Originally published on Devex.com by Catherine Cheney
Since the launch of Y Combinator, which wrapped up its Demo Days Wednesday, there have been many iterations accelerator and incubator models.
Given the growing acknowledgement that global entrepreneurship is essential for global development, and the role that accelerators are playing in helping founders all over the world to scale their startups, the global development community is likely to invest more heavily in those programs, which often have a mentorship component.
While efforts are underway to determine the effectiveness of accelerators, and best practices are emerging, it is becoming clear that the key to good mentorship is the depth of the relationship.
The best relationships are those that continue
Bob Macdonald, a technical program manager at Google, watched, nodded and applauded with other members of the audience as each of the entrepreneurs stepped into and out of the spotlight at the investor showcase hosted by the Global Social Benefit Institute last week. But his face really lit up when a man stepped on the stage to talk about his software technology company that aims to turn farmers into entrepreneurs. Macdonald, who has been a mentor with this accelerator based at the Miller Center for Social Entrepreneurship at Santa Clara University for the past 10 years, has spent the past eight months working with Farmerline cofounder and CEO Alloysius Attah.
Over the past decade, GSBI has developed a litmus test for mentoring chemistry. The program seeks mentors with strong business and operational experience who will maximize what amounts to 300 hours of individualized support per entrepreneur over the course of 10 months. The best mentors, according to GSBI program staff, strike the right balance of challenging and encouraging entrepreneurs. They are humble and respectful and active listeners. They work with entrepreneurs to find the right answers rather than thinking they have all the answers.
The most effective mentors become trusted advisors, and Macdonald has evolved into that role for GSBI entrepreneurs from years past, providing an example of why the best mentoring relationships are those that continue.
“The GSBI leadership look for matches where this company could really use help, in driving sales or in expanding their supply chain or in figuring out distribution, and try to make those assignments in a way that the two mentors working with the entrepreneur bring complementary backgrounds to the table,” Macdonald told Devex. His work with Farmerline builds on his experience mentoring entrepreneurs with businesses that are either headquartered in Ghana or using phones to make transactions more efficient.
“A good mentor is somebody that knows how to listen and to give advice, based on his or her experience, when it’s applicable,” Aldo Aguirre, who directs Techstars startup programs in Latin America, the United States and Canada, told Devex via email. “A good mentor makes sure that they understand what the entrepreneur is trying to accomplish, and that his or her actions and plans are consistent and congruent and will help them get to the point they want to.”
The value of a serial entrepreneur
Whereas some accelerators tend to see inherent value in mentors who have worked with big companies, what matters more is how the experiences mentors have might add value for these startups, said Sonali Mehta-Rao, co-founder of the India-based mobile phone solutions and services company Awaaz.De. Plus, some accelerators will list big name mentors without any guarantees that they will make themselves available to entrepreneurs in the program, she said.
“The archetype we look for in a mentor is a serial entrepreneur, someone who has done it over and over again, and from a high level can provide guidance and strategy,” said Will Butler, who oversees mentorship at the Unreasonable Institute, an international accelerator headquartered in Boulder, Colorado. “They may also have domain expertise, like scaling a clean energy company, but in general these are people who know how to launch businesses and have done it time and time again.”
At the center of any strong mentoring relationship is empathy, Butler said, also emphasizing what a change it makes when mentors see their role not only as giving, but also gaining, from a relationship that evolves into a real partnership.
“I see the relationship more as a two way dialogue and learning between two mission-aligned human beings passionate about bringing positive change to the world and learning from each other,” Radhika Shah, co-founder of Stanford Angels and Entrepreneurs, said of her mentoring relationships.
A common line among emerging market entrepreneurs is that mentorship is more valuable than money. But Vava Angwenyi, founder and “chief coffaholic” at Vava Coffee in Kenya, who said she appreciates any offers of mentorship, also explained that she has limited time and bandwidth and can only pursue those mentoring relationships that can help her get what she really needs. At this point that is funding.
The pitch is only a small part of it
Mentorship networks are demonstrating their value in helping young professionals in developing countries realize their full potential, what emerging market entrepreneurs often seek in mentorship driven accelerators is help turning connections into capital.
“It’s all about building and growing great businesses that solve real problems, generate and recuperate value,” said Techstars’ Aguirre. “The pitch is just a small part of it. It’s learning how to adequately share what your business is, how it does it, and why it’s a great opportunity for investors and others to join them somehow.”
The GSBI curriculum, which guides mentors and entrepreneurs through modules of the program, outlines how startups should ask for funding. The pitch has to make sense in terms of the type and amount of capital being sought and the ask must be justified by a financial model and growth plan. And over time those guidelines have evolved into encouraging entrepreneurs to ask for the appropriate capital to meet the needs based on the stage of their startups.
“We are guiding them to ask for the appropriate capital for where their business is, and not just throwing equity out there when they have the chance of getting equity or talking about a grant when they really should be looking for debt capital,” John Kohler, the director of impact capital at the Miller Center for Social Entrepreneurship, told Devex.
One of the investors in the audience last week was Michael MacHarg, who serves as senior advisor to the social ventures team at the global humanitarian agency Mercy Corps, which is part of a coalition of more than 45 NGOs engaging in or exploring impact investing. MacHarg explained that while some people tend to dismiss grants as gifts rather than investments, grants that go into organizations that will eventually be sustainable are what he calls high performing grants.
While Kohler emphasizes that all kinds of funding, including grants, are investments in a social enterprise, he wants organizations to look to grants, and consider NGOs as partners, in order to scale to the point where they can build an earned income side of what they do to in order to be sustainable.
Going beyond constructive criticism
A week before the investor showcase, Michael Lwin, the co founder of Koe Koe Tech, a social enterprise that creates websites and applications for the health sector in Myanmar, met with his mentors to go over his presentation on the maymay app, which provides information on maternal and child health.
His mentors made the most of every minute. They did not let a single bullet nor slide go by without commenting on ways to improve upon them, even if that meant removing them entirely, as Lwin made live edits. Throughout the meeting, they pulled out their iPhone calculator apps, or scribbled in their notepads. They emphasized the importance of sequencing, moving from the problem to the theory of change to the opportunity. They eliminated distractions and emphasized differentiators.
“For lack of a better term the communication culture in and around Silicon Valley is fairly unique,”Jeff Miller, who started as a GSBI mentor then gave the university $25 million to support its efforts to apply innovation and entrepreneurship to global development challenges, told Devex. “It is very direct and it is not necessarily for the faint of heart.”
Leading up to the investor showcase, Miller sat in on the business model review, mock investor presentation, and operations review for Koe Koe Tech, where he drew on a communications style he developed in his time at Intel: “constructive confrontation.”
“We would ask Michael a straightforward question and get about a ten minute answer,” he said, about Koe Koe Tech’s Lwin. “I told Michael, ‘One of your issues is you know too much. You’re too smart.’ He looked at me like, ‘How are those bad things?’ I said, ‘We can’t take it all in. Tell me what I need to know at a high level. I don’t have enough context to handle all the detail. But you need to make me understand it in one or two sentences.’”
“I just got steamrolled,” Lwin told Devex, laughing as he reflected on the model of mentorship that prepared him for his presentation at the investor showcase. “But for me that is the value. Don’t be nice. I have friends who can be nice to me.”
The strategy worked. Following Lwin’s presentation, Devex caught up with Tim Morgan, an impact investor with TriLinc Global in Manhattan Beach, California, whose immediate takeaway was that he was impressed with how the global entrepreneurs had learned to speak the language that Silicon Valley investors are used to hearing.
In a recent report on best practices in startup acceleration, Village Capital executive director Ross Baird advised entrepreneurs to ask accelerators who their mentors are and what they will be doing rather than taking their word on mentorship being central to their programs.
“We are not seeing the expected relationships between time spent with mentors and program outcomes,” he wrote. “If I had to place a bet on where this research will go in the future, I would say that who we recruit is extremely important, and that entrepreneurs will want to know how we plan to expand their networks during our programs.”