Startups and Mentors: Experience Never Gets Old
By Ashutosh Garg
Founder and Chairman of Guardian Pharmacies.
YPO member since 1994
Robert De Niro and Anne Hathaway’s 2015 movie, “The Intern,” provided a very interesting lesson for startups and entrepreneurs all over the world.
The message was very simple: Experience never gets old.
A majority of startups all over the world are founded by younger men and women in their 20s and possibly in their early 30s. While the ideas are excellent and their energy levels are great, many startups start to falter within a couple of years because of poor or inadequate control systems, over-aggressive scaling up, weak financial planning, and insufficient focus on people management.
At the same time, thousands of senior managers are retiring from the corporate world after spending decades in specialized and general management positions in major and smaller corporations yet, at this stage of their lives they clearly have at least another decade of work inside them. This aging and retirement of senior managers is happening in all parts of the world. These people know what it is like to run businesses and tackle the challenges of building businesses. They have functional expertise in finance and accounts, budgeting, packaging, branding, sales, human resources, governance, legal matters and general management.
There is a huge opportunity to bring together the vision of the startup entrepreneur and the experience of the experienced manager in an unobtrusive and nonthreatening manner. Not every senior leader has the energy or the risk-taking capability to start off on their own. The experienced managers, sometimes in the twilight of their careers, are not yet ready to hang up their gloves. They are looking to stay occupied, earn some money (which could be in the form an equity option as well) and give back their life’s learnings. Further, these leaders will be much more stable for a startup – they will not resign and walk away in a hurry because they did not like the way they may have been spoken to or because another exciting opportunity has come up.
In addition to watching the back of the startup entrepreneur and guiding them when the ship hits troubled waters, such individuals will also bring in strong subject-matter knowledge. They will also bring to the table their knowledge gained through years of experience in some important areas:
- Good governance practices: All startups should normally begin with the objective of building a strong and stable business which can mature into an institution. A strong senior partner will ensure that the entrepreneur will build good governance and transparent practices in the organization. Even something as mundane as ensuring board meetings are held on time and minutes are properly recorded is an area where startups have been known to slip up. This comment would not apply to those entrepreneurs who are looking to create a valuation and then flip the company to someone else.
- Fund raising: While most startups are looking for funding from angel investors and private equity investors, there is a large domain of raising funds from banks though debt and working capital financing. A good finance experienced manager will bring in much needed contacts and experience to reach out to the banking system.
- External relations: Most businesses, irrespective of the sector they are addressing, need a strong connect with the external world. These connections could be with bureaucrats, politicians, environmental activists or the local counselor. A strong and experienced manager will have the patience to handle these external challenges. This could also include developing a strong public relations contact program with the print and visual media – while another group of people would handle the social media contact base.
- Legal processes: In addition to hiring legal help during formation and fund raising, most businesses are faced with a lot of legal challenges. Once again, a more experienced manager will bring wisdom in handling such matters — which cases to pursue and which ones to drop — is a critical decision to save valuable managerial time, resources and of course, money.
- Playbook/standard operating procedures: In the hurry to get started, very often standard operating procedures get lost in the detail. These need to put in place very early in the game so that mistakes are not repeated. An experienced manager tasked with this will be able to put in place such a manual or playbook that would serve the company well into the long term.
Having mentored several startup entrepreneurs, I have seen the value a person who has “been there done that” can provide to a startup entrepreneur. For the entrepreneur, it is a very lonely job and there are very few people he can trust (other than a co-founder). Many young entrepreneurs need a sounding board in a nonthreatening manner with someone who has no agenda with the individual or the business.
I have often said that the combination of young energetic legs with grey hair would be a win-win combination for all startups. To draw a parallel from hockey or football, the entrepreneur is the center forward rushing to shoot goals and win while the older manager is the goal keeper who will protect the companies turf and ensure that self-goals are not scored!
What is important for both the parties is to mutually select the right set of individuals. What is important is to develop mutual trust and confidence between the two individuals to build a win-win combination for the success of the business.