I just did a search on LinkedIn for “Business Coach” and found over 175,000 results.
A similar search for “Startup Mentor” yields close to 125,000 results.
Well, if I could have a word with all the mentors and coaches that are out there, this is what I would say.
Personal coaching can be warm and fuzzy, yes, but you could add so much more value to your work by using a structured methodology and platform resources.
This would make your work more effective. You could help more entrepreneurs faster and avoid some serious pitfalls.
We have now run our 1Mby1M platform coaching successfully for a decade. I would like to offer some feedback from 1Mby1M to all independent coaches and mentors.
Hopefully, this will help some of you to refine your own mentoring processes.
1. Follow a Methodology. For example, we at 1Mby1M have a methodology that operates on the Bootstrap First, Raise Money Later (or not at all) mantra. We don’t force our entrepreneurs to raise capital. Not all businesses can or should raise capital. Our methodology takes into account the fact that over 99% of the businesses out there need to be built in a lean, capital-efficient, bootstrapped mode. YCombinator has a different methodology. They focus on raising lots of capital. They’re effectively a VC fund. If an entrepreneur tries to fund a business that doesn’t have what it takes to become fundable, they will fail. I am noticing some are blindly advising entrepreneurs to go raise money. Please stop doing this. This is misleading, shooting from the hip and a parroting of clichés. While taking an entrepreneur’s money or equity, please try not to lead them down the wrong path.
2. Entrepreneurs need an Online Curriculum to follow. The first-time entrepreneur’s journey is terribly complex, with a steep learning curve. They need a curriculum that teaches a proven Methodology of how to go from, say, one customer to five customers to 50 customers to 500 customers. Entrepreneurs need to learn various pieces of methodology in an efficient manner. These are the typical strategy questions: The 1Mby1M Self-Assessment. If they get stuck on them, they need a curriculum with which to plug their knowledge gaps. So, those coaching entrepreneurs should try to standardize on a proven curriculum that works. All are welcome to use the 1Mby1M Curriculum if that is the methodology you want to follow. If not, find one that is well thought through and well designed.
3. Learn to understand Positioning. In my experience, when an entrepreneur is early and still struggling with figuring out product-market fit, one of the most useful types of mentoring (s)he needs is around positioning. Very few people are good at this. Entrepreneurs need to find mentors who can help them with this, and it will be the biggest and most effective contribution they can possibly get to advance their journey. In the 1Mby1M program, the most effective interventions we make in businesses are around positioning.
4. The matter of Equity is a lot more complicated than some make it out to be. Not all great businesses are great investments. If an advisor takes equity in a company that is better run as a cash business, then equity is not going to result in a large exit. So, before deciding on equity as compensation, try to understand whether the business is fundable/salable.
5. Which brings me to my next point: what is Fundable? Clearly, over 99% of the ventures are NOT fundable. Certainly not fundable by VCs. VCs want to go from zero to $100 million in 5-7 years. That’s hyper growth. And they want billion dollar plus TAM. Neither parameter comes along that easily. So before advising people on investor pitches, try to learn how to diagnose what is and what isn’t fundable. Perhaps spend a few months deeply learning the 1Mby1M Methodology and Curriculum or some other comparable material that teaches the fundamentals of this super critical topic.
6. TAM Analysis is essential. Most TAM models I see are aggressive over estimations, often top down, 30,000 feet level approximations. Without a credible TAM model, investors won’t take a venture seriously. Again, please learn and teach the right methodology. By the way, Positioning drives TAM like nothing else. Get one wrong, the other topples like a domino.
7. Don’t reinvent the wheel. We’re almost in 2020. Case Studies exist for how entrepreneurs have achieved success. Playbooks exist. We have built our program entirely on case studies. Use case studies. It is the best way to teach business.
8. VCs are not one-size fits all. They have dramatically different core competencies, preferences, investment styles, investment thesis. Some chase Unicorns. These days, some seek alternative styles of returns, acknowledging the fact that there is way too much money in the system, and way too many of them. Read, view, and/or listen to our investor interviews to become better equipped in identifying the right investor-entrepreneur fit. Just like product-market fit, this too needs to be positioned right.
9. Learn to teach Bootstrapping. Whether or not entrepreneurs raise money later, they will have to bootstrap the early stages. Use my free LinkedIn Course on Bootstrapping. It busts a LOT of myths.
10. All are welcome to do their coaching / mentoring on top of the 1Mby1M platform. Use the resources we’ve created. Use the Self-Assessment. Use the Free Public Roundtables. Use the blog. All our case studies are there, available for free. Use the Curriculum. Use the methodology. Use the network. We’re happy to collaborate.