Back in late June I had a tweet up with Rick Turoczy mildly poking fun at the whole incubator factory culture. Our banter continued on over the course of a few discussions leading to… yep, convincing me to offer mentoring in business operations and growth strategies at PIE (Portland Incubator Experiment). I had been looking for a way to get out to meet more people, and besides, maybe I did have some skills that would be helpful to these hatchling companies in building their own hopefully sustainable businesses.
While I have seen how incubators may not be always be good strategies for some companies, below are some reasons why I’m enjoying offering mentoring to those who have chosen to be part of them.
1. Exposure to Different Business Models
All the companies I’ve met with have their own ideas as to how they’re going to create revenue from their products, and where their target markets lie. That’s already a good step in the right direction for product creation, marketing targets and customer size. Let’s talk about how you’re going to acquire the customers to bring in this revenue to cover costs. Then you’re able to determine how much load the current team can handle before the need to add/hire more employees enter the calculations.
2. I’m Not A VC
I actually like the fact that although I don’t know that much about the VC process, it allows me to ask what might be obvious questions, while encouraging the companies to think through their responses. It also enables more free flowing discussion on the company side to talk openly about misgivings or issues they see coming down the road with their product or company. This avoids the appearance that they aren’t able to successfully run their company in front an investor they might want to pitch at a later date. On the flip side, I also get to ask basic questions such as, “What happens if you don’t get funding?” and “How long can you survive without a paycheck?”.
3. Founders Syndrome Is A Risk
Oh, you know everything already? That is not going to help you with any management or leadership skills down the road. Yes, confidence and being proud of your work thus far is great and is one thing; understanding how to listen and channel feedback from mentors - (future) employees, your partners and investors – is a completely different set of skills. Can you handle them? Are you management material as well as being a founder?
4. No, That’s A Narrative Not A Playbook
Shoehorning your business into another company’s business model is not the recipe for success. They may have done something similar to become successful, but I’ll bet it was the perfect storm of luck, market timing and media attention. What we don’t know is all the things that went terribly wrong up to that point, so while it’s good to review what went into the success, it’s just one story out of many. Let’s focus on what’s going to be the best direction for your company’s success.
5. It’s A Challenge
I’ve seen five different business models thus far, all at different levels of product development, financial strategy and longer term goals. Thinking about how to empower these companies to do some analysis on break-even costs, sales growth metrics or even basic expense tracking, keeps me on my toes in my efforts to explain and articulate why these items are important to the overall health of their company.
The companies I’m working with are at about half way point of their incubator experience. Some are interested in pursuing funding, some are not. Regardless of their longer term success, my hopes are that after our time together, they’ll have some exposure and understanding of what it’ll take to get there.
Have you ever tried mentoring? What did you think of the incubator you worked with?