Upon my return from the Skoll World Forum earlier this month, I started thinking about the mentorship gap in emerging markets. How could the inspiration I experienced at Skoll be shared in a more direct way?
In my capacity as executive director of the Aspen Network of Development Entrepreneurs, I speak to emerging market entrepreneurs and investors on a daily basis.
I continue to hear opposite refrains from both sides. The entrepreneurs complain about the slow flow of investment capital. The investors complain about the lack of good deals. Both groups are right. While there is plenty of money out there, early stage investment in emerging market companies is sluggish at best. And, while there are plenty of companies seeking investment, too few of them meet the standards of emerging market investors -- particularly on the equity side.
Here is where the paradox can be explained. Most of the companies seeking investment are not yet investible. They may have good ideas, strong client bases, and solid financials. But, they do not have the full set of business systems in place to placate investor requirements, and most have little experience pitching to investors.
While the road to "investability" for some firms is long and would require significant and costly interventions, in many cases, it would just take some moderate organizational improvements and upgraded positioning. The support of a trusted individual who has been there before and knows the ropes of building a company can address this gap, usually in a very cost-effective way.
Yet, for a number of reasons, finding suitable mentors and advisers to help navigate this process is particularly hard to do in developing countries.
Culture often inhibits these pairings. Entrepreneurs are typically a confident and independent minded bunch. They may hesitate to seek assistance due to pride or simply lack the custom of doing so. Compounding the problem, potential mentors, where they do exist, tend to focus on their own family members and close acquaintances. And, many who could serve as mentors, simply lack the training or awareness to do so.
Further, real concerns about protecting intellectual property may inhibit entrepreneurs from reaching out. In many countries, silence and secrecy is a much better strategy for IP protection than reliance on legal remedies. Trust comes at a high premium in most emerging markets. And this lack of trust creates significant friction in building new mentorship collaborations.
Even when both parties are eager to build new relationships, they often can't find each other. Most emerging markets lack both formal and informal linking mechanisms to help build successful partnerships.
Most developing country entrepreneurs can't rely on a strong alumni network, access local angel groups or call up a successful founder for assistance. Experienced coaches and mentors are scarce and hard to find. This challenge is particularly acute for female entrepreneurs seeking other women as coaches, as few emerging markets have a cadre of successful businesswomen to draw from. Similarly, there is a particular need for mentors with an understanding of both science and business to support engineering-based companies.
So how do entrepreneurs overcome these hurdles?
Fortunately, there has been a recent expansion of local and international mentorship platforms as well as support networks for emerging market entrepreneurs. Most local incubators and accelerators include coaching or mentorship as part of the service offerings. And, on a global basis, there are a growing number of organizations that provide linking services to mentors in multiple countries. Some organizations worth exploring include:
BiD Network, along with its partners, is active in 16 countries and provides a host of services to entrepreneurs, coaches, investors, business angels and service providers.
Global Social Benefit Institute (GSBI) at Santa Clara University
GSBI connects entrepreneurs with Silicon Valley mentors and has even outlined the type of values they look for in mentors.
MicroMentor is a free business service that matches small business owners with mentors. If you're a mentor or entrepreneur, MicroMentor will provide connection and training.
WeConnect coaches women business owners to help scale their operations and also connects them to peers to find and secure future growth opportunities with major corporations.
Mentors can rarely save a company from a bad strategy or unqualified management. Nor is their intervention sufficient to guarantee a home run, even when the company has solid fundamentals. However, they have proven to be a highly valuable and low-cost input into firm success. Entrepreneurs should seek guidance from experienced business people, and entrepreneurial support organizations should continue to build their mentorship programs, especially in emerging markets.