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ICOs are Like Startups, but Advisors are Not Like Mentors

this is notICOs Are Like Startups

I’ve been saying this for a while now. ICOs cannot escape startup evolution characteristics. This means that their growth will be hard fought, hard earned, and hardly a walk in the park. Success will not be immediate, nor will it have a straight line trajectory to the top.

Yet, many ICOs are presenting themselves with the most optimistic scenarios.

The starting point for a startup’s life is a set of assumptions or hypothesis about something that the entrepreneur believes in. And it starts by proving it, while iterating on it. That proof comes from market adoption, not shouting over the blog that the idea is right and is the answer to the world.

So, my advice to many ICOs is to start reading about startups and focus on the product, customer and market as soon as the sale is over. And don’t get distracted by post-ICO euphoria and the price of ETH or BTC.

Advisors Are Not Like Mentors

Many advisors are recruited for marketing purposes. Maybe that serves the ICO process via visibility, but to succeed, startups need to surround themselves with people that can mentor them and advise them, and those people need to be experienced and qualified to do so, typically as entrepreneurs themselves or investors who have seen and worked with a lot of startups.

The rush to pile up a long list of Advisors as an instant proof of legitimacy or credibility is just a dressing appearance for the website. Beneath this display, most advisors are there for the ride, and the ICOs are less interested in their advice, but more in their photo.

I would rather see 3 or 4 solid advisors than rows of them. And they should be there for you in the long term, to help you and guide you whenever you need them.

Startups pick their board members and advisors very carefully. Many ICOs are not doing a good enough job picking the right advisors.

Advisors that can be mentors are more valuable, so don’t confuse promotion with advice.


Startups are like Patients. They Need Doctors and Hospitals.

hospital image

I interact with a lot of startups on a daily basis, while they are in various stages of evolution. Often, it feels like being a doctor or running a hospital.

That led me to think that startups are a little bit like patients.

Some are in the Intensive Care Unit. We’re not sure if they will survive. They need intensive care in order to make it.

Every other day someone will come into the Emergency Room, with something urgent that needs to be looked at, either because they had an unexpected accident, or because a problem erupted and they are bleeding.

The ones that are fit come for a regular check-up, and that’s all they need. Maybe they could lower their cholesterol, or lose a few pounds, but there is nothing critical.

In some cases, there is a lingering tumor, and we’ve been trying to convince them to have that surgery, but they are delaying the intervention in the hope that it will go away. Or maybe they don’t see the problem, although to the trained eye, the ultrasound shows it. Some prefer to wait for the operation until it really hurts and the pain is untenable.

Not entirely a medical analogy, but some are low on energy, so they need to gas up, i.e. raise more funds. But I try to suggest if they could start running on alternative energy that would make them more self-sustainable, like solar panels, i.e. generate revenues.

In general, the ones doing well just need a diagnostic exam. The ones who are still figuring it out need to be monitored more closely, remotely via data, or in person.

Sometimes, a specialist will be called to diagnose a specific issue, so they need to go deep into a particular area to isolate the problem, and prescribe a specific solution. Example, fix marketing or sales or scalability or a user experience issue. A few might need cosmetic surgery, so they work on improving the looks of their website or App.

And in some cases, psychological help is needed. Being a startup is not easy, and some entrepreneurs hit the depression doldrums or need a mental toughness workout, so they enroll in executive coaching, join a CEO Bootcamp, or a peer-to-peer support group to help them bounce ideas with others who are in their shoes so that it feels less lonely at the top.

In some cases, the startup is still young, and they need to go to puppy school to learn some good habits, so they join an accelerator.

Then, suddenly they go from being patients to becoming champions, running on their own.

If I were a doctor or running a hospital, my goal would be to get my patients to not need me again. I want them to be fit enough so they don’t come back, so I have more time and room for newer patients who need the help.

Of course, few of them will get snatched and get married to another company (exit), and then my involvement going forward will vary, depending on the situation.


Startup Mentoring Lessons: Blind Spots and Briefing your Mentors

shutterstock_251963791 (1)Many entrepreneurs don’t disclose everything to their mentors when seeking advice or asking for feedback.

That’s why giving advice and mentoring can be a hit and miss situation.

I’ve been mentoring dozens of startups in the past two years. About 30% of my time has been spent doing it altruistically, with nothing expected in return.

Most of the times, I get good feedback and resonance from the advice I give, but sometimes I don’t, as if I hit a bad note. But that’s ok, as it’s expected.

I’m pretty convinced there is some relationship between mentor whiplash and blind spots. If the advice given appears wobbly or not hitting the mark, the entrepreneur will feel disoriented and whiplashed, but imagine the flipside case where an entrepreneur listens to 5 successive mentors, and they all have something impressive to say. The entrepreneur would be very pleased.

It is very likely that these last 5 mentors were given the good opportunity to be properly briefed by an entrepreneur who accurately articulated what they were doing prior to being subjected to a mentorship session.

A startup has a responsibility to properly share and disclose what they are doing and already know, so that the mentor can provide the right advice with minimal blindspot handicap. Otherwise, the entrepreneur will try to interpret the mentor’s feedback by filling the blanks (around areas they didn’t disclose), and by discounting factors the mentor didn’t know. That doesn’t always work, as you could end-up with distortions mixed with misinterpretations.

Dispensing mentorship advice just by looking at a company’s website is a shallow and pretentious exercise. Drive-by mentoring could lead to superficial advice, just because mentors aren’t mind readers, and there is so much information that can be exchanged during a short period of time. I find that I’m better able to provide more pertinent mentoring when there is a continuous exchange of information and an ongoing relationship. That way, I know more about their business, and I have more time to think about their particular situations.

Hard problems require a deep dive and some back and forth, and that starts to border an advisory type of relationship.

Mentors aren’t stupid. They typically have experience. But suggesting decisions or providing advice with partial information can make anyone look stupid.

Same applies to investor updates. If you are open and vulnerable, you might get better advice. Make them feel your pain, and they will help you. If you are guarded and coy, you will get a shoulder shrug, indifference or bad advice. Mentors are not there to steal your ideas. They just want to help (if you let them).

Sometimes you’re looking for specific advice on a particularly defined area or subject matter, and don’t care to disclose your entire strategy to a given mentor. That’s OK. In this case, I suggest that you do a good job framing your particular situation with all the relevant facts and information, and tell the mentor you’re looking for specific advice in this narrowly defined area.

If you’re operating inside a company, you always insist on complete information to make decisions. As a consultant, you thrive on turning every piece of information in order to suggest possible decision options.

But as a mentor, you take stabs, based on what you see, which is as much as the entrepreneur is willing to tell you.

As a board member, you’re above a mentor from a disclosure point of view, but the entrepreneur can still snow you if they want to.

So, in addition to showing your customary deck to a mentor, or asking them to visit your web site, or try your product, how about spending time upfront framing and describing the problems and challenges you see as thoroughly and methodically as possible. That gives the mentor more data about your issues, and gets them at the same levels as you are in terms of insights and knowledge. If you have 45 minutes with a mentor, that makes most of that time focused on the mentoring, not getting-up to speed.

Let’s call this “briefing” your mentor.

Imagine if you went to a doctor’s visit and only gave partial information about the issue that’s troubling you, or that you didn’t accurately share your medical history. Of course, doctors run their own tests to figure things out, and the equivalent analogy is that the mentor will be asking questions to figure things out, but there is no blood screening or x-ray equivalent for a startup. You can’t hide a tumor because the x-ray, ultrasound or MRI will find it, but as an entrepreneur you can hide things (intentionally or not), and the mentor or advisor may never know it.

This applies even to sending investors update. For example, if your update doesn’t say anything about your product, when you are still iterating it and evolving it with new features, you’re clearly withholding information. When you’re sending a 3 paragraph update, and haven’t mentioned how issues with your payment provider affected your abilities to book new orders, you’re withholding information. When you’re already speaking to 3 short listed new VCs for your next round, and you’re saying in the update that you’ve just started to look for funding and asking for leads, you’re withholding information and misdirecting the kind of help you would need.

These are real examples I’ve recently encountered, (I kept the facts generic to mask the identity of the startup), and I know there was more information, because I engage with these startups separately as an investor in their companies.

One potential reason I was rationalizing for this, is maybe there was a lack of trust between the entrepreneur and their investors? I can understand that trust can erode sometimes with some investors if the company isn’t doing well, or if there are disagreements. But these were examples from companies that received recent funding (therefore were still in their honeymoon period), and they were doing well.

Don’t be an entrepreneur that hides or withholds information from their mentors or investors. If you do, you will get bad advice or indifference.

And if you decide to receive mentorship advice, try to brief your mentors properly and efficiently so they have the insights they need to dispense proper advice.


Objectives, SaaS, Sales, Venture Capital, Conversions, Monetization, Growth, SEO, Mentorship, HR, Weekend Roundup #13 Oct 6 2013

Startup Management is a manual selection from the hundreds of weekly articles being curated. Previous issues are available here. There are 13 links in this edition. Forward to a friend, so they can sign-up and benefit too. Business Models To monetize large networks of engaged users with a free product, founders need to create a new product that is different from the free one, leading-up to a Monetization Dilemma they will face. That dilemma emerges when the founder doesn’t get as excited or involved as they were with the original consumer product. I list 8 points for managing this dilemma. Conversions Bill Gurley revisits “the most powerful Internet metric of all”, 13 years after he first wrote about it, in Conversion: The Most Important Internet Metric of All (Revisited). “Conversion improvements typically are the aggregate gain of 100 tiny improvements, not one silver bullet. Rarely will you find one single change that is going to have a 5% lift in conversion… rather you will find 30 things on a page that all have a tiny impact.” This is a must read.

Customer Retention, Mentoring, Venture Capital, Pricing, Organizational Structure, HR, Content Marketing, SaaS, Weekend Roundup Must Read Sept 14 2013

Startup Management is a manual selection from the hundreds of weekly articles being curated. Previous issues are available here. There are 23 links in this edition. Forward to a friend, so they can sign-up and benefit too. Venture Capital David Teten of ff Venture Capital just announced the availability of a 13-page paper, The Lower-Risk Startup: How Venture Capitalists Increase the Odds of Startup Success. It was published in the Journal of Private Equity a few months ago, and you can download the complimentary pdf from this link. There’s another new 112-page report, the New York Venture Capital Almanac, published by CB Insight. It tallies the funding activities of the top VCs in New York, and their relationships with one another. Toping off the topic of Venture Capital, I wrote this analysis, Battle of the Tech Ecosystems: Boston vs. New York, relying on Mattermark data. Finally, Fred Wilson asks Are Universities the New VCs?, an idea he has promoted to a number of universities for some time now.

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