What role do you see for organizations like us, as incubators for entrepreneurs? What are some problems that we could solve?
I would say there are two top things entrepreneurs say they want – and this is consistent across countries – they want money (more capital) and they want a peer network. Being an entrepreneur can be extremely lonely… this is oxymoronic in some ways because entrepreneurs deal with people all the time, but many still struggle with the high level of responsibility.
If you are the founder, everybody’s depending on you, and if things aren’t going well – there are always ups and downs – you might not want to share that with your team, investors, coworkers, employees, or even with your family. You have this persona; you’re expected to be optimistic and solve things because everybody’s depending on you.
So, whenever you find a group of entrepreneurs that can come together and be supportive of one another, it’s tremendously effective. Incubators should give these folks a safe space to connect with each other and even share practical knowledge like, “Hey, how did you build your website?”
It could be more of the social group, too – like an informal support group. There, entrepreneurs can say to each other, “Hey, I’m having a rough day,” and someone else says, “I know what that’s like, let’s get together and don’t worry. It’ll be okay.” That kind of thing. It’s good for these people to reflect on their unique perspectives.
What makes a good incubator?
I had the opportunity to review a bunch of incubators and accelerators for the U.S. Small Business Administration several years back. They had this competition and I saw hundreds of incubators and accelerators pitch themselves to us. The ones that we determined were the best were the ones that had real strength – that weren’t just a copycat of some other successful model. (A lot of them were trying to follow a model from Techstars, for example.)
When incubators and accelerators tried to merely copy a successful model, most of them failed. The ones that I, and those on this judging panel, thought were best were the ones that took advantage of something unique about themselves – usually it was their location. They would say, “We’re located in a rural location, we’re not gonna try to make a Silicon-Valley-style model; we’re gonna take advantage of the fact that our community has certain strengths that can be used in a new and different way.” I think the incubators and accelerators that recognize their unique competitive advantage, and are trying to serve their community and not just copy something that they’ve seen elsewhere, are the ones that do best.
The quality of the mentoring and coaching is also crucial. The biggest benefit that incubators and accelerators will add is the guidance they give to their entrepreneurs. Some incubators will put famous people’s names on their websites to say, “These are our mentors and coaches,” but those people aren’t really that involved. Maybe they’ll give a talk one day, but the entrepreneur never gets one-on-one time with them. We’ve had some of our Georgetown entrepreneurs deal with incubators and accelerators like that.
At the end of the day, incubators and accelerators have to recognize that the entrepreneurs themselves are the ones that make their company succeed or fail. Sometimes entrepreneurs don’t realize this and their expectations are skewed as a result. I’ve heard of people who run incubators that have their incubator graduates come back and ask, “How come I’m not raising a million dollars now? I went through this incubator, now I’m ready!” There are a lot of steps to take outside of incubator programs, no matter how good they are.
You mentioned that the quality of mentoring is crucial. What do you think are the three biggest obligations for mentors in order to turn out a successful entrepreneur?
Maybe the biggest thing, which should be obvious, but isn’t, is that the coaching should be focused on the entrepreneur’s success and not what the coaches might get out of it. There are some people that sign up to be mentors because they want to get a piece of the entrepreneur’s business somehow. Mentors need to have a “give first” mentality.
I think empathy is another thing that mentors really need to focus on. There are a lot of successful entrepreneurs out there who will tell you that they have their own experience of being successful and that they think everyone else should follow that model. We have a lot of coaches and mentors at Georgetown, and we have training programs where we teach them how to be good mentors. For instance, we teach the mentors that a big part of mentoring is not telling people what to do. Mentors should never say, “You should do this.”
There’s a difference between coaching, advising, and mentoring, too, and in the program we talk about how involved mentors are supposed to be with regards to helping the entrepreneur make their own decisions. Mentors should recognize that their role is to help the entrepreneurs, not do the job for them.
Related to this is the idea of “evidence-based entrepreneurship.” Entrepreneurship is a really complex thing; there’s not one formula that always works. People have opinions about everything, and the whole entrepreneurial process is based on a lot of assumptions that do not universally ring true. Assumptions aren’t really valuable in the long run – the best thing entrepreneurs can do is gather evidence, verify a problem and its effects, and use their creativity to solve it..
This is why customer interviews are so important. An entrepreneur may think customers have a big problem that they can solve – that’s an assumption. Now, if the entrepreneur talks to 100 people and many identify a specific problem as something that affects their lives, then there’s proof of need. Mentors may have more experience running a business or identifying problems in society, but if there is no evidence, there is no evidence. The mentor should try to help the entrepreneur get that evidence.
Here at PalTechUS, we are dedicated to creating a sustainable tech ecosystem in Palestine. Part of that mission entails the creation or catalysis of support networks – such as those that Professor Reid discussed in this interview. These networks allow young entrepreneurs to share ideas and receive help from experienced business people. Furthermore, we wholeheartedly agree with Professor Reid that the focus of incubators and mentors needs to be on the entrepreneur and not the program or mentor themselves Lastly, we want to emphasize Professor Reid’s point about “evidence-based entrepreneurship.”: If we want to build Palestine together, we need to put aside our assumptions and follow the evidence so our entrepreneurs can succeed and so the beneficiary communities can grow.
