Why Being a Mentor and an Entrepreneur is a Giving and Getting Experience
Posted on 24. Aug, 2012 by Ira Yellen in angel investing, Blog, business development, community, entrepreneurs, Health Information, innovation, Recent Company News, technology
Lessons Learned
Over the past five years, I have been mentoring dozens of start-up (companies in Connecticut in conjunction with Yale Entrepreneurial Institute, Connecticut Technology Council, and Connecticut Innovations. This summer, I also have the privilege of being a judge and a mentor at 2012 MassChallenge (MassChallenge.org) in Boston. It is one of the premier accelerator programs for emerging ventures and companies in the world. Ten winners from 120 finalists, selected from 1,200 entries, from around the world from the profit, non-profit, and social enterprise ventures, will share $1 million in prize money. I see first-hand many of the challenges entrepreneurs face. They are laser-focused on getting their new ventures off the ground in any way possible — bootstrapping, family and friend support, and early stage investment. They are busy finding talent to address their technology, business and marketing challenges. These entrepreneurs represent our future. When I started my business, I also needed mentors to learn from. It is my turn to give back. I want to share with you some of the ways that I try to help start-ups. I hope you find my experiences useful and I am pleased to see that some of the ventures I have mentored and worked with are succeeding.
Mentoring at MassChallenge
It is important to understand the difference between building a business and creating products that grow that business. But for most start-ups, most of the emphasis is creating products. Keep the essence of the product simple to understand. Ask yourself: Does the product have a unique value and benefit in society? Who is the customer? Who are the competitors? I often see start ups focusing on the product development, to the detriment of not analyzing the market and the customer. The phrase “If you build it, he will come” from “Field of Dreams” comes to mind. The odds of success are very low if this approach is taken.
Answer the Following:
Why is there a need for our new product? Does the product fill a unique niche or need in the marketplace. One of the most important criteria that start-up companies must define is the demand for its new product(s) or technology, in its intended markets and customers. Thorough primary and secondary market research must be done before launching into product development. All too often, thorough market research gets put off until the product and its technology is ready for field and beta testing. Too often, start-ups then learn the hard way that they have to do some major rethinking or reworking the product they thought would work. At that point, new funding and talent could be more difficult to obtain.
Who are the primary and secondary customers? Primary customers are the actual people WHO that will make the decision to buy your product or service. Secondary customers influence that decision.
What business model will we use to deliver product to these key audiences? There are many models to use to reach customers; defining the right one will be key to determining the logistics of reaching your audience segments. For products, will it be a business-to-consumer model, or business-to-business, or through distributors? For new technology, will it be licensing or white labeling, for example.
Where are the optimal, target geographic markets? Is it domestic, international, regional, state, or local? This will help define the size and scope of your market – and the distribution system challenges.
When will the product be ready for the market? The answer to this question helps determine a realistic schedule of events to gauge when your product, service or technology will be ready for prime time.
Investors, hiring talent, and marketers will ask these critical questions as well. Having answers, backed up by solid market research, will help clarify business and marketing goals, while at the same time lend credibility to your need for future stage 1 or 2 funding or venture capital.
I Practice What I Preach
Being a mentor has also given me the opportunity to be an investor in start-ups, run my several companies, and to learn what and what not to do. At the ripe old age of 65 years (Yes, a Baby-boomer who grew up in the sixties) I have launched new start-up online company HomeCareMatchKiosk.com. After working with clients in the home care business, it became clear that helping consumers match up the right home care services for their aging parents was a growing market. The health care industry and our aging population will have to learn how to use online searching that benefits the provider and the consumer. Keeping loved ones at home will save consumers and the government millions of dollars in health care costs, if family members can find health care services they trust, and have it delivered at home, avoiding the current alternative—costly nursing homes.
Note: Starting Labor Day this year, the beta test will commence. I will keep you informed of the progress and challenges that I face.