Entrepreneur Insight

Why Entrepreneurs Need to Seek Mentors in Their Industry

Finding a mentor slightly ahead of you can speed up your learning curve.

Last summer, entrepreneur Dan Miller started meeting with his new mentor, Sean Duffy, CEO and co-founder of Omada Health, to discuss how he could increase sales in his startup, Level Therapy, a San Francisco-based mobile platform, which provides treatment tools and video access to licensed therapists via their phones.

Miller sought out Duffy because in addition to having raised over $75 million in capital, the CEO was successful in running the four-year-old healthcare company. The advice Duffy gave Miller was not only relevant, but also helped him save time in finding the right approach to attract new customers.

“Since both our companies sell products to employers, Duffy was very helpful in sharing what has worked and what has failed in the process of selling to benefits managers,” said Miller. “Omada has a good process and system, and Sean has been helpful in educating me on how we can reach that phase and think more strategically.”

Dan Miller, the CEO of Level Therapy

" If we had to find our own approach online and test it out, ultimately we would have found it after wasting a lot of time and money, and losing potential revenue from clients."

- Dan Miller

How mentors speed up the learning curve

Entrepreneurs who work with mentors in their industry who are a few steps ahead of them in the startup process can often provide business advice and strategies, which are more pertinent and timely. Whether it is a founder who started their company six months or five years earlier, hearing about their trial-and-error process can help budding entrepreneurs reach their next stage more efficiently.

Mentors who are six months to one year ahead of founders tend to offer the “most applicable advice.” Why? Because their feedback can be utilized quickly with customers or employees, said Miller.

The mentoring and advice from Duffy sped up the learning curve for Level Therapy, which is crucial since companies often receive only “one shot” from their potential clients.

“We know their time is precious, so we don't want to take advantage of it,” Miller said. “If we had to find our own approach online and test it out, ultimately we would have found it after wasting a lot of time and money, and losing potential revenue from clients.”

Traditionally, many small business owners have sought out mentors who have been in the business for a decade or longer. While their advice is helpful, it can also be outdated and not as applicable, as business cycles and trends have evolved.

Leveraging the success of other entrepreneurs, who can advise them of potential roadblocks, or give them a sense of what is coming down the pipeline, is beneficial to early stage companies who can use the advice to improve their business strategy.

Why different types of mentors are helpful

Mentors who have been working in the industry for two-to-five years can provide longer term, strategic feedback, Miller said.

“Although their advice may not be applied immediately, it serves as advice that helps the recipient think strategically about their business—a skill that is imperative to keeping competitors at bay,” he said.

An experienced mentor who has the same background and experience can provide resources and the “right advice on what to do with your startup,” said Paul O’Brien, founder of MediaTech Ventures, an Austin, Texas-based company focused on the economic development of innovation in media.

“You need someone who has some battle scars,” he said. “They can provide some value because they made it through and figured things out.”

How to find mentors

An internship last year led Waseem Shabout, a co-founder and partner at Jinn Tech, a Boston-based startup which consults and codes for other startups, to his mentor, Bruce Parker, CEO and founder of ModoPayments, a payments provider in Richardson, Texas.

The 20-year-old sophomore at Babson College majoring in business and technology learned some invaluable skills from working with Parker that are not always easily conveyed from a book or online course. The mentor’s hands-on approach to his employees—learning all of their first names, making them feel more like team members and eating lunch with them often— helped Shabout determine how he wants to “operate as a leader.”

“I respected the way he interacted with everyone and how it was never about the product,” he said. “Your number one resource, especially if you are a startup, is your employees. He was very motivating and not managing things from afar.”

When an independent contractor is in the Boston area, Shabout prioritizes meeting with them. He sets aside time to have coffee or a meal, too, since telecommuting can make it harder for an employee to feel like they are part of a team.

“I want them to feel like they are part of the company and that we value them,” he said. “I adopted the same team philosophy that Modo has. I want contractors to get to know me and not be scared to reach out to me if there is a problem.”

How mentorship encourages innovation

Adopting less of a strict corporate structure for tech startups is vital because it allows a company to be more innovative, said Shabout. As his own startup moves forward in defining its brand and company culture, he recounts his time with ModoPayments to “embody that same culture and value within my own organization.” Shabout shared, “I don't think I would build on developing these relationships if I didn't get the chance to see firsthand how Bruce had treated people openly and genuinely, and understood the dynamics,” he said.

Ideally, entrepreneurs need both a mentor who is a few months ahead of you, and a mentor who is a few years ahead, said O’Brien. Mentors should work in the same industry at a slightly advanced stage as the entrepreneur to help “address directly what he/she is experiencing,” he said.

Seasoned advisors who have had even more experience could be permanently involved in a venture, as they can help lead the business. “While mentors are likely to change as your needs as an entrepreneur evolve, look also for advisors and a board of executives who can provide guidance to the company at large and serve your needs in funding, marketing, strategy, operations and broader corporate questions,” O’Brien says.