How Investor and Investor-cum-mentor are Totally Different
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The first rule about mentoring is that you never tell entrepreneurs what to do, you only suggest. It is not for me to ensure that they follow my advice. The entrepreneurs I met so far or whom I continue to meet (around two entrepreneurs every day), sometimes follow my advice, sometimes they don’t, sometimes they want it and sometimes they don’t even want it. I listen, probe, enquire and then try to understand entrepreneur’s goals, ambitions and current situation including his/her resources and constraints; and finally competition. Then I suggest few things to help the entrepreneur focus on right thing. In most companies I would end up not investing. So I don’t see it difficult to take time out for meeting entrepreneurs.
There is no overlap between my entrepreneurial and mentorship roles. ‘Can I meet you for half-an-hour for advice’ from my time is now jargoned as mentorship. When I started off, there were only 14,000 Internet accounts in the country. And from that, we managed to build India’s first profitable Internet business. That’s why I want to mentor because it is good to have a mentor around when an entrepreneur is starting off. A good entrepreneur will take advice from people he/she think would provide the right advice and you need inputs from many sources.
INVESTOR VERSUS INVESTOR-CUM-MENTOR
The two roles of investor and investor-cummentor are usually dovetailed because your interests are aligned with the entrepreneur’s. As an investor giving out advice, it is also my fiduciary responsibility to protect investment because it is my shareholder money. As a mentor too, it is about giving best possible advice. But I would suggest not to start a company with an intention to sell it within two-three years. It is a high risk thing to do and almost never works out. So you build the company and make profit but along the way if an exit offer come that you like, take it.
Also, I don’t think there is lack of good mentors. It is about finding the right person for advice on a particular problem. And there are different problems I see in entrepreneurs. Some don’t want to make sales call because they believe they have product expertise. Some find challenge around putting together a great team. Most are short of capital. For some revenue doesn’t seem to be a priority in future. Some are into wrong business model. Some are not able to monetize their traffic. So each situation is different. But the quality of mentoring available is good now.
BETTER SHUT THAN ME-TOO
For entrepreneurs working on a me-too idea or not focusing on solving an unsolved problem, I say either to shut the business or stop pursuing it if it is an idea. Such entrepreneurs will have a difficult road to success. There is nothing called customized me-too, it is all theory. Flipkart was not an Amazon me-too. It was the first horizontal e-commerce player in India. I would call a late entrant into current market already copying someone else a me-too player. Being relevant to customer and differentiated from competitors are factors to succeed. Other thing I would suggest is to meet customers because entrepreneurs don’t interact enough with them. Also, it is really important to make sales call yourself.
(This article was first published in the January issue of Entrepreneur Magazine. To subscribe, click here)