Should I pay for mentoring service? This has been a much unclear and debatable topic so far that plagues start-ups all over the world especially the first time entrepreneurs.
If mentors ask to be paid, most entrepreneurs would attach a negative connotation and doubt the contribution that they will bring to the table.
As the digital industry has evolved over time, the concept of FREE is worshipped (while some would defiantly maintain that FREE loses all of its value). Well, this post is not to argue the pros and cons of FREE but the aim is to make all of us look at things subjectively rather than as a ‘rule of thumb’.
This post addresses the commonly understood definition of mentor, difference between mentor and a Business advisor and how the role and level of engagement is different in case of mentors and Business advisors.
So, should a startup pay for mentoring services?
First let’s understand what is it that start-ups or first-time entrepreneurs need when they think of engaging with a mentor. Since most are technology start-ups, in most cases the CEO or Founders are from a technology background lacking the background for running a business. Therefore, a first-time entrepreneur is looking for someone to help overcome his/her inexperience in running a business and putting in place business strategies that will help take the company to the next level and achieve short and long term business objectives. This is the primary objective of the start-up.
Is a mentor best suited to deliver on this objective? YES. A mentor comes with the necessary background to help pave the way for the start-up and would help avoid the typical mistakes that any young enterprise would make and save a lot of time, effort and money. Most important, a mentor would help to significantly improve the chances of success.
Therefore earlier the entrepreneur engages with a mentor the better. Preferably at the ideation stage itself. Most start-ups have to pivot at some stage because they did not try to establish that product-market fit at the ideation stage itself. They did not ask themselves those critical and mostly uncomfortable questions, probably because it did not occur to them or it could have meant going back to the drawing board. A mentor could be of great help here. He would help to keep them focused during those times when the temptation is high to cater to specific customer requirements, involving new developments to the product, just to get the first revenues rolling in.
Then why this debate? The need is established, the mentor’s ability to deliver, based on his background, is established and the end results can only be good for the company. Why do people still discuss the need to pay a mentor for his/her services? Aren’t such services usually paid for?
The problem lies with the term ‘Mentor’. In most cases, a mentor is someone who has successfully set-up, run and exited businesses, probably several times, and is now looking to give back to society by sharing his/her experiences with others wanting to do the same. The concept of mentoring is to work with and evolve people, be it the CEO/Founder or some of his key people. A mentor works with people to help them understand their environment, evaluate options, identify with issues that affect them professionally and personally and generally act as a sounding board to help the person/s become more effective in, both, their professional and personal life. That is the basic concept of mentoring. It is more person-specific and for the mentor this is an opportunity to share his/her life experiences, successes and failures, and give back to society to help others become more successful.
Monetary considerations do not play a big role in such engagements as the mentor is not doing it for money. He has probably made enough and more. Some equity stake at some stage may be considered. Therefore, the common refrain is that a mentor should not charge for his services.
Possibly right. But what are the needs of the start-up? We have already established that and definitely the first-time entrepreneur is not looking for the typical services that a mentor would or should offer. The start-up CEO/Founder is looking to take his business to the next level. What he is looking for is a Business Advisor. Someone who will closely engage with him to tackle everyday issues and build strategies to help achieve his business objectives.
Most Business Advisers like to call themselves ‘Mentors’ probably because it gives them an elevated status or they have misunderstood the term. (I include myself here.) Whatever the reasons, this seems to be the real cause for the debate. The moment the entrepreneur knows who he is engaging with and for what reasons, he will be able to hammer out a mutually acceptable and enriching engagement model.
So should such services be paid for? Definitely, YES. Such services have to be paid for because the mentor/adviser has invested years gaining that experience and this experience and knowledge has significant value. This experience could help jump-start the young enterprise. They are offering their service to monetize that experience and knowledge and is also probably a source of living. This cannot be expected to be offered for free. Of course, there could be multiple engagement models that they could discuss and agree upon, which could also include retainer only, equity only or a mix of retainer and equity. That is left to the comfort level of both parties. Any engagement model should be based on business objectives, timelines and scope of engagement. Most important, the entrepreneur needs to consider this as an investment and not an expense, as this engagement is expected to have a long term impact on the business.
To conclude, whether it is a Mentor or an Advisor, right now the services offered by both are the same and need to be paid for. True mentors are very few in India purely because on the one hand we do not have so many success stories of successful exits and even those few who have tasted success are mostly too busy crafting their next success story with little time for mentoring. Therefore, most such ‘mentors’ that one comes across are actually highly experienced business professionals who have the necessary credentials to help a start-up grow and meet its business objectives. That experience comes at a price.
Do you think differently? Do you believe a structured mentoring service can tremendously improve your startup and the eco-system at large? Do you have any comments to add?
Open up your mind in the COMMENTS section below.
ABOUT THE AUTHOR
The author, Srikanth Vasuraj, is a Business Consultant focused on helping start-ups to grow. He can be reached at +91-98454 78585 or firstname.lastname@example.org. Please visit www.nodiva.co.in for more information.
Past articles by Srikanth:
Pricing Strategy for Startups: http://blog.foundermates.com/pricing-strategy-for-start-ups/
Getting your first paying customer: http://blog.foundermates.com/getting-your-first-paying-customer/
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