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Tag Archive : mentoring

The Indo-African perspective on the role of mentors in your startup

Over the weekend, I was a guest of Baljinder Sharma, a serial entrepreneur and a highly respected individual in the India & Africa startup scene. He put together the first India Africa Entrepreneurship & Investment Summit in Mauritius.

The event started as an idea to create a bridge between two ecosystems that houses over 1/3rd of the world’s population. It culminated in a 2-day event attended by over two hundred illustrious participants of the African & Indian early-stage ecosystem.  

The number of close relationships forged at the event is the barometer of success for such an event. On that scale alone – this event was a resounding success. I made several new friends, some from India and many from Africa. I will strongly encourage Baljinder to make the event a permanent annual feature for both ecosystems.

On the first day of the event, I was on a panel with an impressive list of panelists viz, Stephen Newton, Jonathan Mazumdar, Eric Osiakwan. Atim Kabra deftly and expertly moderated the panel channelizing our experiences and energy into a coherent narrative. Our discussion topic – the role of mentors and incubators in our respective ecosystems. Our discussion on mentorship got extremely engaging so much so that we did not enter into any meaningful conversation on incubation.

My co-panelists came up with a host of discussion points, but we unanimously agreed that the title of “the mentor” was thrown around very casually in our respective ecosystems. Often, service providers are self-anointed mentors, and their misrepresentation can have disastrous effects for the founders, their startups, and their investors.

On Sunday night as I boarded the flight back to Mumbai, I put down those discussion points that resonated with me; here is that list.

A mentor should not cost the company money.

This point is not to say that the mentor should work pro-bono. However, mentors that offer hourly/weekly/monthly/annual payment plans are service providers. If your proposed mentor charges money to meet you for an evaluation – please be smart and avoid them. 

A mentor’s role is to guide, not to become the founder.

I have committed this mistake a few times, so it hits home. Many times, founders start abdicating the decision-making role to the mentor, and there are several times the mentor starts getting too deeply involved. The mentor is not the CEO or a co-founder, but neither are they above the CEO or the Founders.

If you have crossed this line in your mentor-mentee relationship already – it is time to scale it back maybe even take a break. 

A mentor’s job is to do /advise you on what is best for you, not to make you happy.

This point is a personal favorite.

The mentor’s role is like that of a coach – they are present for the overall success of your company, not your success alone. Therefore, they must offer advice which is best for the company.

A self-respecting mentor will promptly quit if they get the message that their presence is to be a rubber stamp to your whims.   

A founder should have multiple mentors.

This learning was new to me. A founder should seek out multiple mentors that can help them with different aspects of their business or challenges. As the startup grows, there should be a churn in the mentors with new mentors taking over from the mentors that have finished their role/utility.

A good mentor stands on the side-lines while you make mistakes.

An extension of point 2. Experienced mentors sit on the side-line while you make mistakes even if they could help you avoid them. The lesson of letting you experience failure and learning how to prevent future mistakes is more important than the experience of getting saved by the mentor.

A good mentor will warn the founder of the challenges but leave the final decision on them.

The mentor’s role is to guide the founder through their decisions, but in the end, the founder is the one that must pull the trigger. When a mentor starts making decisions for the founder stops taking responsibility for the results.  

It would be best if you chose mentors that have substantial previous experience in the areas you need help

If you want to learn how to build a billion-dollar startup, who would you go to for help? The founder that built billion-dollar startups a couple of times or the founder struggling to get their startup out of their garage? 

Even though this sounds like a simple point reiterated – I am surprised how many times founders commit this mistake.

The best mentors only take on mentoring projects that challenge them.

Good mentors get sought, but they aren’t running after the money. They are looking for a challenge. A challenge that will stretch them and help them grow thereby (and in most cases) helping the mentor and the mentee.

Mentors that are running after money will accept any project, regardless of whether it intrigues them are not the right choice for you and your startup.  

The very best mentors get involved before the founders know that they need them and leave before the founders question their existence.

An involved mentor that is “in-sync” with their mentee knows precisely when to increase their involvement and when to decrease or terminate their relationship. A mentor that must be asked to leave has stopped paying attention.

It would be best if you convinced the mentor that you are worth their time investment, not the other way around

When a mentor is chasing you, explaining why you “need” their mentoring or pestering you to “sign-up” with them, they are a service provider. Service providers have other motives driving them but they are most likely not in line with your mentoring requirements.

The best mentors are so busy with their projects. They place a high value on their time. Therefore, you must convince them that you are worth the opportunity cost of their time – without using money as the offset.

My takeaway from the panel: Choosing is a mentor isn’t rocket science, but neither is it a game of roulette. Choose wisely through the generous application of common sense.

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How LenDenClub.com grew 8x in 7 months (and under budgeted spends!)

 

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It seems like yesterday when Bhavin Patel entered our office after raising money from VentureCatalysts. He wanted me to mentor his startup and he must have been very brave (or foolish 😉 ) to choose me as a mentor. My mentoring process is probably the hardest thing an early stage venture would have to go through. I love numbers and tend to drill the KPIs in to the memory of the founder through a series of weekly calls and daily follow-ups. To my surprise, Bhavin was ready. He didn’t flinch.

7 months after we started building LenDenClub.com, it has become one of the leading P2P platforms in the country. It is currently growing 25%+ on a month on month basis, is operationally positive and is preparing itself to snatch the numero-uno position in the market with a growth projection of 10 times its current size in the next 12 months. It is moments like these that one asks for! Our journey during the last 7 months has been very interesting.

 

How’d you do it?

 

One of the first things Bhavin and I did, was to come up with a list of KPIs that we thought will be relevant to the growth of the business. We put them on an excel sheet and created a chart wherein these numbers were tracked on a Friday to Friday basis and discussed on Mondays over a preset agenda. The objective was to first, understand what is working and what is not and second, let data guide the decisions we were going to make for the next weeks and months ahead of us.

 

This is much easier said than done.

 

The founder, working in the business, has a different perspective than the mentor who is working “on” the business. To get each other to see the other’s point of view, especially when both are passionate sales people, makes for a lively and sometimes heated conversation.

One of the first things I remember arguing with Bhavin was about the money spent on Facebook marketing- there were simply not enough conversions, even if the traffic was good. It definitely did not make business sense. I told Bhavin we needed to shut that channel, it was a vanity metric and didn’t make sense for our business. Bhavin was obviously mortified. 80% of the company’s traffic came from Facebook and shutting it off was incomprehensible. We both came up with multiple scenarios on either side of the conversation but eventually, we agreed to reduce spends on Facebook in a phased manner and see what the numbers tell us. We also decided to re-purpose some of these spends to Facebook and SEO/SEM.

 

So what happened?

 

3 weeks later Bhavin turned off the Facebook marketing tap (well before our phased plan) as the conversion rates from SEO skyrocketed. Bhavin quickly inferred that spending on SEO was providing better results compared to spending on Facebook, this was the beginning of something huge inside LenDenClub

 

They were beginning to understand their own numbers!

 

My ex-boss is a brilliant man and he was not only a great boss, but also an insightful mentor and I remember an immortal business lesson that he gave me:

You either have the numbers or you have a fucking good story!

And that lesson, once internalized by a company, primes them to win half of all the battles. Simply because once you understand your own strengths and weaknesses, you can focus your energies on the forces outside the business.

So week on week, we learnt more from the numbers and strategized on how to overcome the next Everest. Unbeknownst to Bhavin, I gradually moved to weekly to bi-monthly and finally to monthly interactions. By now, the team was focused on analyzing their numbers and making decisions by themselves that would support their hyper growth.

 

Why?

 

What LenDenClub required in their early stages, was a mentor who could dispassionately help drive hard business decisions and not a crutch. Once the team learnt to do it themselves, I decided to step back. Today, Bhavin still comes to me for advice, but it is a joy to see him answer and resolve some of the issues himself and make decisions backed by data. So as the weekly numbers started coming on schedule, I started to come up with reasons not be involved. Bhavin, who already knew the answers when pointed out, started to teach himself how to ask questions about the business and let data drive business decisions.

 

The results have been stellar!

 

To say that the results were stellar is an understatement. With Bhavin’s growth as a founder coupled with the surge in his confidence, numbers started to grow exponentially (numbers tell a story!). The number of loans disbursed through LenDenClub grew from 2 a week to 2 a day and it is now on the path to grow that to 20 a day. What has been the total investment that was utilized to get to this point? Rs.35 lakhs ($50,000). Revenues as a percentage of loan books have steadily increased as borrowers and lenders are increasingly promoting and referring new business to LenDenClub.com, thereby reducing customer acquisition costs.

What more? this includes spending on technology, growing the team 4x and marketing spends on video testimonials. Also, PR and legal spends helped LenDenClub.com become one of the leading voices at the RBI on P2P regulations.

 

So where to now?

 

As with any business that is going through hyper growth, such as LenDenClub.com, there are new challenges each day and Bhavin armed with his complete understanding of “what is the difference that makes the difference” is executing a plan to grow another 8x from today. He is sure that he can achieve these numbers. I am doubly sure.

 

About LenDenClub

LenDenClub is a leading P2P lending platform in India, focusing on providing loans to salaried individuals and women entrepreneurs. Founded by Bhavin Patel and Dipesh Karki, this automated lending platform disburses loan within 3 working days. LenDenClub raised seed funds from VentureCatalysts in April 2016.