the value of a mentor

your business. our team. mutual success. champagne toast optional.our focus lies in the realm of small business, but we stay connected to the "big-market" world of venture capital and their "sexy" startups because 1) there's a lot of talented folks who hang out in that neighborhood, and 2) they're consistently sharing valuable experiences and insights about growing businesses.

though much of the perspective and advice associated with growing a large market venture is irrelevant to growing a small business, every once in a while we encounter a universal truth worthy of sharing. today we were inspired by an article published by the venture development center at umass boston. here's our condensed translation for the small business owner ::

why mentors are so valuable
  1. they complete a skills gap :: small business owners rarely have a "team" of high-level thinkers, which means they're even more behind the 8-ball than a big-market startup when it comes to covering all the skills needed to successfully start and grow a business (think marketing, sales, finance, operations, legal, technology, and human resources). bring in a mentor, however, and many of these skill gaps get plugged.
  2. experience with prioritizing :: it's been repeated a gazillion times... to be successful, small business owners need to work on their business rather than in their business. even then, there's an incredible amount of things to do. the sheer volume makes it particularly challenging for a business owner to prioritize. mentors with years of experience (especially with operating small businesses of their own) have the perspective to guide small business owners towards what they should be spending the most time on.
  3. making connections :: experienced mentors will have an extensive network -- more than the typical business owner. they're able to introduce the small business to people who can really help make things happen for their business.
  4. building credibility :: having an experienced mentor can help business owners gain the trust of prospective customers, business partners, bankers and others.
  5. avoiding mistakes :: mentors have "been there, and done that." they’ve already made the mistakes every small business runs the risk of making and can help a small business owner avoid dangerous land mines.
vetting your mentor

the folks at umass rightly posed the question of "how do you know if a mentor has the right qualifications, motivation and time commitment to help?" in response, they came up with a rating system based on four simple questions to help business owners determine if a prospective mentor is likely to meet their needs. again, we've made some slight adjustments to account for the variations associated with building a company for "main street" vs. wall street ::

(attach a score to each of your answers, with 1 being low and 4 being high)

  1. qualifications :: does the mentor have experience successfully building and/or running a small business? has he/she gone through the experience of selling or acquiring another company?
  2. motivation :: does the mentor really care about helping to build your business or is he/she just involved to do business with your company?
  3. attitude :: does the mentor spend a lot of time telling you the “right way” to run a company instead of listening to and asking you questions that get you thinking?
  4. accessibility :: how available is the mentor when you have a burning issue? does the mentor use regular one-to-ones with you as the means of mentorship, or does the mentor swoop in for one-to-manys?

total your score and divide by four. here’s what it means:

1.0 to 2.99 – the mentor is just a contributor.
3.0 to 3.99 – the mentor is, well, a mentor.
4.0 – the mentor is a super mentor, the kind you want.

like the umass venture center, mentorship lies at the core of ZENCubate and all of our other business-building services. we buy into the concept of scoring a "4.0" on their scale, and you should, too.

Real Estate Broker Fined $35,000 for Data Protection Failures

Last month the Federal Trade Commission finalized a $35,000 settlement with Gregory Navone, a small real estate broker who threw 40 boxes of customer tax returns, bank statements, consumer reports and other financial records into a dumpster located behind an office building in Las Vegas.   Despite what the ads say, this just goes to show you that what happens in Vegas doesn't always stay in Vegas.

In resolving this complaint, Navone agreed to the fine (approximately $875 per box) and committed to adopting a comprehensive "written information security program."  For those of you who read our last article on the Massachusetts Data Protection Regulations going into effect on March 1, this should sound really familiar.

There's a lot more to learn from this case, however, than simply noting we shouldn't be as foolish in our dumpster habits as was Navone.   The FTC's investigation of Navone extended deep into his business operations, uncovering many additional violations of the law:

  • he failed to implement physical and electronic security procedures over sensitive customer data, and
  • he failed to take reasonable steps to secure customer records stored  in his home's garage.

Once again, readers of our last article should easily recognize the similarities with the latest Massachusetts regulations.  Although Navone's problems arose under several federal regulations (the FTC and Federal Credit Reporting Acts), the requirements are very similar.  It's also especially interesting  that the FTC's claims also encompassed Navone's failure to comply with his own customer policies, which read in part:

We take our responsibility to protect the privacy and confidentiality of customer information very seriously. We maintain physical, electronic, and procedural safeguards that comply with federal standards to store and secure information about you from unauthorized access, alteration and destruction.

If I were in Vegas right now, I'd consider it pretty safe to bet that Massachusetts regulators will take a similar approach with the enforcement of its laws.  Navone either consciously ignored his obligations under the law, or believed he was such a small operator that his lack of compliance would never be discovered.  Like so many who gamble in Vegas, he lost.

If you're operating a business in Massachusetts, I encourage you to avoid acting like Navone - especially if you can't afford to lose $35,000 or more (plus the cost of hiring an attorney)  in making your bet.

Jack Speranza is an attorney, software engineer and entrepreneur.   For 15 years he has helped his companies and clients strike the right balance between risk and reward by weaving good business, good technology and good law into new services and operations.