I have spent the last 19 years mentoring entrepreneurs. Each week I sit down face-to-face with half a dozen startup founders to work through issues and opportunities and to share advice, so I've often wondered why some founders turn that advice into action--which in turn increases performance--while others don't.
Researchers Aaron Chatterji, Solène Delecourt, Sharique Hasan and Rembrand M. Koning recently published the results of a two-year study of 100 growth-stage startups in India. Their goal was to examine the conditions under which advice improves startup performance. Here are three major lessons from the study and one from my own findings:
1. Look for mentors who deploy an "active" people management style.
The study, published as a working paper earlier this month, found that an entrepreneur who receives advice from a peer who is an "active manager" is 28 percent more likely to see their company grow, and 10 percent more likely to survive.
An "active manager" is defined in this study as an experienced, successful founder who institutes meetings regularly, sets goals consistently, and provides frequent feedback to teammates. The alternative, the "passive manager," is an entrepreneur who approaches management with a more laissez-faire perspective.
2. Build a relationship with a local mentor, who is able and willing to commit to regular check-ins, some which should be face-to-face.
While startup ecosystems differ city by city, the research found that in order to get the most out of advice, both parties should reside in the same city. This confirms prior research that showed that regular, consistent, face-to-face meetings with mentors are the most impactful. This is presumably because it's less costly and easier to maintain a relationship with a mentor when they are physically proximate.
3. Don't let prior formal training stop you from being open to informal advice that comes from experience.
Accelerators and business schools market their ability to help entrepreneurs succeed. But new research shows that both an MBA and accelerator experience may actually undermine the impact of peer advice.
This counterintuitive finding intrigues me. The researchers found that formal training from business school or a startup accelerator actually lessened the impact of advice on startup performance.
The authors hypothesize several explanations for this. Perhaps entrepreneurs without formal training are more open to advice. Perhaps founders with training feel they need less outside advice. Or perhaps formal training makes founders more resistant to learning from others.
4. Seek advice only from those who have accomplished your current goal.
A few years ago, I published research on incubation and acceleration. From that work, we learned that entrepreneurs are more likely to absorb managerial advice when that advice comes from experienced, successful founders who have not only "been there and done that" but who have generated tangible success (i.e., a successful exit) as a result. That research showed that those mentored by successful founders outperformed those mentored by professionals without firsthand startup experience.
For many years, mentorship has been hailed as the secret ingredient that separates successful startups from failed ventures. This research shows that not all mentors are created equal, while simultaneously illustrating how to get the most of the time you invest in informal advice-seeking.