How entrepreneurs can choose the right consultant, advisor and mentor for their startup
The line separating a mentor, a consultant and an advisor is very thin and can often seem blurred, especially to a young entrepreneur building an infant startup.
According to serial entrepreneur and investor Sanjay Anandaram, deriving the right value from another person is only possible if one knows exactly what they are looking for where to find it.
In this episode of Prime Knowledge series, Sanjay speaks about the clear distinction between a consultant, an advisor, and a mentor and how young startup founders can make the right associations.
Who is a consultant?
“You approach a consultant when the job roles are specific and the objectives are clearly defined,” explains Sanjay.
A consultant brings expertise that you or your team might be lacking. They will work for or with you until that objective is met.
Once completed, a consultant generally moves over to the next company who requires similar expertise and does not come to you again unless you need something in that specific space once more.
For instance, if your business expertise is in fashion, you may hire a tech consultant to design your webpages or mobile application. You will have clear goals, set a timeline, specify a budget, and expect deliverables.
The contract will end as soon as your site or application is ready and live, and the consultant will immediately take their expertise to another firm.
Who is an advisor?
According to Sanjay, “When your objectives are not well defined or the path ahead is currently vague, you will need advice to walk in the right direction.”
The job of an advisor is to provide recommendations based on their expertise and help you and your team to learn to navigate the market.
The relationship is typically short-term and a monetary transaction is involved.
Consider the following questions for the fashion business. How can you strategically market your product in this crowded market? What should be your fundraising tactics and who are the potential candidates? Which type of designers should you be hiring to be able to compete with the existing brands?
There are no crisp immediate answers to these queries with deliverables or deadlines. Hence, you get an advisor on board to tap into their expertise continuously.
Who is a mentor?
A mentor is someone who helps you to rise above. “This person is an advisor, coach and consultant at the same time. To a mentor, you can take your moral, business, and ethical dilemmas and get clarity of your thought process,” explains Sanjay.
Generally, the relationship is hinged on the transfer of wisdom and no financial transactions are involved. Mentors look to give back to society and people who want to share their stored proficiency.
Young CEOs soon start to feel the heat of the market where technologies, customer tastes, investor expectations, and employee productivity change rapidly.
These give rise to dilemmas such as whether the business is worth it, will the company ever find success, if you are CEO material at all or was it all a big mistake. Mentors step in here to provide clarity. They help you to rise above the dark clouds and see the sunshine above.
CEOs must see the fine line
As evident, an advisor cannot predict and assuage your fears about business failure. The mentor cannot build your website and the tech consultant cannot give you strategic suggestions about marketing. All CEOs must take the right question to the right people to get back valuable answers regarding their startup.
Identifying the fine line is crucial for taking advantage of each role and involving every person depending on their specific expertise. The conversations will also have depth as the CEO will be clear of what to expect from whom.
However, it is also important to state that these functions are merging in the modern market. Consultants are increasingly becoming advisors and advisors are dawning the role of mentors. Modern CEOs may look at partnership as a helpful term as long-term meaningful associations often bring valuable benefits.
Still, clarity among a mentor, consultant and advisor should form the base of building the relationship with the gradual development of a partnership.