Larry Page and Sergey Brin did not invent their mathematical PageRank algorithm technology or build their company, Google, alone. They had a mentor, Rajiv Motwani, a Stanford professor of computer science. Brin wrote last year, “…Rajeev helped to coordinate a regular meeting group on [the subject of data mining]. Even though I was just one of hundreds of graduate students in the department, he always made time and effort to help.”
“…always made time and effort to help”: a true sign of a mentor, and Motwani left his mark as a mentor or advisor on many more Silicon Valley startups, among them one of our favorites at JumpStart, StumbleUpon.* In fact, most people know intuitively how important advisors, coaches, and mentors are to a startup’s development and success, but it’s rare indeed that we actually celebrate advisors, coaches, and mentors. Do we even know what a mentor is vs. an advisor vs. a coach is, never mind having an iconic image of a mentor like we do of an entrepreneur (the equivalent, mentor/advisor/coach-wise, of a Brin, Khosla, Gates, Jobs, Ellison)?
Advisor. I think of an advisor as a professional who advises the company and not the individual entrepreneur, though this role is more informal than that of a Director. That said, it is not a totally casual role either.
For instance, at JumpStart Ventures, we typically advise that companies that put together an Advisory Board should absolutely pay those advisors, albeit a very small, even token amount. $250 per meeting (plus expense reimbursement) is fine for a startup; the point is for the entrepreneur to show that she values what she is getting and to add a hint of formality to the advisory process.
Paying in options or restricted units also works so long as an entrepreneur is able to issue those options with minimal administrative cost (ie, don’t spend $3K on legal fees to get the stock issuance mechanism right just for the BOA alone; if it’s part of a bigger strategy, then OK). .1% (that’s one tenth of one percent) per advisor is OK for a startup, and of course is probably rich for a company that is beyond startup stage.**
Getting creative is smart too. If you’re a pet food company, pay advisors not with cash or equity, but with a year’s supply of pet food. If you’re a $5MM+ dollar travel company, then offer a free cruise or something like that.
With regard to coaches and mentors, I once heard an interesting differentiation between coach and mentor, specifically:
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A coach focuses more on results; a mentor focuses on attitude
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A coach focuses on skills; a mentor focuses on vision
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A coach encourages you to fix problems; a mentor encourages you to lead a great life
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A coach helps you understand the “hows” of your career; a mentor helps you understand the whys
Coach. The way I would also boil this down is that a coach focuses on the individual, but is also aware of the team and company overall. A coach is trying to get the most out of an entrepreneur for the benefit of the company. Some coaches are paid; executive coaching is a whole industry.
In startup land, vs. big company executive land, cash is tighter (what a revelation, eh?) and so you see entrepreneurs finding creative mechanisms to get coaches. Sometimes they find a peer to coach them. Or, they find a group like YPO, EO, or Vistage International. Maybe they wait until they are past startup stage, more in positive cash flow stage, to get a coach. Occasionally, they are able to find a coach who will do the job at a significant discount or for free. Honestly, it’s all over the map.
Mentor. A mentor is the most personal connection. It is that person who will help you grow as an individual, and here I now reveal the answer to the question posed in the blog title: Obi, Dre, and Sir Laurence were all mentors to, respectively, Anakin Skywalker, Eminem, and Jack Nicholson. The idea of the mentor is to help the individual reach their fullest potential in life.
That personal connection can be impactful enough that it ends up benefiting the company, but that is not necessarily the goal. I have had a mentor, coach and advisor and I can definitely attest to the fact that while the coaches and advisors helped the company and me, the mentor did have the biggest impact on me in life. In fact, I still have his three primary pieces of advice to me as the top Memo in my handheld device so that I see it every day, kind of a security blanket (or, a hair shirt perhaps, since it is also brutally honest) for the soul.
Whether service providers, professors, investors, serial entrepreneurs, or big company executives, these forces behind the forces -- these advisors, coaches, and mentors -- are really important to a company’s, and/or an entrepreneur’s, and/or an individual's success. What’s common about them is that they take more initiative than they need to take, really believed in the company, concept or individual in some way, and expect little (and deserve much) in return.
At JumpStart Ventures, we have nearly 50 portfolio companies run by nearly 50 diverse entrepreneurs, so I have been able to see tons of great advisors, coaches, and mentors. I have a running list of some tops, and it’s surprising how different one is from another other than their genuine desire to help, just like Motwani -- but I would love to know who you think is top. Drop me a line or better yet reply to this blog with your thoughts on some top entrepreneurial advisors, mentors, and coaches. Celebrate them.*** They deserve it. By the way, they don’t need to be based in Northeast Ohio: I am, alas, open to the possibility that there may be some entrepreneurial passion, talent and skills beyond the NEO area…
Notes:
* Actually, I'm not sure whether he was advisor, mentor, or (the more mercenary, mortal) investor, or all three, in StumbleUpon
** Full disclosure: the “math” here is very back of the envelope. Say the average high growth start-up nationally is valued at inception at $1MM total. .1%=$1000. I suggested that $250 per meeting might be a good token cash amount. Board of Advisors might meet 4X/year = $250 per meeting = $1000 in cash. On the one hand, the options are not liquid and are slightly an administrative pain to deal with (accounting, vesting, remembering you have them). On the other hand, they ostensibly have big upside and one wouldn’t be on a board if one didn’t believe that. In a very scientific manner worthy of a blog, I figured those two pros and cons equaled each other, and so came out at .1%. Also, I saw somewhere that someone else expert-like recommended approximately this amount, which only reinforced my back-of-the-envelope, non-Black-Scholes calculation. Also, I have not to-date seen anyone recommend >1% for a member of an Advisory board (BOD is different) so that may set an upper bound.
*** Twinsburg, Ohio celebrates twins every year with a festival that draws national crowds. Maybe Mentor, Ohio -- beautiful, and right here on Lake Erie -- ought to celebrate mentors every year with a similarly large event.
Becca Braun is a past president of JumpStart Ventures. She founded and led a number of early-stage companies and organizations, as well as worked as a private equity investor and management consultant. She received her MBA from Harvard Business School and her BA in Linguistics from Harvard University. She is keenly interested in the intersection of wealth creation and broad-based regional economic growth.