Bad advice is as old as the world itself. In the world of startups and entrepreneurship, the same, of course, holds true—the difference being that the availability and ubiquity of bad advice has exploded over the past few years. This is due to many factors, the primary one being the tidal wave of entrepreneurship washing across the country, which has brought to shore not only many great things, but also a great deal of flotsam and jetsam.
The tremendous personal broadcasting medium of Twitter, as well as blogs, have allowed for an extreme amount of entrepreneurship discussion and advice—so the bad and the good are now delivered via the same firehose and with the same breathless intensity. Who can you trust?
In general, this explosion of entrepreneurship information is terrific—and it's in great contrast to the utter lack of information and access that was available, say, when I was a freshman in college some 25 years ago. In fact, we’re now living in an era wherein universities, local governments, and countless organizations have taken up the mantle of entrepreneurship and are providing mentorship, venture showcases, competitions, co-working spaces, and entrepreneur-in-residence programs galore. Many of them are excellent. But we’re living in a world where if you're an administrator at a university or in local government and you don't provide programs like these, you are now scrambling to keep up and avoid "looking bad." Real problems start to arise when “not looking bad” is your primary motivation and unqualified people start slapping programs together.
These hastily put together programs are a real phenomenon and an unforeseen outcome of this entrepreneurship explosion. You now have tons of longtime bureaucrats and administrators around the country (who know nothing of startup culture) overseeing these programs who actually have little or no filter to determine the wheat from the chaff in terms of who they invite to participate. As a result, I’ve both seen for myself and heard (from friends and acquaintances around the country) of a multitude of instances of ridiculously bad advice being offered in programs like this.
It’s tragic, because in the end, fledgling and impressionable entrepreneurs often end up acting on this advice and destroy or harm their own companies, sometimes before they really even get started. The administrators often have no clue that in their efforts to provide these services they are actually damaging people’s lives in an effort to make themselves “look good."
Here's a list of red flags to watch out for when you join an organization looking for advice on your startup:
- You go in to talk about your consumer Internet startup and the first person you get paired-up with as a “mentor” is an IP attorney who encourages you to file some patents and “protect your idea.” (Translation: No one knows what they’re doing here—consumer Internet is not patentable, and you better start running away fast.)
- You go in and the first person they pair you with is not an experienced entrepreneur or investor, but instead is a service provider such as an accountant, lawyer, or investment banker type. (Translation: The people running “the program” are clueless and these service providers typically just want your business. Get out of there.)
- The person/judge/mentor walking up to your table at the “venture showcase” you’re participating in is not an entrepreneur or investor but an unscrupulous broker-dealer. At first, you thought they were an investor, but after some interaction, they say they will help you with making introductions to investors and take a piece of your company and/or of the money raised in exchange for their efforts. (Translation: You’re being hunted. Start running.)
- The class instructors have zero entrepreneurial experience and are rigid in their application of the business model canvas and other curriculum. (Translation: You’re getting pushed through a useless program like cattle so someone else can look good. Get out of there.)
If you do join an entrepreneurship program, keep in mind that:
- Good entrepreneurship programs of any kind involving mentorship, entrepreneurs-in-residence, office hours, or competitions and showcases with judges should be populated by experienced and respected entrepreneurs and/or investors at their core.
- People have trouble “staying in their lane” and may give you advice on something that's outside their area of expertise. A good mentor will say, “Well, I can’t help you on that matter, but I know someone who can. Let me make an intro.”
- Although venture attorneys can be a great resource, a real entrepreneurship program should have entrepreneurs and investors at its core. The attorneys who participate should be the ones that are deeply respected by the startup community and who are totally focused on startups and venture capital and their life cycle.
- Lastly, it’s very important for you to become a part of your local startup ecosystem. This way, you’ll always be able to get good advice from the entrepreneurs building companies in your city. They are often the greatest source of actionable advice for you and your fledgling venture.
Dave Lerner is a serial entrepreneur, angel investor and host of Venture Studio. He's also a professor at Columbia University Business School where he teaches entrepreneurship.