprise-wide view of our business. I’ve just never been part of something like that. I learned a lot and we did it on time specification and on budget, which, to build a data lake, is almost unheard of.”
This post is brought to you by Lloyd's.