To Boost Growing Small Businesses, Start MentoringEric Hippeau
(This column has been corrected to identify the author as a former managing partner at SoftBank Capital.)
Small businesses will play a pivotal role in creating jobs and helping our economy get back on its feet. Policymakers can help, particularly if they recognize their unique position to assist growing companies in scaling up. And nothing can give mid-to-late-stage entrepreneurs a better leg up than connecting them to business leaders and all the resources they command.
To that end, New York City took a bold step on Dec. 6 when it launched its Venture Fellows Program to pair entrepreneurs with leaders of established businesses for a year of mentoring at no charge. The program is a smart and efficient way of spurring businesses to create next-generation jobs in such growing sectors as media, health care, and fashion. (Picture the possibility of coupling Foursquare founders Dennis Crowley and Naveen Selvadurai with Richard Sarnoff, co-chairman of the U.S. arm of Germany's Bertelsmann, all of whom are participating in the program.) In all, the 23 fellows include GKIDS founder Eric Beckman and Gilt Groupe founder Alexandra Wilkis Wilson, while mentors include Pepper Financial Chief Executive John Tognino and myself.
Launching startups requires folks with ideas, passion, and energy, but scaling them takes management expertise. Even the most skilled practitioners run up against sharp challenges that can seem insurmountable. Entrepreneurs are by nature self-motivated, but all successful business leaders have at one time or other benefited from people they learned to trust. Mentors provide unique intellectual capital: wisdom and worldview, plus inside access to networks of friends, colleagues, resources, and higher-order capital.
The Venture Fellows initiative demonstrates the power of leverage, of taking small steps that can snowball into something bigger. Rather than rely only on financial incentives to spur the private sector, the program unlocks the forces of human nature: the desire for people to connect, share, help, and inspire.
Other nonprofit programs such as Score, the nationwide small business resource recognized by the Small Business Administration, provide counsel to thousands of entrepreneurs. What makes New York City's mentoring initiative different is that it capitalizes on what only local governments can do: grant access to powerful people within the community.
After years of successfully engaging its business leaders, New York can now mobilize them to help support the long-term economic health of the city. The Venture Fellows program taps into an established network of accomplished CEOs—many of whom maintain investments in emerging companies and ties to other sources of funding.
New York City recognizes that building human capital is as essential to its economy as building infrastructure. But it shouldn't take a government program to remind us that even talented entrepreneurs can use assistance. Few budding entrepreneurs have the built-in advantage of a corporate network—executives and industry partners who can supply information, experience, and connections.
Most entrepreneurs come from outside their industry and have thrived because they didn't know they were breaking the rules. This tendency to operate outside of convention makes them indispensable to an American economy that has always relied on creative solutions. It also makes these nascent success stories a source of inspiration for more established corporate executives.
As someone who has mentored other entrepreneurs at least four times, I can vouch for the rewards of working with promising young executives. The partnering fulfills me on two levels: I get the satisfaction of feeling that I'm contributing something worthwhile, and I inevitably learn something. The old adage, "you don't know what you don't know," certainly applies here.
Most CEOs can point to people who gave them an added perspective and push when they needed it most. I was fortunate to have publishing giants Patrick McGovern, founder of International Data Group, and Bill Ziff, then chairman of Ziff Davis, take me under been their wings. Even today, as CEO of the Huffington Post, I rely on co-founders Arianna Huffington and Ken Lerer to temper my expansion plans with the day-to-day demands of the digital news business.
As a longtime venture capitalist, I've seen more than my share of fast-starting enterprises fizzle when it was time to expand. In many cases, the right connections could have provided the intelligence, know-how, and even financial resources to accelerate smart growth.
Now that revolutions in technology have rebooted entire industries, there's power in a united front: business, finance, government, and academia collaborating to fuel scalable, sustainable enterprises in high-employment sectors. Any city betting on entrepreneurs for economic growth would do well to watch New York's innovative new approach.