Improving Startup Accelerators(Or Anything Helping Entrepreneurs)

Edit May 2019: I shared learnings from raising an unusual seed round of funding, which is in the same spirit of this post, talking about how to build companies in more ways than just the “Silicon Valley way.”

Most startup community things suck (incubators, accelerators, schools, government initiatives, hackathons, conferences, etc). All are well intended but most don’t deliver real value, except for cash. Some do more harm than good.

In almost every country, leaders are trying to foster innovative entrepreneurship. But with a lack of blueprints or resources to ask for help, many of these initiatives are failing due to common, avoidable reasons.

Here are some straight forward ways you can improve — which we must, because much like the development of farming or written word, entrepreneurship is a crucial force for improving our world.

Source

After the company I founded in Silicon Valley was acquired (and realizing I needed burnout recovery), I sold all my possessions and started traveling the world in a carry on backpack.

Along the way I mentored over 1,500 founders in 30+ countries and worked with governments, accelerators, universities, investors, and NGOs to help them get better at their mission: to see more successful entrepreneurs in more places creating more things.

I’m thankful that I’ve seen first hand not only the spirit of entrepreneurship in every corner of the globe (even North Korea, of all places), but that meaningful change can and is being made through the advice in this post and the dedicated efforts of local community leaders. I hope this helps you in your efforts, wherever you are!

Accelerator: I use this as a catch all label for any of these groups. Because in one way or another they are trying to accelerate entrepreneurship. Nitpicking nomenclature (accelerators vs incubators etc) is silly.

Common advice for accelerators.

Every place is different, but I found very common patterns in the basic advice these types of groups needed to hear. Below, I’ll outline an ideal accelerator, why Y Combinator and TechStars had big news this week, why we should ignore signaling problems, and how to fix mentorship.

1. Don’t try to copy Silicon Valley. You can’t. Or even worse, don’t copy what you think is happening in SF based on movies and blog posts — we may seem transparent, but trust me, it’s mostly for show and the real info is beneath the surface or hard to write in tweets. Learn from SF in the right ways. Plus, you shouldn’t want to copy — SF is one specialized ecosystem that is great at some things and really bad at other things. Make your own thing. For example, I liked how The Family in Paris is embracing it, making their community very “French” because to do otherwise would fail. Don’t make silly names like “Silicon ______”.
2. Recognize there is a huge difference between venture scale (“Unicorn” path) companies and other forms of entrepreneurship. Most groups treat everything like it’s either Instagram (high risk, technical leverage, huge reward, Silicon Valley style) or a local Chinese restaurant, with nothing in between. But there are many shades of gray in the middle — for example, I love what Bryce is doing with Indie.vc by investing in companies that might be successful but not acquired for billions of dollars. If you aren’t aware of this continuum, you blindly make disastrous square-peg round-hole mistakes.
3. Accelerators are modern universities. The traditional model of “We’re an accelerator! Apply to us, we’ll pick the top 10, then 90 days later you’ll launch and get funding!” is broken. The true purpose of an accelerator is to teach the method of entrepreneurship, so that on graduation day the founders have the knowledge and tools to keep improving. Funding, launching, weekly growth, etc is all a bonus. Governments should back these groups since they are picking up the slack of other public schools.
4. Garbage in, garbage out. Picking only the top X applications you passively attracted is bad. If your program pushes people to the Unicorn path (the goal is to raise venture capital), but you invest in companies that aren’t a fit (see #2) or are the 300th version of Tinder, nothing you do will routinely result in success. If you only find 7 good companies for this batch, then only take 7. I’d rather err on the side of giving someone new a chance — but on the other hand, there is a lot of junk in most accelerator programs. Which leads us to…
5. Community building, farming, and hunting are crucial. Especially in ecosystems outside of San Francisco, the purpose of events, branding, and parties is to farm dealflow by bringing high potential entrepreneurs out of the shadows. You should be a magnet for possible founders. You also must go out and hunt, just like professional sports scouts.
6. Drastically improve the mentorship founders receive. Mentors must be relevantly qualified (‘been there, done that’), appropriately timed in the lifecycle (don’t push VCs on founders in their third week), quality over quantity, and be Socratic rather than prescriptive. Teach your mentors what you want from them and hold them accountable.
7. Avoid event, meeting, noise, and mentorship fatigue. Most accelerators push way, way too many events, meetings, and mentoring sessions on their founders. And the big coworking pits can be a disaster of noise and distractions — allow founders space to reflect and work. Let companies develop their own cultures / cults as the team grows past the founders.
8. Ignore the ‘signaling problem’. Love everyone, but invest in winners. Investing more money into your promising companies is not only fine, but likely a prerequisite to financial success for your accelerator. I think “grading” or similar meritocracy systems are needed. Founders need to know they’re being judged. “Everyone gets a trophy” does not work here.
9. One of the biggest not-frequently-talked-about values of accelerators is to recycle talent. I’ve heard YC founders say this was their biggest value inside YC. You should be a mega match maker of talent. Startup idea with a good team isn’t getting traction? Help them absorb into the winners. Back solid founders again after a worthy failure.
10. Government’s #1 job is to push meaningful change or get the hell out of the way. Lip-service policy deserves a punch in the mouth. The best thing government can do is to make things easier for entrepreneurs: easy visas, no taxes and tax breaks, ability to hire/fire easily, access to free work space, deferred student loans, no regulation on things like drones or stem cells, heavy investment in STEM education (and then keep graduates in the damn country!), etc. Pass “startup exemptions” to laws that otherwise create burdens. Have “startup fast tracks” for immigration, entity formation, etc. Create straight forward financial incentives for early stage investors. Create straight forward incentives for financial exits — without people making money, the circle of life can’t happen and all your efforts will fizzle out. Investors will fly anywhere in the world if there is a track record of venture-scale returns.
11. Traditional universities: entrepreneurship is learned by doing, not by reading about outdated business plans. If a student is doing entrepreneurship, give them the right help, remove obstacles, and let it happen. I went to one of the “top” entrepreneurship universities in the US on an entrepreneurship scholarship, yet while I was busy building an actual business my freshman year of school, they still required me to waste time taking courses like Entrepreneurship 101 where we wrote essays on “what is entrepreneurship?” (Thankfully, myself and a few other people helped revamp the program, creating the #1 university course for entrepreneurship in the country, ‘Spine Sweat’, Indiana U.)

This is why Y Combinator just created a follow-on investment fund and TechStars just acquired UP Global (Startup Weekend, Startup Digest, Next, etc).

It’s no mistake the top accelerators in the world are evolving this way. They need to do a better job bringing the right people in, and a better job getting financial returns from the winners.

TechStars has gone more global than YC, expanding into developing markets like Berlin. That means building a community machine that identifies and attracts the best potential founders and startups is super critical — leaning back and seeing who sends in applications simply won’t cut it.

Imagine you’re a football coach. If you coach a well-known team in a market where kids already want to play football and the best ones rise to the top, you can lean back and pick. But if you go introduce football into a new or underdeveloped market, you have to do a lot of community building, encouragement, talent identification and development, etc. just to have a shot at building a good program.

Startup Weekend and the other UP Global services are just one of many examples of how to do this. I’ve been a host, sponsor, speaker, judge, mentor, and participant at Startup Weekends all over the world, from keynoting the largest SW ever in Shenzhen, China to explaining what “startups” are to rural Filipinos. It is very easy to identify in those 48 hours which people have potential, while simultaneously developing the community for long-term indirect benefits.

YC, arguably the world’s top accelerator, has had lots of mega unicorn successes. But if they had more money at their disposal to continually double down on their winners, their returns could be record breaking.

Which is why they’re raising a fund. But if the press is accurate, YC will still avoid making middle stage (Series A, B) investments because of the signaling problem.

Signaling problem: when an early investor (like an accelerator) makes double down investments in some, but not all, of their children. That tells other investors that the unfunded children are somehow bad, which theoretically puts a metaphorical nail in their coffin.

Screw the signaling problem.

Source

There’s something in entrepreneurship I call the Lemonade Stand Syndrome. It’s when someone with authority (the “adult”) really wants to foster entrepreneurial passion, so they encourage the “kids” to try a lemonade stand. But they’re afraid to give real feedback to the aspiring entrepreneur and thus turn them off, so they say “Yum, this lemonade is really good! Here’s a nickel!” instead of telling them their lemonade sucks and they’d rather buy from their neighbor’s kid who uses savvy social media for customer acquisition and organic gluten-free free-trade lemon powder. (It also reflects the very real ageism in Silicon Valley, but that’s for another post.)

A common example of this is collegiate startup competitions where inevitably someone pitches an analog t-shirt company but wants to raise venture capital — and no one tells the founder the truth, which does more harm to the founder than the possibility of “turning them off” to this life.

Because of Lemonade Stand Syndrome, the Signaling Problem, and other politics, many accelerators are afraid to give blunt merit-based feedback or take actions that publicly treat their children differently.

But who cares? Everyone knows some startups win and most lose. Demo Day is literally an audience of people judging the output of your companies. Why should you hide this reality from your founders? The market, press, customers, employees, and investors are all cut throat capitalists. Competition is reality. Second place rarely matters for venture scale startups.

“Sorry Suzie, but Timmy’s lemonade stand has their shit together and you don’t. Here’s how you fix it, and we’ll help you as best as we can because we love you. But know that whoever passes the test at the end gets our money, and the rest don’t.”

Universities grade students. An average “C” student at Harvard is still pretty damn smart, but when they’re competing for that job at McKinsey, what matters is where they rank among their peers. Plus it gives them a kick in the ass — something many first-time founders in accelerators need.

If I have 10 seed companies, and I believe 3 of them are on track to be winners, then I obviously believe the other 7 aren’t going to get there. No one has a crystal ball and some of those 7 companies might win. But the reward for going heavy on your 3 likely winners outweighs the downside of possibly “killing” one of the 7 startups that might have turned things around.

A compromise is to have some kind of clear standard that you communicate to your companies, and possibly the outside world. It could be quantitative things like validated market size or attracting above $X of outside capital, or qualitative things like “we give you a weekly score on how well you’re doing the Lean method. If you end with an 8 out of 10 or above, we fund you.”

Note: this clear “line” between the winners and losers in accelerators is more black and white than it should be due to the other problems discussed in this post.

Judging startups is a particular skill and most judges get it wrong.

Far too often I see startup judges (either as a formal judge or via deciding to fund or support a company) try to judge the startup within their own worldview. Like when a company wins a hackathon because they made an app for children, and the judge happens to have children who like that stuff. Meanwhile, the team that improved solar panel efficiency by 20% is demoralized because the judge doesn’t like the sun and didn’t vote for them.

Judging pre-product-market-fit startups should be based on how well they are doing the process of entrepreneurship. Are they following lean principles? Are they learning quickly and cheaply? Are they asking the right questions? Identifying the right ingredients and team? Do they have the X Factor?

Model of an ideal accelerator.

There should be uniqueness from one accelerator to another. But at their core, the most successful accelerators in the world have six job functions:

Attract, Hunt, Select, Teach, Support, Invest.

That sounds obvious, yet most get it wrong. Your job as an accelerator, everything you do, is to end up with financial stakes in successful companies.

If you’re a government, school, etc you have essentially the same mission — to see lots of big successful ventures making everyone rich, which in turn fuels the circle of life. You just attack it from a different angle.

Outside of San Francisco this means you need to develop the community so you can attract talent, combined with going and finding talent, so you can teach them how to be better companies, and then help them win.

What about verticals, like accelerators for hardware or medicine? Frankly, I go back and forth on this. It’s been hard to diagnose this issue because of the mountain of other problems accelerators have today. You certainly want relevant mentors, enough skill to know an obvious joke when you see one (“we created a cream that cures cancer!”), and camaraderie among your founders. But on the other hand, the framework of entrepreneurship doesn’t change all that much between common startup types (apps, web, b2b, etc).

So it’s OK to have accelerators around inherently specialized verticals, like medicine or space, but to have a “Web” batch and a “Mobile” batch is silly.

Attract / Farm

Throw events, like Rockstart Answers, that are designed as an easy on-ramp for newbies. Do whatever you need to do to bring people together. Teach with the goal of making the community better (a rising tide lifts all boats). Spread the love of entrepreneurship.

I like events that share authentic stories from people who’ve walked the path. Or events (or web content) that share specific tactical knowledge on topics like legal or SEO. Or pitch events. Or simply putting a bunch of quality people in a room with plenty of booze and locking the doors. Buy something new and cool, like an Oculus, and let people play with it (I saw this work wonders in Russia / second world countries where techies knew about Oculus but didn’t have the ability to get one).

Hackathons are great if you’re actually building stuff and teaching/practicing the method of entrepreneurship. At a Startup Weekend in Asia that I mentored, almost every team spent the majority of their time on making their Power Points pretty, while they had zero clue how to validate their product assumptions. This is a wasted, and likely harmful, way of doing events.

The founder (white shirt, facing camera, center) showing his “FitBit for your penis” prototype to the humorously interested male judges.

Fun story: at that hackathon, one company did the opposite. They had ugly presentations and everyone laughed at them. But they put their heads down and worked. They ended up with a “FitBit for your penis” — funny, but they did the method of entrepreneurship better than anyone else and won the competition. They were the only company the judges asked to come off stage and give a closer look! ;)

Preferably, do this for free or at-cost. Do not ever charge entrepreneurs money to pitch. Get sponsors. This is your loss leader for encouraging a community. Give, but do not expect direct returns.

Obviously, branding is a big part of this. Can people find you? How is your “entrepreneurship SEO”? You want to be the group that has earned it when a quality person thinking about entrepreneurship comes to you.

Some of those functions have “greater good” effects, so why should the accelerator pay for all the costs when society gets some of the benefit? Pitch the government and get public backing — money, tax breaks, matching funds, free or cheap venues, fast tracked visas, a ‘concierge’ to help founders deal with navigating bureaucracy, free broadband, free plane tickets, etc.

For example, the French and Dutch government own pieces of Air France KLM, so they provide free plane tickets to accelerators bringing in overseas mentors! Turkish Airlines shows startup demo videos on seatback screens.

The key here is to give transparency in your relationship with government, but not control over how you operate. They’ll just muck it up. Try and put on paper that this is a long horizon — I’ve seen politicians pull the plug on things after two years because they don’t understand Silicon Valley took 150 years to develop.

Hunt

This is one of the biggest gaping holes in current accelerators. Even the New York Yankees have scouts that go out and find talent and a minor league team with specialized coaches and psychologists to develop that talent. You should too.

Go find the PhDs tinkering in universities. Go find a successful offline company that should be going online (I found an entrepreneur stuck in Russia with an offline travel agency trying to do just that — she’s now in the 500 Startups batch in California). Go find the already successful seed startup or project-that-isnt-yet-a-business and pitch them on the (hopefully real) value of working with you. Go find a company in another country and give them their ticket out. Go find the introvert who loves to code side projects but doesn’t like your extroverted farming events.

Yes, it’s hard and takes more work, but shut up or get out. If I had to pick between farming and hunting, I would only hunt for my deal flow. But 99% of the time accelerators are doing mostly or only farming.

Select

I don’t care if you’ve told your investors / the government that you’ll fund 10 startups a quarter. If you only find four worthy ones, then only do four. If that’s really a problem, fix your farming and hunting and/or do a better job managing your investors.

I’m usually against “decision by committee” accelerators. It can work in professional venture capital firms that require unanimous partner consent before deploying $10M. But for early stage, I think it’s fine to be less unanimous.

Remove the voodoo from the selection process. Just like how you remove the voodoo in hiring. Identify the right criteria for your judgments and clearly establish it among everyone deciding. Having the right criteria is the hard part. Are you only funding venture-scale businesses? Only software that cuts costs for customers? Only companies that have a backup option of being a cash flow business? Are you willing to take on a founding team that has no technical talent? Recognize that humans are imperfect (even if founders are superhuman) and optimize for a few things that matter most.

If you’re going to invite outsiders (like a local business person) to help you judge, they better be extremely relevant — don’t ever have someone who built a textile factory 20 years ago judge your next Instagram without clear guidance from you on how to judge the right way.

Be flexible in your financial offers, rather than trying to shoehorn everyone into $50k for 8% or whatever. Y Combinator can do this, you can’t. You need flexibility especially if you’re going to go hunt for products that already have some traction, experienced founders, etc. Founders whining about getting a lower valuation than another startup? Tough, that’s business.

Teach

The goal is to teach, not to whip startups into fundable / launchable shape in 90 days. Your goal is to graduate students that are equipped to do their job. Teach the method of entrepreneurship. Everything else is bonus.

The full-time leaders and part-time mentors have to be extremely intentional in how you plan and use your founder’s time. You are a “shit umbrella” charged with protecting them from wasting time. Assume every founder-hour is worth $1,000 in equity value. Don’t put them into too many meetings and events. Mentor well (more on this below).

Too many accelerators have a schedule like “Week 1 is Lean Canvas. Week 2 is Venture Capital. Week 3 is Prototyping.” This might be fine if it was only an educational curriculum agenda. But in most cases it’s creating the framework for what founders are expected to be doing with their time — resulting in massive disconnects that hurt everyone.

On that note: having KPIs for pre-product-market-fit startups like “by Week 4 you should have 100% week over week growth” is such a bad idea, I’d need a whole post to explain it.

I’ve seen founders spend their first few weeks invalidating their original idea. OK, that’s good. But then an arbitrary date happened and the accelerator says “it’s time to start prototyping now if you want to be fundable by demo day!” So even though it had been one day since the new idea replaced the invalidated one, the founders started building because that’s how they were being judged.

Source: the future

We need more than just consumer / app software startups. Since most of the famous “Silicon Valley style” entrepreneurship in the last 10 years was in this pattern, that lead to the successful rise of things like Startup Weekend — where you literally could start and launch an app in a few days. But that framework is now doing us a disservice by being applied too broadly. It’s easy to put something simple, like an app, on a relatively patterned timeline. But if you want to invest in hardware, energy, enterprise, or anything other than Yo, you have to recognize the 90 day educational timelines and startup execution timelines are usually different or unpredictable.

An example educational timeline, by week over 12 weeks. Some things, like mentorship and Lean methods, continue through every week:

1. Set expectations. Be clear about process, what you expect, timing, urgency, grading, common pitfalls and mistakes, etc. Go over Lean Startup principles (such as how to ask the right questions) and have companies immediately begin that process — hopefully they have a key learning by end of first week. This process should be measured every week throughout the program and used as a predictable conversation foundation. Get the founders outside together, without you, and encourage them so they can form their Band of Brothers bond.
2. Communication training. I used to advocate stage-worthy pitch training only at the end, but so many new founders are really bad at communicating their ideas and communicating about the places they need help that it makes the accelerator time wasted. So at the beginning, do general communication training, with pitch training at the end.
3. More Lean work. 90% of founders in accelerators are overbuilding, working on the wrong things, asking the wrong questions, not properly identifying cohorts and markets, etc. So spend more time on it early.
4. Time management, goal setting, team processes, self diagnosing. This one is usually not formally addressed in accelerators, but should be. Teach people how they should be acting day to day as individuals and as teams. Give them the tools and guidance to be moving quickly in the same direction, to self reflect and fix internal process issues, etc.
5. Prototyping — how, when, who, quickly, cheaply, tools available.
   Monthly check in — be brutally honest about where the company stands and tell them what you think. Judge how well they’re doing the process.
6. Product development. When should you start building? How do you know what to build and what not to? When is technical debt OK? Do not let teams go heads down on building / coding until the timing is right. Engineers want to engineer, designers want to design, etc — it’s a natural desire, but usually a bad one in the early days.
7. Team. Everything about people, hiring, firing, founder fights, advisory boards, culture, structure, methods (e.g. holacracy), compensation, options, management tips, and so on.
8. Operations — legal, accounting, HR, etc. Should they incorporate a UK Ltd if they’re in France? What are common HR mistakes for startups? Is it worth outsourcing bookkeeping? Etc.
9. Growth — sales, marketing, acquisition, product.
   Monthly check in. If they aren’t cutting it, give specifics about what they need to do. If needed, this is a serious “come to Jesus” meeting.
10. Funding — should you, when, how, who? How it works. Understand Venture Capital math. Are their alternative sources? Common “evil VC” problems and how to avoid them.
11. Pitch training. Hit this hard. Be brutal. Iterate. Record on video. It’s very important to have founders watch other founder’s pitches. Have founders swap companies for the pitch to make it fun. It should be more than a day or two of work.
12. Demo Day if applicable. Meet with outsiders or investors if applicable (and make sure you frame it correctly if they aren’t actively fundraising). Have companies share learnings and results with other teams. Demo products. Tell each company their fate for follow on funding, what happens after graduation, etc.

Some things are happening throughout, like mentorship and progress meetings with accelerator leaders. Have a clear, predictable, and consistent weekly “structure” agenda, such as all hands meetings on Mondays, outside speaker and dinner on Tuesday evening, one-on-one meetings on Wednesday and Thursday morning, Show and Tells with drinks on Friday nights, etc. Don’t deviate and don’t put noise in the rest of the time.

Support

If you have any founders who feel lost the day after graduation, it is entirely your fault. What happens after graduation? Are you leasing space to companies? Doing follow on funding? Providing mentors? Be clear about it.

How will you continue to provide support? Off the record Alumni Summits are awesome. Include all your founders in your mailings and events. Have a Founder email list (and even one specifically for CEOs) but be sure you don’t indirectly punish people for the negative things they ask/say among themselves — for example, if someone says they’re dealing with depression or Impostor Syndrome, don’t make them wish they hadn’t brought it up.

Company winding down? Don’t give them shit. Help them do it gracefully, and if you think the people are talented and it was a “worthy failure”, get them into your other companies or have them try again in your next batch.

You can also offer tactical support, if you can legitimately pull it off. Legal, HR, accounting, office admin, press relationships, recruiting, government relations, etc can all be helpful value-adds to startups.

Quality mentorship is key, but rare.

Entrepreneurship is an artisan craft. There is a reason why the #1 predictor of whether a person will be an entrepreneur is if their parent(s) were entrepreneurs — because this qualitative stuff is learned from example, handed down like an apprenticeship. The last 10 years have seen a ton of content put on the web (e.g. I learned about venture capital from investor bloggers before going on to raise $17M as one of the world’s youngest VC-backed founders), but so much of the best info is still handed down from person to person through chatting about case studies while drinking coffee.

Note: the better entrepreneurial education and systems get, the less true this will be. Not everyone can be a founder, but those who could be, should be.

Most of the mentorship startups receive is complete, utter, worthless crap at best and harmful poison at worst.

For example, at an accelerator in a nascent ecosystem in southern Europe, I spent almost all of my three days there undoing the harmful prescriptive advice given from other mentors. They meant well — after all, they donated their time to come in and help. But it did more harm than good.

The relevance and authority of mentors is key. At this incubator, a successful corporate marketing executive was telling seed stage startups they needed to spend most of their accelerator investment cash on launch marketing. Just… no. Better to have no meeting at all than to waste time on that advice.

Teach your founders to have strong opinions that are weakly held, to be sponges and curious students — but simultaneously to sharpen their skills of understanding who to take advice from, how, when, etc. A common symptom of an amateur founder is mentorship whiplash, where they hear conflicting advice from different people and don’t know how to parse it.

I’ve run across a lot of “professional” mentors who did something mildly notable 20 years ago and they still do the speaking circuit as a way to seem relevant. Avoid these people.

It’s simple: people should mentor about things they have personally gone through relatively recently. Would you take medical advice from a doctor who hasn’t practiced that specific issue within the last five years?

What about access to quality mentors?

This chicken and the egg problem is a huge barrier in new markets. Every community leader I know outside of SF is starving for quality mentorship.

Either do what you need to do to bring the right people in (fly them in, pay them, whatever), do what you need to do to take your companies to them, or don’t do it at all. Spending $500 or $1,000 on a qualified mentor is worth its weight in gold.

Better yet, get someone else to pay for it. For example, the US State Department paid for an accelerator in Russia to fly me in as part of a goodwill “let’s not start another Cold War” program.

For this reason, for the last year I was working with UP Global / Startup Weekend on a new project called Entrepreneurs Across Borders. It was meant to be a super easy matchmaking service between qualified mentors and the locations that needed them. For example, a legitimate founder from New York could get a free plane ticket and hotel in Athens for a week in exchange for two days of mentoring at the local incubator. I know many extremely helpful founders from places like SF would love to do this kind of subsidized travel, but it’s currently too laborious and ad hoc to be routine.

Unfortunately UP Global didn’t have the resources to formally launch it and it’s now a zombie. Perhaps now as part of TechStars they will!

EDIT November 2015: I ended up doing it — check out Nomadic Mentors.

Tell your mentors what you do and don’t want from them. Grade them. Make them earn it. Kick out the ones that suck. Compensate good ones.

It’s your crucial duty to make sure the mentors you put in front of your startups are qualified. You should write down what you do and do not want from mentors. Don’t let them in front of your companies until they’ve read it or discussed it with you.

Too many accelerators proudly boast of their huge number of mentors. I saw an accelerator give an update to their investors with a proud statement of “in the first four weeks, our startups have had over 300 hours of mentorship!” But the quality was awful. Talk about a vanity metric!

You should differentiate between Mentors and Network. Have a big Network of people who you can turn to for reactive help as specific issues come up — lawyers, accountants, hardware OEM specialists, freelance press relations, etc. This is what most “mentors” listed on accelerator websites actually are today. But don’t put these people in the wrong situations, such as a lawyer giving product feedback (it happens surprisingly often). You can still list these people on your website as a marketing tool and as a ‘reward’ to those people for giving their name and time.

But then have a smaller, curated group of Mentors. These are the people you’re proactively putting in front of your companies every week. If you have access to a Mentor with a clear track record (such as recently exiting a startup), then bring them right into the Mentor group and thank them for their time. Otherwise, people should start off in the Network group and earn their way up into the Mentor group.

Founders should be grading every person they meet with, either Network or Mentor. Is a Mentor getting bad feedback? Are you even giving your mentors feedback? If there’s a problem, address it, then demote them. Is a Network person doing really well? Promote them.

This works even better if you can compensate the Mentors via equity sharing. Companies give “advisory board” equity to their mentors, so why shouldn’t part of the accelerator equity go to Mentors? It’s worth it to give excellent Mentors 1% of the fund upside than to have free mediocre people.

Source

Be Socratic. Drop your personal biases. Ask the right questions.

A common problem is a mentor standing in front of founders and saying “I did XYZ this one time and it failed, SO YOU SHOULD NEVER DO THAT!”

Or even worse: “I did ABC this one time and my company succeeded, SO YOU SHOULD ONLY EVER DO THAT!”

There is a reason why the #1 most given answer by qualified mentors to the common questions asked by startups is “it depends.” There are very few rules in startup land. Yet most mentorship is prescriptive and ignores this. Your job is to give founders accurate and relevant data points (both qualitative and quantitative), guidance on how they can answer their questions, specific resources for them to do so (like an introduction to an expert), and to hold them accountable for what they do.

Some of my basic advice here is to just give appropriate context and teach frameworks, not prescriptions. “When I did XYZ, it didn’t work and ABC happened. But I’ve heard of XYZ working for this other company. I think the difference was 123. You should investigate these RTY specific questions to figure it out, and based on that, this is how I would personally navigate those forks in the road if I were in your shoes.”

Asking the right questions can be better than directly answering what the startup wanted to know. For example, a very common question is “how do I raise money?” Most of the time my response is “Have you gone through the process to determine if you should raise money? If so, why now? Let’s go through that together, and if it’s worth it, we can get into fundraising specifics.”

Even appropriate but incorrectly-timed questions can be damaging. Good mentors are experienced and naturally excited by this world, so we can accidentally get ahead of ourselves. For example, if talking with a new startup that is still trying to identify its customer cohorts, it’s not worth asking “so what technology stack are you going to use on your future mobile app?” It seems innocent, but it takes valuable time and can give the entrepreneur a false positive that they should be considering that now.

You should also use your experience to dig into the things they might not have thought about, like motivations (“Do you want to be rich or in control?”) and models (“Is it more important that you build a business, or do you want to have positive social impact?”)

Or maybe they need to be re-calibrated. We get so caught up in growth hacking, funding hacking, hacking hacking, etc that sometimes we forget that if you’re opening a restaurant, it doesn’t matter how well you growth hack if no one likes your food. Sometimes founders need a perspective reset, and that’s your job.

Using the Socratic method is a very useful default strategy. Ask questions, poke into assumptions, challenge them, prompt them to validate what they’re telling you, etc.

This helps you recognize and avoid your own human baggage. It’s amazing how often I see a startup go through mentorship with predictable results: the B2B mentor gave them advice to pivot towards B2B, the app guy told them to go mobile first, the VC told them to sell their soul for the sake of growth, the SaaS lady told them to value recurring revenue over anything else, and so on.

Admit when you don’t know something. If your ego is so fragile that you have to bullshit your way through mentoring a startup when their entire life might be on the line, then you need to stop mentoring and seek help.

It’s their startup, not yours. Celebrate and respect founders, or leave.

Me at a hackathon in St. Petersburg, Russia. They had more technical talent and hard work spirit than most of the softies in San Francisco :)

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Many thanks to Tyler Willis, Ana Milicevic, Jason Jedlinski, and Oguz Serdar for proof reading this and turning it from bad to good!