Mentoring appears to be an essential factor in entrepreneurial success, as many incubators, tech hubs, and universities have programs to match startup founders with experienced veterans.
A new study by Michigan Ross Professors Jeffrey Sanchez-Burks and David Brophy surveyed 33 private and university entrepreneurial programs and shed some light on what makes a mentorship program successful. They found that while training, tools, and matching could be improved, a key element to success is when mentors and mentees have a learning mindset. That means they believe relevant skills can be developed, as opposed to someone being a “born entrepreneur.”
The study was funded by a Kauffman Foundation grant and co-authored by Thomas Jensen of Enterprise Future Network, Professor Melanie Milovac of INSEAD, and Ross PhD student Evgeny Kagan.
“This is an important finding because people who have a learning mindset — who believe that skills can be learned vs. being born with an inherent ability — appear more satisfied with the entire process,” says Sanchez-Burks, professor of management and organizations. “And satisfied people tend to stay engaged.”
In fact, programs with the most effective mentors have a strong culture of learning created by program leaders and mentors, and a sense of community around shared values. One of the study’s goals is to encourage these programs to share their successful ideas and measure what works and what doesn’t.
“We’re finding that keeping mentors and startup founders engaged takes a lot of TLC and hands-on attention,” says Brophy, professor of finance and director of the Center for Venture Capital & Private Equity Finance. “There’s a lot of inconsistency in how that’s done and it’s because these programs all kind of sprung up organically across the country. They’ve done some good things and not-good things, so this is an effort to break across those silos and learn from each other.”
Among their other key findings:
- Mentors need to be “all-in” for the relationship to be successful, and that requires monitoring by administrators. Programs that actively manage their mentor-mentee groups can identify these problems during the program and take action, but too few do this.
- Formal training and more interactions relate to mentee satisfaction with the program. This is particularly true for personal and video communication between mentors and mentees.
- Non-university programs are ahead of university programs along several important dimensions including training, the number of interactions between mentors and mentees, and the experience level of mentors.
- Mentees in both university and non-university programs would like more voice in mentor selection. The most common matching method — where the program selects mentors — is the least preferred.
- Finding qualified mentors is difficult, and administrators need to guard against allowing qualification standards to slip to reach the numbers they need.
“There’s a lot of goodwill out there from people who have enjoyed success and want to give back,” says Sanchez-Burks. “It’s really remarkable to see strangers helping strangers for no economic gain. It doesn’t happen in many places in the world. Universities and these entrepreneurial hubs are where the goodwill happens, and what we’re trying to do is help better organize and structure this gem.”
Says Brophy: “Our findings are instructive for anyone in a supportive role for established or incipient entrepreneurs — as advisors, coaches, or directors — and should be of interest to both academic and non-academic audiences.”