The 5 Steps From Novelty To Value – All-round Coaching by a Serial Entrepreneur
My coaching concept is simple: when I help clients advancing their startup project, I see myself as their partner. I work for no more than a handful of clients at the same time and only on projects in or close to my area of expertise.
Step 1: Finding the Right Coach
If you are a first time entrepreneur, chances are you are in the exact same position I found myself more than a decade ago when I was starting up my own first company. Confronted with a lot of new things, I neither had a clue how to best deal with them nor who to trust to ask for advice. Probably the most important lesson I learnt back then: you better not rely on self-proclaimed experts who claim to know the perfect solution for you – there simply is no master plan for starting up a business.
Yet a good coach can provide invaluable help to keep your project on track. So how do you find the right coach for your project? Before you start looking for a coach, try to list the tasks for which you need input and try to prioritize them (must have – nice to have). This list may contain general criteria such as documented startup experience as well as more specific ones like knowledge of the markets you want to address with your service or product or expertise in how to build a strong IP (intellectual property) portfolio.
The best (and generally least biased) source of information about the specific qualities of a coach in question are colleagues who already have successful startup projects up and running. You will find that most of them are willing to share their experiences (both good and bad ones) they had with their coaches. You may also want to tap the coach networks of large business plan contest organizers or the High-Tech Gründerfonds (HTGF).
Once you have identified at least three coaches who match your predefined criteria, contact them by mail or by phone to find out what kind of references they have in your field and whether or not they have both interest and time to accept new clients.
You should then try to arrange personal meetings with the most promising candidates, ideally together with your team.
A good coach will likely ask for information about your project such as a business plan or a presentation to prepare the meeting and will be prepared to sign a confidentiality agreement. Of course, the first (and if necessary, a second) meeting will have to be free of charge and non-binding to either party.In the meeting, notice which questions your candidate coach candidate asks and try to find out whether he/she has fully understood your project. If in doubt, it will probably be better to refrain from going with this candidate. If you are convinced of his/her merits, be prepared to discuss financial terms and if (under what circumstances) the prospective coach would be willing to invest own money into your project. And last not least, there should be a good personal chemistry between you and your coach, since you’ll probably be working together closely for quite some time.
Step 2: Questions to be Answered
When planning a startup project, there are some very important points that should be clear from the very start. Before I start a project, I urge my clients in spe to provide answers to the following questions:
- What is the maximal commitment in terms of time and/or money, you (and, if applicable, your partner or your family) are willing to invest into your project?
- The same question should be answered by all team members who are essential for advancing the project.
- Is there a common understanding of the roles each team member will play, both now and in future? This also entails the fair share (company stock or other incentives) of each member. A good solution is to set up a written memorandum which should leave room for possible additional stakeholders as well as provisions that account for future contributions (or the lack thereof). Such a document can serve as a basis for a formal deed of association. Experience has shown that in most cases, it is much easier to agree on the distribution of future assets than of existing ones.
- Who else might have a stake in your project? If you are an employee of a university or a private company and your startup project is based on or requires the use of an invention, you will have to make sure that you have (or can secure) the necessary rights.
- The same applies if you need to use a process or product which is covered by third party rights in order to manufacture a product you want to sell or to offer a service you want to provide. In most cases, it will be very difficult to get a license for any of the above unless you have already registered your company. Needless to say, it helps if you have identified any rights that might be an obstacle to your business model.
- Who is going to support your project? Browse your network to find out who might have an interest of helping you to advance your project. Or could become a customer.
Step 3: Defining Common Goals
Once a common understanding has been reached to start the coaching process, I sit together with my clients to define a list of goals to be achieved. Such goals can be the acquisition of funding from either public sources (e.g., GO-Bio, VIP) or from institutional investors (e.g., HTGF or private VCs), writing a convincing business plan, performing a freedom-to-operate analysis or the like. Furthermore, a rough time line will be agreed for completing these tasks.
Step 4: Contract
The jointly defined goals form the basis for the coaching contract. If, as it is often the case in early project phases, no funding is available to pay for coaching expenses, I work for a small participation (less than 10%, except in cases of a direct investment) in the company to be founded. Upon successful acquisition of capital, my services will be covered by the available budgets of the respective program.
Step 5: Coaching Process
The coaching process usually involves one to two personal meetings per month in which current issues will be discussed and to dos defined. The client provides an agenda at least 24 hours in advance. Urgent matters will be handled by phone and/or mail. I reserve a guaranteed time window per month for my clients that can be flexibly used on demand. In exchange for the reserved time slot, a minimum contingent will be billed as a retainer. In case the time actually spent is less than the minimum contingent, unused hours will be transferred to the following month. If specific tasks demand an additional expenditure of coaching time (e.g. when deadlines have to be met), the maximum monthly contingent can be increased by mutual agreement.