Mentor or advisor? What do you need for your enterprise?
[Editor’s Note: Ennovent, an early stage social investor fund which morphed into an accelerator of innovations for sustainability in low-income markets, recently hosted a gathering of entrepreneurs and mentors. The insights from the gathering were gleaned into an article which their Communications Manager (Perzen Patel) has shared with me. How mentors are different from advisors and how/why mentors should have skin in the game are some of the key insights in the post below. For an example of a mentor in the social enterprise space, you need to look no further than DesiCrew and Rajiv Kucchal.]
The term innovation refers to the notion of doing something different – a novel idea or method that offers added value through the development of effective products, services, processes, technologies and beyond.
However, successful innovations, especially those tailored for low-income markets, require the creation of an ecosystem – an ecosystem that brings together entrepreneurs and leading business mentors, among others.
A strong ecosystem is required because in many cases, while early-stage entrepreneurs understand their customer’s problems, mentors often have the years of diverse on-ground experience required to develop and scale a business.
Nowhere is the need for a relevant and supportive ecosystem more evident than with entrepreneurs working to create innovations for sustainability in low-income markets. While many early-stage enterprise catalysts have exceptional ideas or concepts, they often have limited technical expertise, business experience or networks to effectively bring their ideas to market. As a result, many potentially high-impact ventures fail to address the needs of low-income communities.
With this in mind, Ennovent, in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), hosted an exclusive gathering of entrepreneurs and mentors on February 8, 2013 to understand the challenges faced by early-stage entrepreneurs in taking high-impact ideas to market. By bringing together entrepreneurs and mentors, the aim of the event was to gain cross-sectional feedback regarding how enterprises can better achieve milestones through increased access to relevant and effective mentorship.
Perhaps surprisingly, entrepreneurs identified early on during the workshop that defining the role of a mentor within their organization is challenging.
“There is a difference between an advisor and a mentor. While an advisor may provide strategic guidance on a one-off basis, the mentor needs to have skin in the game, be subject matter experts and be committed to providing hands-on help to a startup”, said Rustam Sengupta, founder of Boond – an enterprise that sells rural survival kits to some of India’s poorest villagers – who attended the seminar.
While there are a growing number of business leaders in the evolving entrepreneurship ecosystem today that are able to offer guidance to entrepreneurs as advisors or in other related roles, it was identified during the workshop that this is frequently not enough to support high-potential ventures.
Entrepreneurs often require a more structured level of engagement to be able to benefit from the mentorship process.
“Entrepreneurs don’t require mentors that come in and simply provide theoretical knowledge. What they need is for the mentor to be the pseudo-boss, an authority to report to,” noted Puneet Jhajharia, Senior Investment Officer at Grassroots Business Fund, an impact investment fund that also provides a wide range of business advisory services.
On the other hand, mentors identified the challenge that entrepreneurs often ‘don’t know what they don’t know’, so to speak, and are hence unable to access the help their enterprise may need.
Therefore, it becomes important that mentors identify this knowledge gap to help render high impact ventures successful. Rather than provide top-level advice, the mentor must understand the mentality and values of the entrepreneur and add a layer of connections and networks enabling the enterprise to achieve milestones and market viability.
“I like to call mentors ‘Market Makers’,” said Shivendra Sharma, a consultant with the International Finance Corporation, during the session. “This is because they are the ones that connect entrepreneurs to investors and customers.”
Sharma also added that mentors cannot expect entrepreneurs to connect with them over phone and email. Rather, mentors must establish the trust with the entrepreneur by going ‘to the field’, providing hands-on support and insights that have the potential to make a strong impact.
During the workshop the group also discussed how personal views may impact business decisions at an early stage. For example, when entrepreneurs establish startups, especially ones that cater to low-income markets, these innovators normally approach the venture from a personalized view. The result is sometimes clouded judgement and decision-making.
It is therefore the mentor’s role to challenge the entrepreneur’s personal biases and basic assumptions about the market, customer base or the innovation design itself. Mentors can add the most value when they enable the entrepreneur to leverage their market experience to analyse business opportunities and challenges.
Despite diverse views, the session participants postulated that in creating or supporting an innovation for low-income markets, above anything else, motivation is key.
While entrepreneurs receive motivation from seeing their innovation’s impact, mentors are frequently excited to apply their specific experiences to foster new, and sometimes unexpected, positive changes for an early-stage impact-focused venture. However, at times, even this emotional return is not enough.
Rohit Luthra, Managing Partner at PVC Partners, a venture accelerator and partner for early-stage businesses added that, “Free services of a mentor are never valued. There should be some ‘skin in the game’ by the entrepreneur in the form of milestone-based sweat equity to ensure that the mentor can remain engaged and be linked to the growth of the enterprise in the long-term”.
This exclusive session that brought together entrepreneurs and mentors strengthened the belief that while an entrepreneur is the one that challenges the system, it is the mentor that enables him to structure the innovation and maximize its impact.
Within the entrepreneurial ecosystem in India and globally, Ennovent acts as a facilitator and brings together the various groups that are focused on accelerating innovations from concept to scale, especially innovations for sustainability in low-income markets.
It is through sessions such as the one hosted on February 8 by Ennovent and GIZ that an effective dialogue can take place between mentors and entrepreneurs – as well as other relevant groups – to effectively accelerate innovations. Rather than making assumptions, it is the understanding of the challenges faced by entrepreneurs and mentors at the grassroots level that will enable the entrepreneurial ecosystem in India to realize sustainability and have a positive impact on low-income markets.
Learn more about how Ennovent is working with early-stage enterprises and mentors to accelerate innovations for low-income markets here.