Startups Need More Practical Guidance Not Fluff

by Ben Yoskovitz

I’ve argued before that startups need mentorship more than anything - practical, hands-on help from more experienced entrepreneurs, investors, executives, etc. That’s even more true now, given the tough times many startups will face. First time startup entrepreneurs in particular, who might not have gone through the last crash, are not adequately prepared to handle things. “Cut, cut, cut!” is not practical, helpful advice. It’s tantamount to yelling, “The sky is falling!” Not useful.

“It’s going to be hard to raise capital.” = Not Helpful.

It was always hard to raise capital (contrary to what we might have seen coming out of Silicon Valley). It’s certainly harder, but not impossible, and stating the obvious doesn’t help.

Equally, presentations that talk at a high level about why it’s actually a good time to start a company don’t help either.

Startup entrepreneurs need mentors.

They’re hard to come by, but I believe in their necessity more and more each day.

Having said that, I was extremely pleased with StartupEmpire, the recent 1-day event put on by Jevon MacDonald, Jonas Brandon and David Crow.

The key was that most of the content was practical and specific. There was very little fluff, very little generic repurposing of content we’re seeing all over the Web (both negative and positive.)

Raymond Luk at Flow Ventures shares his practical takeaway thoughts which I think are absolutely true.

Here are some of the highlights I want to share:

  • Howard Lindzon dove into a couple key things that I don’t think startups understand well enough: business models, social leverage and valuations. I’ll be writing a separate post on this shortly.
  • Don Dodge gave a presentation on starting a company in tough times. A couple highlights — “fear is temporary, greed is permanent”, vitamins vs. painkillers, and customers increasing interest to truly save money. Again, I hope to write a separate post on this soon.
  • David Cohen introduced TechStars (which has a similar model to Y Combinator) from Boulder, Colorado. The key to the model is mentorship. Having met with a number of Y Combinator startups and alumnis, I couldn’t agree more. And without a doubt I think this type of model will evolve over time in Canada. It might look different, but it’s going to happen in some capacity. To a certain degree it already is with Montreal Startup.
  • Rick Segal MC’d the event and also provided plenty of his own thoughts and advice to the crowd. Here’s a gem, “Never ever take the title of CEO. We fire CEOs all the time. Be a founder instead.” People chuckled at this comment but Rick’s right - the minute you become the CEO of a venture-backed firm your days are numbered. You might be the CEO that launches the company, grows the company and exits the company … but you might not. Young entrepreneurs starting out for the first time might be great at starting and launching businesses, but not growing them, building revenue, etc.
  • There was considerable advice regarding raising capital, legal structures, angel investors and more. This stuff might not be the most exciting content, but it’s incredibly valuable. Rob Hyndman, a lawyer with significant experience working for startups, spent a lot of time explaining corporate structures, financing paperwork and more. This is “meat & potatoes” stuff that first-time entrepreneurs have very little clue about. It might not be sexy, or get you pumped up to run out and start a company instantly and take over the world, but it’s critical stuff that too few entrepreneurs understand out of the gate.

    Craig Hayashi from The Maple Leaf Angels walked the audience through the angel investment process. It is different than raising money from venture firms, with pros and cons involved that are important for startups to understand.

    In a fairly animated session, Suzanne Dingwall Williams, a lawyer that works with startups, did a panel session with Rick Segal on financing, current market conditions, etc. Again, this was hands-on, practical information that can be of real use to entrepreneurs.

Entrepreneurs and Startup Founders Need Mentorship

This model has to evolve in Canada for more startups to emerge successfully. And the model has to continue to evolve and expand all over the world as well. Conferences like Startup Empire are a great start - to provide a broad level of mentorship and practical guidance to startups - and I’m sure we’ll see more great things from the next event. “Ra Ra Enthusiasm” isn’t particularly helpful, neither is “Oh Shit, We’re F-cked” warnings - we get it, times are tough - now go out and find people who can genuinely help you navigate those rough waters.

November 21st, 2008
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  • Ben, excellent content as usual without any fluff.

    We tried to raise capital two years ago and in all honesty got overwhelmed with the process and the time investment it required. It seemed we either grow our practice or spend the time to raise money to grow our business. The more VS I spoke with, i discovered that raising capital for a consulting firm is more difficult than raising capital for a software company.

    I am not sure if the timing is right now but I am thinking of taking a 2nd look at raising capital.
  • There are signs of improvement out there. Did you see the announcement of Microsoft's BizSpark program (hint: I blogged about it)? One of the aspects of this program is to set up a mentoring relationship between sponsors and startups. I know there's no love lost on Microsoft in some circles, but I think this is a great move on their part.
  • Thanks for the mention. Here's a post on one of the topics we discussed:

    http://www.robhyndman.com/2008/11/21/startup-ab...
  • Awesome post. I agree that mentors are huge for any startup, I've had a few myself that have brought so much value- completely free of charge.
  • @Khalid: Raising capital now is harder than ever. And I would estimate that the chances of raising capital for a consulting firm are basically zero. There are very very very few investments made in service businesses, so if that's what you're doing (which can be an excellent lifestyle business) then don't look to raise venture financing.
  • @D. Lambert: The Bizspark program does look interesting, although I haven't done a deep dive into it because Standout Jobs doesn't use any Microsoft technology.
  • @Rob: Excellent! Your post wasn't up before I linked to you, otherwise I would have linked directly to it. Much appreciated and thanks for commenting.
  • I am not sure I totally agree with you, but it is well stated. Keep up the good work.
  • Yes it is truth, now raise our capital is harder than before. I got this problem too. Global economic crisis become a challenge for all businessman.
  • I completely agree with the sentiment of what you wrote. I would add one additional thought though. Founders need mentors for sure, and I don't think it matters whether they are first time founders or serial entrepreneurs. But the key is that they need mentors who have comparable experience. For example they need a mentor who has had to fire people themselves or a person that has grappled with transforming a company that was initially product centric into a company that needs to be sales centric. Sometimes this will exclude many from the VC community who might promise mentorship but are not the right people to provide it
  • "startups need mentorship more than anything - practical, hands-on help from more experienced entrepreneurs, investors, executives, etc." I couldn't agree more with this statement. I wish I would have been able to find a mentor when I was starting out, talk about being in the middle of the ocean without a boat. Thanks for this article, and for the information about the StartupEmpire event.
  • @Allison: What don't you agree with? Happy to create some debate / discussion!
  • @Stuart: Mentors have to be able to actively help, not just provide generic advice. Mentors will generally have much more experience -- and be able to guide entrepreneurs through things they've never had to do (firing people might be a good example of that.)

    Thanks for the comment!
  • I couldn't agree more with this post. Let's be realistic. It's a tough time for many SMBs right now, so nebulous, fluffy advice and rhetoric is useless and blinding to many entrepreneurs. That said, innovation will always be rewarded.
  • Good post. Its clear that young entrepreneurs need some guidance and mentorship from those that have done it before. Diving right into business without research what I was doing was a huge mistake. Learning on the go is ok but it would have been much easier had I had a mentor to guide me through the task of starting up a business.
  • @Tim: No matter what you still have to learn on the go - that's part of the process and an important one, but having some guiding hands to help you is critical.

    @Jonathan: Innovation is a "big" word. The best product doesn't always win, and right now it's definitely not about the best product - it's about the best business model, sales & marketing focus, execution, customer service. Innovation wins over the long term, but even still there are examples of crappier products dominating because of the "business" side of things.
  • Thanks for the mention. I get some knowledge for this mention, I am gree with you.
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