Master Thesis
Mentorship: Do entrepreneurs and mentors think about mentorship alike? Student: Cuong Nguyen (Silver) – 10604588
Supervisor: Dr. T. Vinig and Yang Song
Abstract
This paper is about mentorship for entrepreneurs. It focuses on investigating perception about different aspects of the relationship between entrepreneurs and mentors and makes a comparison between the perception of entrepreneurs and mentors. The aspects of mentorship that this paper tackles include the perceived benefits of mentorship, relative importance of mentorship throughout the stages of new ventures, and criteria that mentors and entrepreneurs use to choose their partners (the respective entrepreneurs or mentors) in the mentoring relationship.
This paper combines both interview and survey approach. The interview with 6 mentors and 6 entrepreneurs results in a series of perceived benefits and criteria that they use. Based on that, the writer builds a survey to investigate this topic on a larger sample.
It is found that entrepreneurs and mentors do not share a universal perception of mentorship. Rather, their perception is driven much by their experience and expectations. Furthermore, they have some shared and non-shared criteria when forming a mentoring relationship. Even for those shared criteria, entrepreneurs and mentors also value them at different level
Table of Content Abstract Acknowledgement 1. Introduction ... 1 2. Literature review ... 2 2.1. Mentorship ... 2
2.2. Entrepreneurship’s determinants of success and mentorship ... 6
2.3. Life-cycle stages of an organization and mentorship ... 9
2.4. Choosing a partner in the mentoring relationship ... 14
3. Method ... 14
3.1. Interview ... 15
3.2. Survey ... 18
4. Discussion ... 24
5. Contribution, limitation and further research... 30
6. Conclusion ... 32 Bibliography
ACKNOWLEGEMENT
Dear fellow readers,
I am writing this as the last piece of work that marks the end of my MSc in Business Studies – Innovation and Entrepreneurship track at University of Amsterdam. This has been a special journey for me and I am grateful because I have been a part of the class with awesome professors, supervisor, and classmates. This is truly a life-changing experience for me.
Working on this thesis is yet another painstaking but joyful part of the journey. I did not have any research experience beforehand. However this fact does not stop me from being ambitious with my thesis: connecting the thesis to my future plan which is to help Vietnamese entrepreneurs to create more successful entrepreneurial endeavors. This is my biggest motivation that keeps me going with the topic of mentorship for entrepreneurs so far. However working on this topic is not easy since it has not been received much attention from academia, not to mention my very much inexperience with research. And this is the time when I am most thankful the substantial support from my supervisor Ms. Yang Song and Dr. T. Vinig.
Ms. Yang Song is the most dedicated supervisor I have met. She has been very patient to such a research “newbie” like me. I have to admit that many times I was lost with my thesis but each meeting with her makes me feel closer to my goal. After each of her feedback (for countless times) my thesis becomes a better one. Without her aid, I would have neither completed the thesis nor reach my expected goal. For this reason, I would like to express my deepest gratitude to Ms. Yang Song.
Dr. T. Vinig is my professor in Entrepreneurship who inspires me to be on the entrepreneurial journey. His class is always “entrepreneurial” with high amount of practicality and joys. Moreover, though he is not my direct supervisor but he has been giving much advice for my thesis. He also connected me to many organizations while I was struggling to find sources for my data. I would like to thank you for making my choice of the Innovation and Entrepreneurship the best choice ever.
Furthermore, I would like to acknowledge the support from start-up community in Vietnam especially Mr. Anh Minh Do from Tech in Asia for helping me very much with my data collection.
Last but not least, my family and my friends are always the most important people in my life who keep me accompanied and lift me up when I am down.
Best regards,
1 1. Introduction
“You don’t know what you don’t know” (anonymous)
Due to its nature of uncertainty, the entrepreneurial pathway always has many pitfalls. Entrepreneurs have to deal with these traps, stay in motion and make decisions regardless. However, the good news is that there are many experienced entrepreneurs who are willing to provide a savvy guide in form of mentorship that can help young and inexperienced entrepreneurs to make better decisions and stay away from mistake that is avoidable.
Mentorship has been a popular practice in corporate and academic environments (Kram K. E., 1985; Fagenson, 1989; and Andrewsa & Chiltonb, 2000). Mentorship is proved to have positive impacts on mentees or protégé allowing them to have a better and happier career (Roche, 1979), more career opportunity, recognition and a higher promotion rate (Fagenson, 1989). Mentorship enhances mentees’ career development and psychosocial development (Kram K. , 1983) by providing consulting, sponsorship, protection, role modeling, counseling, friendship, etc. (Kram K., 1983; Schockett & Haring-Hidore, 1985). As good as it is in corporate and academic environments, does mentorship really work in an environment featured with high level of uncertainty like new ventures? Some research has claimed mentorship’s positive impacts on entrepreneurs and the success of new ventures in multiple ways (Ozgen & Baron, 2007; Sullivan, 2000; St-Jean & Audet, 2012). However, this topic has not been studied intensively. The lack of literature possibly causes people to perceive mentorship for entrepreneurs differently.
Therefore in this thesis the writer plans to empirically compare the perception of mentorship from the point of view of 2 stakeholders involved in this relationship - entrepreneurs and mentors on multiple angles: benefit of mentorship, relative importance of mentorship in different phase of new ventures, their criteria to choose a partner (for a mentor to choose an entrepreneur and vice versa) to form a mentoring relationship.
Therefore, the research question is:
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To answer this question, the paper attempts to answer these following sub-questions:
- How is mentorship perceived to benefit the entrepreneurs?
- How important is mentorship perceived for each phase of a new venture? - What criteria do entrepreneurs use to choose their mentors and vice versa?
Answering these questions is important for stakeholders such as incubators, government, investors, entrepreneurs and mentors to understand i.e. how mentorship is perceived to benefit entrepreneurs and what entrepreneurs and mentors expect from a mentorship toward entrepreneurial success. From this insight, actionable strategies can be formulated to fully exploit the benefits of mentorship for entrepreneurs.
The thesis aims to answer these questions by both quantitative and qualitative approaches. After the review of core literature on entrepreneurship and mentorship, interviews are conducted with mentors and entrepreneurs to understand their perception about mentorship. Later on, surveys will be carried out to understand the perception in a large sample. Finally, analysis follows to answer the three questions above.
2. Literature review 2.1 Mentorship
Mentorship though implemented widely, its research mainly lies in the context of corporate and academics and little research is tailored toward entrepreneurs, which makes it difficult to totally base our paper on research of mentorship for entrepreneurs only. In the following part, the paper will review mentorship literature across academic, corporate and entrepreneurship contexts.
What is mentorship?
There are many definitions about mentorship such as “Mentoring is defined as a supportive relationship between a youth or young adult and someone who offers support, guidance and concrete assistance as the younger partner goes through a difficult period, takes on important tasks or corrects an earlier problem” (Flaxman, Ascher, & Harrington,
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1968), “A deliberate pairing of a more skilled or experienced person with a lesser skilled or experienced one, with the agreed-upon goal of having the lesser skilled person grow and develop specific competencies” (Murray, 1991). The term “mentor” which is popularly used in the management literature refers to a senior person who takes an interest in sponsorship of the career of a junior person (Kram K. E., 1985). Though mentorship is defined differently dependent on the context to which the authors refer, it can be seen that these authors all mention mentorship as the relationship that aims to support a less experienced person by a more experienced one in a certain context toward a certain goal. Therefore, it can be inferred that mentorship for entrepreneurs could be understood as an act of experienced people to help inexperienced entrepreneurs to achieve a certain goal.
Benefits of mentorship
The majority of literature in mentorship can be found in this area where authors explore the benefits of mentorship and explain how mentorship can bring these benefits from different perspectives. A survey with 1250 executives has revealed that executives who have had a mentor earn more money at a younger age, are happier with their career, and achieve somewhat great pleasure from their work (Roche, 1979). In another case, questionnaire investigating a random sample of 518 employees in healthcare industry in the US reveals that those individuals involving in a mentoring relationship as mentees are reported to have more satisfaction, career opportunity, recognition and a higher promotion rate than non-mentored individuals (Fagenson, 1989).
So how does mentorship benefit those mentees? Interview with 18 pairs of younger and older managers conducted by Kram (1983) has led to the conclusion that mentorship benefits entrepreneurs by enhancing career development and psychosocial development of mentees. The table (table 1) below shows different types of career functions and psychosocial functions that mentorship can bring to mentees according to Kram (1983).
4 Table1 Mentoring Functions (Kram, 1983)
Mentoring Functions
Career Functions Psychosocial Functions
Sponsorship Exposure and visibility
Coaching Protection Challenging assignments Role modeling Acceptance-and-confirmation Counseling Friendship
Mentorship provides sponsorship exposure, visibility, coaching, protection and challenging assignments to assist mentees “in learning the ropes of organizational life and in preparing for advancement opportunities” (Kram K. , 1983). Psychosocial functions of mentorship can impact the mentees directly as the mentors provide the mentees with a sense of acceptance, friendship, and counseling (Kram , 1983). Indirectly, mentors are considered a role model for mentees to learn and practice appropirate organizational behaviours (Kram , 1983).
In another attempt to illuminate the question about functions of mentorship in a different context, Schockett & Haring-Hidore (1985) come up with four psychosocial functions and four vocational functions in their surveys with 144 college students who were investigating careers in education, as follows.
Table2 Mentoring Functions (Schockett & Haring-Hidore, 1985) Mentoring Functions
Vocational Functions Psychosocial Functions
Education Consulting Sponsorship Protection Role modeling Encouragement Counseling Friendship
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The findings in academic environment are fairly similar to those in corporate environment by Kram (1983). With regards to psychosocial functions, it can be seen that both Kram (1983) and Schockett & Haring-Hidore (1985) have the same outcome. As per vocational function, both Kram (1983) and Schockett & Haring-Hidore (1985) agree on certain functions such as coaching, sponsorship, and protecting (though they have different wording for consulting and coaching they mainly refer to the same function). “Education” refers to technical skill and intellectual development acquired through challenging work assignment and constructive evaluation from mentors (Schockett & Haring-Hidore, 1985). For this point, Schockett & Haring-Hidore (1985) go one step further than Kram (1983) by emphasizing the evaluation after the challenging assignments while Kram (1983) just stops at the assignments. Schockett & Haring-Hidore (1985), however, do not mention “visibility and exposure” as they already explain it as one form of “sponsorship” that provides “good press” for mentees in the organizations.
Several authors such as Olian et al. (1998), Burke et al. (1991), and Scadura (1994) attempt to identify the relative importance of each function of mentorship. Olian et al.’s (1988) experiment shows that career functions of the mentors are regarded as second to their perceived ability to provide psychosocial support by the potential mentees. From questionnaire’s data, managers offer more psychosocial mentoring but not career mentoring to their mentees as compared to their subordinates (Burke, McKenna, & McKeen, 1991). While mentorship both support career development and psychosocial development, these finds show that psychosocial development is favoured by mentees and is considered to be foundation for the mentoring process (Scandura, 1994).
For entrepreneurs?
Research on mentorship for entrepreneurs is still limited and fragmented. Deakins and Freel (1998) in their research suggest the positive role of mentorship in supporting entrepreneurs. Mentors can help entrepreneurs to reflect from the happenings and absorb experience and knowledge from learning events (Deakins & Freel, 1998). In the same theme, Sullivan (2000) mentioned the importance of learning to small business survival and growth and that a mentoring relationship provides a chance for start-up to engaged in
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a reflective learning environment, which helps to increase the probability of success for new start-up. Mentoring can also help entrepreneurs to improve various effective learning and quality such as self-image, self-efficacy and resilience (St-Jean & Audet, 2012). Mentorship based on the point of view of Ozgen and Baron is one of the sources for opportunity recognition (Ozgen & Baron, 2007). Cull (2006) on the other hand, stresses on another aspect. According to his paper, working with mentor can lead young entrepreneurs to grow in confidence and becoming successful in both personal and professional aspects. However, this cannot be achieved without consistent support structures from the organization through all the stages from engagement till the time these young entrepreneurs achieving independence (Cull, 2006).
2.2 Entrepreneurship’s determinants of success and mentorship
Understanding entrepreneurship’s determinants of success is essential because it provides a framework for our research to see how mentorship can benefit entrepreneurs.
Determinants of entrepreneurial success is a popular topic for entrepreneurship research because of its direct impact on understanding entrepreneurship and its practicality in creating more successful entrepreneurial endeavors. However, different authors have different perspective and definition about entrepreneurial success in their research. In this paper, the writer will mainly focus on reviewing the factors that these authors propose under any definition of success that they use. Factors affecting business success or failure could be grouped into 3 categories: “(1) personal traits of the entrepreneur; (2) strategies and resource capabilities of the new venture itself; and (3) environmental condition of a new venture” (Lee & Lee, 2005; Brüderl, Preisendörfer, & Ziegler, 1992)
Organization’s strategies and capabilities
There is various research devoted to explore the different aspects of how strategy can make impact on the entrepreneurial success or failure. Organizational characteristics (number of employee and amount of investment), and organizational strategies are most influential determinant of business survival according to Brüderl, Preisendörfer, & Ziegler
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(1992). Drucker (1985) also emphasizes the importance of entrepreneurial strategy and that they ‘are important, they are distinct, and they are different’. Several strategies such as “Fustest with the Mostest”, “Creative Imitation”, “Entrepreneurial Judo”, and so on are discussed (Drucker P. , 1985). There is no one-fit-all strategy according to Drucker because different strategy has different level of risks, thus has different level of benefits.
With regards to firms’ capabilities, Thornhill and Amit (2003) support that there is a strong link between a firm’s capabilities and success; and that the failure of young firms stems mostly from their “deficiencies in general management and financial management”. Meanwhile, the failure of established firms relates to their inability to manage changes within their industry. In another article, the dispersion of resources and focus of a firm over a large market puts a big threat on the firm and over-investment in marketing differentiation strategy could burn out its resources and competence (Shepherd, Douglas, & Shanley, 2000)
Furthermore, not only during the time new ventures are in operation do organizational strategy and efficacy influence new venture success but the organizational strategy and efficacy also have impact on the success and failure of young ventures even before the time their products or services are explicitly established (Delmar, Shane, & Smith, 2002). The activities related to planning and creating legitimacy could reduce the probability of collapsing and increase the chance of establishing the venture (Delmar, Shane, & Smith, 2002).
Environmental factors
As an entity in society, new ventures also operate and interact with their stakeholders within an environment and thus, they are affected by the environment in a way. A firm’s capabilities to mobilize resources, win customers and pinpoint entrepreneurial opportunities depend on the external network because social relation structures transaction and organizational legitimacy in the society (Granovetter, 1985). In another research, Lee, Lee, & Pennings (2001) also discuss how the external network affects the success of entrepreneurs by categorizing the network into partnership-based linkage and sponsorship-based linkage. They come to the conclusion that partnership
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based linkage has statistical influence on performance of new venture and especially the linkage to venture capital directly predicts the start-up’s performance whereas sponsorship-based linkage does not have effect on performance except the case that sponsorship-based linkage is toward financial institution (Lee, Lee, & Pennings, 2001).
Besides network, the social and economic environments also influence the success of new ventures. A typical life cycle of a firm expands or shrinks dependent on the health of the economy. A recession can force many firms which are not effective enough in their own industry to close (Welbourne, 2006). On the other hand, social legitimacy and resources from the environment are considered to be fuel for survival and growth of new ventures (DiMaggio & Powell, 1983). Entrepreneurs should earn them by tailoring itself and satisfying requirements from the institutional environment (DiMaggio & Powell, 1983). The perception of the environment is also as important as the environment itself since Lee and Lee (2005) prove that entrepreneurs from failed ventures perceive the environment to be less competitive than it actually is.
Entrepreneurial traits
This category of factors discusses the success and failure of new venture related to the characteristics of the entrepreneurs themselves. The characteristics of entrepreneurs such as education and industry experience display strong direct and indirect effects on their new venture’s success (Brüderl, Preisendörfer, & Ziegler, 1992). For example, the accumulated experience suggested by the age of entrepreneurs could benefit new venture’s performance (Bates, 1990). However, there is also the opposite literature that denies the importance of experience in contributing to entrepreneurial success. Prior experience variable “no longer shows any explanatory” as an influence on entrepreneurial success (Roure & Keeley, 1990). The contradiction can also be found when it comes to education. Bates (1990) claims that the higher education level means the higher probability of survival of venture. Lussier (1995), on the other hand, states that successful entrepreneurs have lower education level than failed entrepreneurs.
The psychological characteristics also matter in this sense. Begley and Boyd (1987) point out how different psychological characteristics of founder and non-founder members
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in start-up might affect its performance. For example, the medium risk-taking level of founders is associated with high “Return on assets” (ROA) but when the level is high, ROA decreases (Begley & Boyd, 1987). The same pattern also applies to the case of tolerance for ambiguity and growth rate in the non-founder members (Begley & Boyd, 1987).
Mentorship as a determinant of success?
Mentorship is proven to be beneficial to entrepreneurs in multiple ways (Deakins & Freel, 1998) but where is it in the 3 categories proposed by Lee & Lee (2005), and Brüderl et al. (1992)? This question will be answered below.
The paper takes a popularly cited article as a sample for our reasoning. A mentoring relationship provides a chance for start-up to be engaged in a reflective learning environment, which increases the probability of success for new start-up (Sullivan, 2000). “Learning” is an umbrella word and in this case could be related to either learning about managing strategies (working with customers, better their products), or dealing with environment (building good networks) or improving entrepreneurial traits (formulating entrepreneurial team, being more effective). Therefore, from previous research we can see that mentorship cannot be classified into one single category of entrepreneurial success determinant but all three. Specifically, mentorship can support the entrepreneurs in dealing with either improving organizational strategy and capabilities, dealing with environmental factors, or improving their entrepreneurial traits.
2.3 Life-cycle stages of an organization and mentorship
The review of this life-cycle stage literature provides an academic framework for our effort to understand the relative importance of mentorship for each of the life-cycle stage of a start-up.
The taxonomy of an organization life has alsen a significant aspect that receives much attention from researchers. In their research, they use different terms to refer to different stages/phases of an organization life such as life-cycle stages (Adizes, 1988; Miller, Friesen, & Mintzberg, 1984; Smith, Mitchell, & Summer, 1985), growth stages (Kazanjian, 1988; Scott & Bruce, 1987) or developmental stages (Churchill & Lewis, 1983;
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Galbraith, 1982) which are found to be used interchangeably and bear no difference as the way it is used in this paper.
In their paper, Hanks, Watson, Jansen, & Chandler (1993) make a summary of 10 popular growth stage models from birth to decline (Table 3). There are different models with different number of stages ranging from a three stage model (Smith, Mitchell, & Summer, 1985) to 4 stage one (Kazanjian, 1988) (Quinn & Cameron, 1983) , 5 stage one (Galbraith, 1982) (Greiner, 1972) (Miller, Friesen, & Mintzberg, 1984) (Scott & Bruce, 1987), 7 stage one (Flamholtz, 1987) and even a more complex model with 10 stages (Adizes, 1988). The 5 stages that (Hanks, Watson, Jansen, & Chandler, 1993) used to classify these models are totally “made in the interest of parsimony and ease of comparison”. All of the models cover stages related to the start-up, expansion and maturity of an organization. Five models (Adizes, 1988; Churchill & Lewis, 1983; Smith, Mitchell, & Summer, 1985; Scott & Bruce, 1987; and Kazanjian, 1988) do not cover diversification stage. Only three models (Adizes, 1988; Flamholtz, 1987; and Miller, Friesen, & Mintzberg, 1984) have at least one decline stage. Stages related to this decline period are hardly mentioned as the impact of decline on organization structure is less predictable than impact of growth and the onset of decline may emerge at any stages of an organization’s life cycle which does not necessarily lie after diversification stage.
Life-cycle stages are multidimensional as each author describes these stages on different dimensions including age, size, growth rate, structure form, formalization, centralization, and business tasks shared by these models at each stage (Table 4) (Hanks, Watson, Jansen, & Chandler, 1993). As the organizations become older in age and larger in size, their structure form goes from simple to functional and to divisional which implies more specialization. As a result of having more divisions, the decision making also becomes less centralized.
11 Ta ble 3 C om parison of L ife -C ycle S ta ge M od els: Names a nd Nu mbe r of S ta ges (Han ks, Wat so n, Ja nse n, & Ch an dler , 1 99 3)
12 Ta ble 4 L ife -C ycle S ta ge Ch aracte rist ics: C om mo n P at te rns
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Life cycle model and mentorship
There has been no article researching the relationship between mentorship and the life cycle of a start-up. This paper will attempt to identify the relative importance of mentorship for each stage of the life cycle model through the perception of both mentors and entrepreneurs.
In order to do so, first of all, this paper will employ the Phases of Management model (Table 5) (Churchill & Lewis, 1983). This Phases of Management model displays a small businesses cycle based on businesses’ needs and challenges during each particular phase and the relevant management and leadership skills that entrepreneurs in turn need to take. There are 6 stages: conception, survival, stabilization, growth orientation, rapid growth and resource maturity. This paper chooses to use Churchill and Lewis’ Phase of management model as a framework for analysis for several reasons. First of all, this popularly cited model focuses on the first stages of an organization (start-up stage, expansion stage, and maturity stage according to Hanks, Watson, Jansen, & Chandler (1993) which is totally a fit for our objective to investigate mentorship for entrepreneurs. While focusing on a few stages only, it is also easier for the research participants to understand under pressure of time when taking a survey. Secondly, the distinctive and predictable phases in this model do not necessarily happen sequentially. This is an important as it reveals the fact that many small businesses can “hack” their growth if they have good enough capabilities and strategies. This is also proven by Deakins & Freel (1998) as “learning and ability progress in a series of disconnected “jumps” which depend on the experience of the entrepreneur”.
14 2.4 Choosing a partner in the mentoring relationship
As mentorship is proved to benefit entrepreneurs, it is important to understand how these entrepreneurs and mentors choose their partners when forming a mentoring relationship. Knowing these criteria can be fruitful to encourage more mentoring relationship to happen. This line of research, however, is humble and focuses mainly on the benefits and costs of mentors to participate in mentorship. People can benefits in different aspects as being a mentor. Though it is normally consider that mentees learn from mentors in a mentoring relationship, research proves that mentors do learn new perspectives and knowledge from mentees and mentor can have better job performance as a result (Eby & Lockwood, 2005; Mullen & Noe, 1999). Secondly, contributing to the success of mentees provides mentors with personal satisfaction and gain recognition amongst their colleagues for helping young individuals (Eby & Lockwood, 2005; Allen, et al., 1997). Furthermore, mentorship forms a close tie between mentors and mentees which leads to potential support for mentors especially in the case of mentees’ advancement in the organization (Kram K. E., 1985; Ragins & Scandura, 1999).
3. Method
The thesis utilizes the combination of qualitative and quantitative approach to explore the perception of the role of mentorship from entrepreneurs and mentors. Given that mentorship is a popular practice, its application in entrepreneurship, however, has rarely been studied in-depth. This makes the choice of interview an appropriate approach
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to identify and understand the full spectrum of mentorship. Insights from interviews are used to formulate the survey which aims to understand different perception of mentorship in a larger sample.
3.1 Interview
Sampling
Purposive (Stone, 1978) and snowballing referral (Welch, 1975) sampling methods are applied in this thesis. Both interview and survey are conducted with mentors who have been mentoring entrepreneurs; and entrepreneurs who have been started or intend to start their company; which allows the thesis to make a comparison between those two targets’ perception about mentorship.
The sample consists of 6 mentors and 6 entrepreneurs. Among 6 mentors, 3 are from Vietnam and 3 from the Netherlands. 3 of 6 entrepreneurs are also from Vietnam and the rest are from the Netherlands. This choice of nationality allows the paper to embrace diversity of geographic and cultural background in our sample. Moreover, among 6 entrepreneurs, 3 have worked with mentors before and 3 have not, which enables us to combine both the perception of entrepreneurs who did involve in mentoring relationship and who did not.
Data collection, coding, and analysis
The semi-structured interviews are averagely 30-45 minutes long and consist of open-ended questions. Participants are asked about the benefits that mentorship brings to entrepreneurs, their motivation to engage in mentorship (if any), and their criteria to choose a mentor (if they are entrepreneurs) or an entrepreneur (if they are mentors) when forming a mentoring relationship. In addition, participants were also asked about their background, their entrepreneurial journey. These questions were intended to identify emergent patterns of reasoning from the data. The interviews were conducted in 2 patches: the first one consist of 2 interviews, served as the direction and adjustment source for the next 10 interviews.
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The interviews were recorded upon the acceptance of the participants, and then were transcribed by the author. Some interviews conducted in Vietnamese were translated into English. Following the transcription, the data were coded into categories using NVivo. There were 2 code categories: benefits of mentorship and criteria to select a mentor/an entrepreneur. In the first code category, there are 3 groups of code: Organization’s strategies and capabilities, Environmental Factors, and Entrepreneurial traits. This categorization inspired by how Lee & Lee (2005); Brüderl, et al. (1992) classify determinants of entrepreneurial success. In the second category, there are two groups: criteria from mentors and criteria from entrepreneurs.
Results
Analysis of the interview data resulted in these main findings.
Perceived benefits of mentorship (Appendix 1)
First of all, different people (both entrepreneurs and mentors) have different points of view about how mentorship could benefit entrepreneurs depending on their own personal experience with mentorship which could be direct or indirect. For example, when talking about the role of mentorship, interviewee 2 only mentioned the role of mentor as a referrer to customers and network as this was his real experience with mentorship: “Mentors are those who have much experience and relationship with other people in the field. My mentor is directly one of my customers. He also introduces me to his network and brings me a lot of customers. He is truly an evangelist for my company” (Interviewee 2). Interviewee 4 perceived the benefits of mentorship not through a past mentoring relationship but indirectly through reading or witnessing mentorship: “I didn’t have a mentor so this is just my point of perspective. I read it somewhere or I heard it sometimes…It could be problem with marketing, product, customer understanding, finance…A mentor should sort them out case by case with entrepreneur” (Interviewee 4). For some people without mentorship involvement beforehand, their perception of mentorship is associated with their expectation of the way mentorship can help them. For example, Interviewee 6 has no mentorship experience, but he expects and thus, perceives that mentors can help him to overcome traps during scaling a business: “Also I didn’t have
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much experience in scaling a business and I cannot visualize all the traps during this stage such as equity policy and human resources…I expect mentors to help with these aspects” (Interviewee 6)
Secondly, several patterns emerged from the quotes in each code allows the researcher to form 10 sub-codes.
Entrepreneurial Traits: 2 patterns of statements coming from this group emphasizes
the fact that mentorship can help with the expectations that entrepreneurs must have to deal with challenges on the entrepreneurial journey and the right attitude to deal with that fact; and those focuses on personal attributes that enhance entrepreneurs' interactions and performance. These two groups are named ‘Expectation and Attitude’ and “Soft skills”
Environmental Factors: Firstly, prestigious mentors are mentioned to improve
start-up brand especially when working with investors. Also the network that mentors have enables them to connect entrepreneurs to key resources, tool and people (including potential customers, investors) which could help these entrepreneurs.
Organization’s strategies and capabilities: there are several patterns emerged from
the statements in this category. Those statements mention the role of mentorship with regards to consulting and co-create different strategies with entrepreneurs. The respective groups are formed based on the subject of these strategies which include: Customer understanding and product, Marketing, Finance management and Capitalization, Human resources, Growth, and Execution of strategy.
Criteria to form a mentoring relationship (Appendix 2)
The two sets of criteria that these entrepreneurs and mentors use to select their partners are different. However these two sets share several similarities (Figure 1). Both mentors and entrepreneurs think that industry relevance, shared mission and values, match in personality, commitment, entrepreneurial record and the amount of equity required are important criteria in choosing their partner. Although no mentor mentions that in the interview, for entrepreneurs, having a mentor that has large network that can potentially connect them to someone they need such as investors is important. On the other
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hand, mentors considered values that the start-up brings to society, their chance of success, and the stage of the start-up significant factors in their decision making.
Figure 1 Venn diagram of criteria employed in choosing a partner for mentorship 3.2 Survey (Appendix 8)
Hypothesis
Due to the fragmented and humble literature on mentorship for entrepreneurs, there are possibly different perceptions about mentorship. Therefore, first of all, we compare the perception between mentors and entrepreneurs about different aspects of mentorship.
Hypothesis 1: Mentors and entrepreneurs have the same perception about benefits of mentorship for entrepreneurs.
Hypothesis 2: Mentors and entrepreneurs have the same perception about the importance of mentorship for each stage of new ventures.
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criteria they use to form a mentoring relationship which are industry relevance, shared mission and values, match in personality, commitment, entrepreneurial record, and equity.
Furthermore, the paper also attempts to process the collected data in multiple ways to find possible emergent patterns.
Sampling
We survey totally 225 people including mentors, entrepreneurs (who are involved in a new venture both as a member or a founder and people who intend to be entrepreneurs from different industries). Out of that 151 valid responses are selected for analysis after eliminating incomplete answers. Among 151 survey participants, 36 are mentors, 115 are entrepreneurs. Furthermore, among 115 entrepreneurs, 60% are currently involving in a start-up, 40% intend to start their company in near future, 74% have worked with mentors and 26% have never worked with a mentor before. 39% are in ITC (information technology communication industry), 19% are in consumer goods, 19% are in automotive, and the rest of 23% are scattered in other industries.
Data collection, coding, and analysis
The surveys are created based on the data collected from the interviews. The survey is highly customized toward mentors and entrepreneurs by using skip logic question. It consists of multiple choice questions, and multi-point scale questions. The survey aims to collect the following information.
Demographics of participants: gender (optional), country, industry, entrepreneurial experience, and mentorship experience.
Perceived benefits of mentorship (grading from 0 to 100 for each of the benefit).
Perception about relative importance of mentorship for each stage of the new venture (grading from 0 to 100 for the importance of mentorship at each stage).
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Criteria to choose a mentor (for entrepreneurs) or an entrepreneur (for mentors) (grading from 0 to 100 for each criterion).
Equity that entrepreneurs are willing to offer to mentors/Equity that mentors expect (grading from 0% to 20%).
Though equity is a shared criterion for entrepreneurs and mentors to choose their partner, it is made to be a separate question. In doing so, we can not only assess how important equity is to mentors and entrepreneurs but also quantify the amount of equity mentors expect and the amount entrepreneurs are willing to offer
In order to reach a large number of responses, the author cooperates with Tech in Asia (www.techinasia.com) an online media website that provides daily news about start-up in Asia. This partnership helps the author to reach a good pool of entrepreneurs and mentors.
Finally, the data is then put into codes and sub-codes in line with those used in the qualitative analysis to see the representativeness of each code and sub-codes.
Hypothesis testing (H1, H2, H3)
The purpose of the analysis is to compare multiple variables between mentors and entrepreneurs for three questions. Secondly, the paper also explores the relationship amongst variables by examining whether they co-vary or not. There are totally 26 variables belonging to 3 categories (equivalent to 3 questions) which are coded with a specific capital letter (A, B, C, P, D) (Figure 2). In order to distinguish data from mentors and entrepreneurs, we will separate each variable into 2 respective variables. We would name data for mentors with letter ‘m’, for entrepreneurs with ‘e’. For example, expectation and attitude data from mentor would be called variable A1m and equity expectation from entrepreneurs would be variable D6e. Therefore, we would have totally 52 variables and 26 pairs of variables to compare. Each pair will follow the same analysis in the below order.
21 Figure 2 List of variables undergone analysis
- Normality test (D'Agostino & Pearson omnibus normality test): This test allows us to identify which variable is normally distributed and which is not.
- An F-test for the null hypothesis that two normal populations have the same variance is conducted for normal distribution pair of variables. This test aims to identify whether each selected pair of variable has equal or unequal variances. - Next, in order to come to the test that can provide us if the two variables in a pair
is significantly different from each other or not. There are three scenarios as described in the table 6.
- Correlation analysis: For each category of variable, a correlation analysis is conducted to identify to which degree and in which direction the variables in each category co-vary with one another.
22 Table 6 Lists of tests used on each variables according to their distribution normality and
variances
Distribution Variances Test to use
Non-normal Distribution Mann-Whitney test
Normal Distribution Unequal Variances t-test with Welch’s
correction Normal Distribution Equal Variances Unpaired t-test
Result
Normality test (Appendix 3)
Among 52 variables, there are 30 variables which are not normally distributed. Any pair that has at least one non-normally distributed variable will be treated as non-normally distributed pair in later analysis. Therefore, there are totally 2 normally distributed pairs of variables which A1e vs. A1m, and P3e vs. P3m.
F-test (Appendix 4)
The two normally distributed pairs A1e vs. A1m, and P3e vs. P3m are identified to have equal variances.
T-test, Unpaired T-test with Welch’s correction and Mann-Whitney test (Appendix 5)
From the result of normality test and F-test, we can decide whether T-test, Unpaired T-test with Welch’s correction and Mann-Whitney test is applicable for each pair for the significant difference test. The two pairs A1e vs. A1m and P3e vs. P3m with normal distribution and equal variances will go through unpaired t-test. The rest with non-normal distribution will go through into Mann-Whitney test.
Mann-Whitney test
Among 24 pairs of this group, there are 8 pairs that have significantly different components which are A5e vs. A5m, A7e vs. A7m, A8e vs. A8m, A9e vs. A9m, D2e vs. D2m, D4e vs. D4m, D5e vs. D5m, D6e vs. D6m.
23
Unpaired t-test
One out of two pairs in this group is identified to have significantly different components which is A1e vs. A1m.
Correlation (Appendix 6 and 7)
Correlation analysis is conducted on entrepreneurs’ variables and mentors’ variables in the 5 data groups A, B, C, P, D (If the data groups have at least one non-normally distributed variable, nonparametric correlation is used)
Several variables are found to co-vary. Among those, data group P for entrepreneurs and mentors shows a clear correlation patterns: from P1e to P6e, each variable is correlated with its preceding variables starting with P2e. The same pattern applies to data group P for mentors.
24 4. Discussion
How is mentorship perceived to benefits entrepreneurs?
Based on the findings from the qualitative research and the Phase of Management model (Churchill & Lewis, 1983), the paper proposes the following model (Figure 2) which describes how mentorship is perceived to benefits the entrepreneur at different stages.
The perceived benefits of mentorship can be classified into 3 categories: organizational strategy and capabilities, environmental factors and entrepreneurial traits. Each of the categories consists of different components.
Mentorship is perceived to provide multiple benefit all main stages of new venture. These perceptions however is not of equal importance. The perception is strongly
25
manipulated by the entrepreneurs and mentors’ experience with mentorship. It could be a direct experience when that person involves in a mentoring relationship; or an indirect experience when that person does not engage in mentorship. For entrepreneurs who never work with mentor before, the perception could be associated with their expectations - what they need from mentors.
Mentorship benefits toward organizational strategies and capabilities
The perceived importance of mentorship toward 9 factors in a start-up’s strategy and capabilities varies. On average, mentorship is perceived to be most significant to a start-up’s product strategy (71%), business model (72%) and growth (70%) while most undermined toward technology (41%) and day-to-day operations (44%).
From the perspective of mentors, they have the same perspective with these entrepreneurs on the importance of mentorship toward product strategy (72%), business model (73%), growth (75%) and technology (50%). However, they have significantly different perception when it comes to customer understanding, marketing, finance & investment, human resources, and day-to-day operations. In all of these cases, mentors perceive their roles to be more important than entrepreneurs do.
0 10 20 30 40 50 60 70 80 90 100 Entrepreneurs (e) Mentors (m)
26
Mentorship benefits toward dealing with environmental factors
Both mentors and entrepreneurs value the role of mentors in provide meaningful connection to entrepreneurs at 77% while they value the contribution of mentors to the brand of the start-up less than that (52% for entrepreneurs and 57% for mentors).
Figure 5 Means of B typed variables
Mentorship benefits toward dealing with entrepreneurial traits
Mentors are considered to be effective in setting the right attitude and expectation for entrepreneurs by both mentors (72%) and entrepreneurs (72%). However, the role of mentors in bettering entrepreneurs’ soft skills and forming a role model is not valued as much as the first benefit.
0 10 20 30 40 50 60 70 80 90 100
Connection (B1) Brand of the venture (B2)
Entrepreneurs (e) Mentors (m) 0 20 40 60 80 100 Expectation and
Attitude Soft Skills Role model
Entrepreneurs (e) Mentors (m)
27 Relative importance of mentorship for each phase of the new venture
In this aspect, there is no significant difference between entrepreneurs’ and mentors’ opinion. On average, entrepreneurs consider mentorship to be of most importance in survival phase (70%) and of least importance in resource maturity phase (48%). Mentors also follow the same patterns with their perception of mentorship to be most significant in survival phase (65%) and least significant in resource maturity phase (58%). However, the fluctuation in mentors’ perception is less than that in entrepreneurs’.
There is also correlation among variables showing relative importance of mentorship applicable to each phase of new ventures from both entrepreneurs’ and mentor’s perspective with the correlation coefficients as follows.
Table 7 Correlation coefficients for P typed variables for entrepreneurs
P1E P2E P3E P4E P5E
P2E 0.4961 P3E 0.4109 P4E 0.503 P5E 0.5056 P6E 0.6921 0 10 20 30 40 50 60 70 80 90 100 Conception (P1) Survival (P2) Stabilization (P3) Growth Orientation (P4) Rapid Growth (P5) Resource Maturity (P6) Entrepreneurs (e) Mentors (m)
28 Table 8 Correlation coefficients for P typed variables for mentors
P1M P2M P3M P4M P5M P2M 0.3251 P3M 0.4564 P4M 0.5492 P5M 0.5195 P6M 0.6596
The correlation relationship is positive which shows that the perceived importance of mentorship for stages of new venture sometimes (but not always) moves in the same direction. The larger the correlation coefficient (Table 8), the stronger the positive correlation is. In statistics, the correlation can be considered to be moderate (coefficients from 0.3 to 0.5) and strong (coefficients from 0.5 to 1).
Criteria for choosing a partner in a mentoring relationship
Entrepreneurs and mentors have mutual and non-mutual criteria when it comes to choosing a partner for a mentoring relationship. Mentors put criteria such as social values of the company, start-up’s chance of success, stage of the start-up into consideration whereas entrepreneurs consider whether the mentors have large enough network or not.
However, both entrepreneurs and mentors share many criteria which are industry relevance, shared mission and values, match in personality, commitment, entrepreneurial record, and equity. However, they perceive these shared criteria on different scales.
Entrepreneurs considered commitment (78%) to be the most important one in the shared criteria. Next is industry relevance (72%), match in personality (70%), entrepreneurial record (67%), and lastly shared mission and values (59%). However, mentors have statistically significantly different preference when rating entrepreneurial record (39%), match in personality (56%), and commitment (70%). For other criteria such as shared mission and values, and industry relevance, the difference is not significant.
29 Figure 9 Means of D typed variables
For equity, the paper uses the scale of 20% as the maximum equity that a mentor can expect and an entrepreneur can offer. On average, mentors expect a smaller amount of equity (3.63%) than the amount of equity entrepreneurs are willing to offer. The difference is statistically significant. This discrepancy could lead to an assumption that the amount of equity entrepreneurs think mentors expect is more than the real amount. That could be the reason why they tend to offer more equity to response to their false assumption. However, this should be studied further.
Practical implications
The right perception of mentorship is important to a sustainable and beneficial mentoring relationship however it is found that this perception is manipulated by entrepreneurs’ and mentors’ experience and expectations, which can be very different from person to person. This imposes a risk that the stakeholders expects and think differently about mentorship. Therefore, it is very important for all stakeholders such as mentors, entrepreneurs, governments, and incubators to set the right expectations to all people
0 10 20 30 40 50 60 70 80 90 100 Entrepreneurs (e) Mentors (m)
30
involved in this relationship and make sure that they are working toward the same goal as there are several goals to which mentorship can be tailored.
Secondly, the paper identifies how important mentorship is for each stage of new ventures. This give hints to incubators, governments or any organizations that run mentorship program for start-up to tailor their program to specific stages in which new ventures need mentorship the most.
Finally, the paper suggests several shared and non-shared criteria that mentors and entrepreneurs use to form a mentoring relationship. This is not only important for entrepreneurs and mentors to have a holistic list of criteria for reference but also know what their partners look for and prioritize. Furthermore, organizations that run mentorship programs can know what their “customers” look for and from that build appropriate strategy that can satisfy both entrepreneurs and mentors, which in the end encourages more meaningful mentoring relationship to happen.
5. Contribution, limitation and further research Contribution
This paper explores the topic by first studying how mentors and entrepreneurs perceive the benefits of mentorship. This perception is not necessarily how mentorship really benefits entrepreneurs since perception might be different from reality but it will provide the ground for further research to build on in order to see how mentorship can improve entrepreneurial success.
From the discovered benefits of mentorship for entrepreneurs, mentorship can be inferred to possess both “career function” and “psychosocial function”, which is in line with conclusion for mentorship in corporate and academic context ( (Kram K. , 1983, and Schockett & Haring-Hidore, 1985). Career functions refer to aspects related to organizational strategy and capabilities, and environmental factors while psychosocial functions cover the third category of entrepreneurial trait.
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In addition to study the perception of mentorship benefits, the paper also goes further into the perceived importance of mentorship for each stage of new ventures, which have not been touched by previous literature.
Limitation
First of all, it can be noticed that literature in mentorship for entrepreneurs is still limited which makes it hard to make detailed and practical conclusion out of the result of the paper. Secondly, the small sample size and the exploratory nature of the research make it hard to generalize solid statements from the conclusions and to fully satisfy the ambition of the paper, especially when it comes to the stratification of data according to gender, country, entrepreneurial experience, etc. Most of the survey participants are Vietnamese specializing in information technology communication sector and the result does not represent entrepreneurs and mentors in general.
Further research
Several directions for further research are possible, which emerged during the research. Due to the small sample size and exploratory nature of this study, future research is suggested to generalize the paper’s findings. The perception of mentorship can also be studied further amongst entrepreneurs and mentors with different levels of experience, gender, country which could enable us to compare the perception in more details with regards to the influence of experience, gender, country, and other characteristics to the perception of mentorship. In this paper, mentorship is perceived to benefit entrepreneurs. However, it would be useful to extend our knowledge on how mentorship benefits entrepreneurial success with solid criteria for “success” and quantify the relative importance of mentorship as one of success determinants. As discovered, mentorship has a spectrum of benefits and therefore, it is beneficial to investigate which part of mentorship is most applicable to each stage of new venture. This knowledge will allow mentors, entrepreneurs and other stakeholders that involve in mentorship program to prioritize the aspect of mentorship that they will employ. Finally with regards to the differences between perception about mentorship from entrepreneurs and mentors, further research could be done to identify whether this is a barrier that prevents mentorship from happening. In
32
doing so, we can identify the reasons and encourage more start-ups to engage in mentorship, hoping that it could positively impact their prospect of success.
6. Conclusion
There are more about mentorship for entrepreneurs but within limited resources and capabilities, this paper embraces 3 aspects which are perceived benefits of mentorship, relative importance of mentorship applicable for each stage of new venture, and criteria to form a mentoring relationship.
Mentorship is perceived to benefit entrepreneurs in multiple aspects. These benefits can be classified into 3 categories: organizational strategy and capabilities, environmental factors, and entrepreneurial traits. However, the perception about these benefits is influenced by entrepreneurs’ direct or indirect experiences with mentorship or their expectations of the way mentorship can help them. When comparing the perception of mentorship between entrepreneurs and mentors, the paper found that the perception is not necessarily the same. Five out of fourteen variables related to the perception are found to be statistically different. This finding is significant as it proves that there is no universally accepted concept about mentorship for entrepreneurs and stakeholders involving in mentorship need to make it clear what mentorship should include in certain contexts.
Employing Phases of Management model (Churchill & Lewis, 1983), the paper attempts to identify the perceived relative importance of mentorship throughout different phases of a start-up. Mentorship is perceived to be most important for Survival phase, next to Conception and Growth Orientation. When it comes to phases like Stabilization and Resource Maturity, mentorship is thought to be less significant.
Finally, there are many shared and non-shared criteria used by entrepreneurs and mentors to form a mentoring relationship. Even in the list of 6 shared criteria, entrepreneurs and mentors have statistically different preference over 4 criteria which are equity, entrepreneurial record, match in personality, and commitment.
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37 Appendix 1: Perception of mentorship benefits
Category Interview Excerpts Code
A: Entrepreneuri
al traits
‘So mentors help them to have a systematic view about the problem and the whole entrepreneurial journey’ (Interviewee 1)
‘Mentors are experienced entrepreneurs who went through hardship. So they can better understand what kind of attitude is required to be successful.’ (Interviewee 3)
A1: Expectation and Attitude
‘With a record of success, mentors could be more likely to help with soft skills such as leadership, how to maintain good people…’ (Interviewee 2)
A2: Soft skills ‘As my mentor is a successful entrepreneur and a
greatthought leader, I can learn a lot from him’
A3: Role model
B: Environmenta
l Factors
‘I was able to refer them to other resources, contacts, tool and through one person, you are accessed to all people that the person links to. This is like Linkedin.’ (Interviewee 5)
‘Mentors are those who have much experience and relationship with other people in the field. My mentor is directly one of my customers. He also introduces me to his network and brings me a lot of customers. He is truly an evangelist for my company.’ (Interviewee 2)
B1: Connection
‘Moreover, it’s also about the brand of the team. If the mentor has good personal brand then it really helps the team to improve its prestige and image especially when dealing with investors’ (Interviewee 8)
B2: Brand of the venture
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C: Organization’s
strategies and capabilities
‘It could be problem with marketing, product, customer understanding, finance…A mentor should sort them out case by case with entrepreneur’ (Interviewee 4)
C1: Customer understandin
g ‘My mentor is exceptionally useful when it comes to
designing the customer experience that our services offer as he has many year experience in services innovation’ (Interviewee 9)
C2: Product Strategy ‘If your start-up focuses on a brand new offering, it’s likely
that you have to make many pivots along the way from product to business model. And a mentor with experience can advise you how to make a pivot decision in business model at the right time’
C3: Business model
‘I can also consult him about what is the best technology, best platform to build my product’
C4: Technology ‘It could be problem with marketing, product, customer
understanding, finance…A mentor should sort them out case by case with entrepreneur’ (Interviewee 4)
C5: Marketing ‘Set aside daily matter, my mentor usually focuses on
discussing how to strategically grow my business which I hardly pay any attention to due to every day’s pressure’ (Interviewee 2)
C6: Growth
‘It could be problem with marketing, product, customer understanding, finance…A mentor should sort them out case by case with entrepreneur’ (Interviewee 4)
‘Investment cannot be secured in one or two days, it is a process and entrepreneur needs a strategy for it’ (Interviewee 7)
C7: Finance and Investment
‘Also I didn’t have much experience in scaling a business and I cannot visualize all the traps during this stage such
C8: Human resources
