News

Explosion of new businesses calls for mentors

'Wisdom, insight and time' help entrepreneurs with ideas but little experience

Cecilia Corral was just out of college when she got involved in a health care startup with other recent graduates.

The young management team was brimming with energy and ideas but had little experience launching a company. When it came to decisions on hiring, firing and how to grow the business, they relied on advice from a formal and informal network of older mentors.

"My co-founders and I are fairly young," said Corral, a 2012 Stanford graduate in product design who works as chief design officer at CareMessage, which aims to improve the health of under-served Americans through targeted cell-phone messages. "We've worked, but very briefly. We were right out of college when we started, and there were a lot of things we didn't know and still don't know, and we really rely on our mentors for that."

For example, one informal mentor, Peter Bing, helped them understand the importance of making their health messages culturally relevant and respectful of traditional values of the populations they aim to serve, Corral said.

"He's a much older gentleman who doesn't even text but he understands what we're trying to accomplish, to tackle the health disparities," she said.

Today Corral's two-year-old firm has partnered with 65 health organizations to reach 50,000 patients and is on track to reach a half million by the end of the year. The nonprofit enterprise offers its products free to clinics serving low-income patients and earns revenue by selling the same technology to larger health-care systems and hospitals.

Corral was at the Avenidas senior center for a recruiting event held recently by Enterprise Futures Network (EFN), an organization that provides mentors for her company and for other university-affiliated entrepreneurs.

More than half of EFN's 160-plus mentors are over 50, said founder Thomas Jensen, whose business career has included a directorship of a technology and engineering company and teaching at universities.

"We're all about broadening the circle of entrepreneurship," Jensen said.

"We're based on mentors interested in giving something back in terms of their wisdom, insight and time. I personally co-founded a software firm about 12 or 13 years ago and I wish I'd had more mentors and wish I'd been better at asking people to be a mentor," he said. "That was part of the inspiration behind EFN, my own personal experience."

Working with 10 partner universities, including Stanford and University of California at Berkeley, EFN has mentored 2,400 students on 800 teams in its 11-year history, Jensen said. About 100 of the teams have actually "launched," that is, found investors. Collectively the 100 have raised a little more than $50 million, he said.

EFN relies on its partner universities to provide the students. Mentors advise on everything from business plans to market research to presentation skills. In some cases, mentors find themselves judging university-sponsored contests such as the Duke University "Start-Up Challenge."

EFN also has a high school program in which students shadow mentors to learn about business development and the entrepreneurial process.

Among the Avenidas audience members was retired Palo Alto entrepreneur Dick Smallwood, who said he was going to apply to become a mentor.

"I've been sitting around retired, and I have a lot of experience," Smallwood said. "I had my own startup (in the area of market intelligence). I keep thinking, 'Gee, I've been through all this stuff. Here I am getting old and I have all this information. Why don't I help somebody with it?

"And working with young people, too — that's the thing I miss, being retired."

Audience member Judy Lochead, a recently retired consultant in data analytics, also said she was interested.

"I really would like to help with mentoring but I'd also like to flip the role (and receive mentoring) because I have some ideas," Lochead said.

Jensen said EFN's goal is to provide mentorship, not receive it, but added that mentors themselves often gain new ideas and connections in the process.

Investor David Arscott, general partner in Compass Technology Group and a longtime EFN mentor, said that while mentors receive no financial compensation, "the compensation really is, at least for me, learning about businesses in areas that I didn't know about before and didn't have any information about.

"These are young, bright minds that are applying themselves in a focused way to whatever the problem is and they're coming up with new perspectives that, for me, have been very enriching. I come out and say, 'Oh, I ought to look at this and I ought to look at that.' It's not exactly a Socratic process but it's an interactive process where you're bringing your background to these teams and helping them benefit."

EFN has an application process and generally seeks mentors with seven to 10 years of substantive experience in starting or managing a company, Jensen said.

But Arscott noted that a technical background is not always required. "The mentoring process can involve every single professional, and it doesn't even have to be professional — you can learn things out of public service. In any career you've developed a level of expertise to understand and contribute. All that information — we don't always realize how much we've learned, but that information can be turned back on itself in terms of coaching people."

Relatively new platforms like the mobile phone and the Internet have generated "a tremendous amount of company formation" in fields as diverse as clean technology, consumer products, instrumentation, extraction and medical devices, Arscott said.

With dramatically reduced barriers to entry, "any of us can start a business this afternoon on the internet, and they're virtually free. To me, that's the most profound thing that's happened in the commercial world since I started working."

EFN, Arscott said, "is kind of the glue between all the people out there with expertise and these young teams coming up, and that's a big source of opportunity for mentors."

Another mentoring opportunity, an Avenidas participant said, is the SCORE program run by the U.S. Small Business Administration.

A spokesman for the San Jose-based Silicon Valley chapter of SCORE said the group has about 50 active volunteer counselors, who meet with small businesses as diverse as restaurants, web developers and distributors of patio equipment.

For more information about EFN, go to enterprisefutures.org. To contact SCORE, go to svscore.org.

Comments

Like this comment
Posted by Over-Fifty
a resident of another community
on Sep 7, 2014 at 10:39 am

While our economy needs new businesses to create new solutions and provide jobs that larger companies can not—the fact that most young people have no idea how to run a company begs the question why we should be surprised when these companies fail?

Historically, people gained experience working for older, established, companies before venturing out on their own. These days, with the lure of venture backing, and the possibility of selling out before the company has even gotten going—the path to wisdom and knowledge is not generally chosen by those who at twenty-one believe that they know more than their parents, and all of those who came before them. Too many of these young people see themselves as the “smartest people in the room”, and are not inclined to believe that they can learn from older people.

Some have characterized start-ups as: “projects masquerading as companies”. There is a lot to be said for this. Many start-ups get to the point where they see that they can not function as a full-blown company, and sell themselves, or their intellectual property, to a larger, fully-functioning company with the financial assets to actually profit from the start-up’s work. The founders usually cash in, the work force is out of a job, and have little to show for their efforts in terms of the sale of the company.

Start-ups are great experience for some. They are very painful for most, given the high percentage of failures. Even with mentoring, the likelihood that a new company will survive very long is pretty low. People working for these sorts of companies should be fully appraised that promises about future wealth are just that—promises, no more.

While older folks can help start-ups in some ways, new technologies which are, in effect, leap-frogging older technologies (like smart phones replacing laptops and Google Glass replacing smart phones) are usually not inventive enough in their thinking to be of much help in steering product development.

The article does bring up a good point about the need for older people being involved in the business model for the accelerated growth of Silicon Valley business. The Venture community would have a lot to say about that change to their “sink or swim” model that seems to work for them.

Companies that have not piqued the interest of the VCs would be wise to seek out the guidance of older, successful, business people, however.


Like this comment
Posted by middle-aged scientist
a resident of College Terrace
on Sep 7, 2014 at 1:45 pm

The recent college graduates who begin start-up companies may want to consider hiring employees older than 35, who would bring a wealth of experience.


Like this comment
Posted by Thomas Jensen
a resident of another community
on Sep 12, 2014 at 10:44 am

Thomas Friedman published an OP-ED in the New York Times Sept. 9 entitled "It Takes a Mentor" that reinforces what Ms. Kenrick writes about. Web Link
I hope thousands of educators and business people read both Ms. Kenrick and Mr. Friedman’s articles. Too often educators don’t integrate mentors into class because they don’t have the time or don’t want to. Business people should more fully realize how valuable their mentoring is to young people.


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