Do Entrepreneurs make the best advisors?

There is this strong belief that somehow entrepreneurs make better advisors to entrepreneurs. I want to challenge this. I should declare that I do have a commercial interest in challenging the above belief. I make most of my money advising entrepreneurs and investing in them. I would say though that I do not consider myself to be an entrepreneur.

My most successful businesses to date are Help with Sales Ltd (a consultancy business) and Flight & Partners (a fund management business). However, I do not believe these businesses ‘qualify’. It is rather like many people (including myself) who made money from buying and renting out property. We are property investors not entrepreneurs.

Back to the main point, the feedback I have had from many companies (including Seedcamp participants, Canadian companies and companies I work for in Manchester) is that they found my feedback and advice useful. Most of them just assume I am a successful entrepreneur; and to be fair, I do nothing to correct this impression! But would the advice suddenly lose value because I am not an entrepreneur?

I guess because I so admire entrepreneurs and entrepreneurship (I hope this comes across in my blogs), I am able to understand the difficulties that they face and try to give practical advice that they can implement tomorrow. I also don’t have the reference point of saying ‘I did this’.

This blog got me thinking about the talks I have had from truly successful entrepreneurs and to be honest I remember that most of the talks were extremely inspiring and made me want to reach for the stars, rather like watching an action movie can make you want to get fit! But these great talks do not necessarily give practical insights or help you figure out what you should do tomorrow.

I have always been a good salesperson, it is something that has come easy to me and yet I never really understood what I did or why I was so good at selling. It was only when I failed in a sales role and read a book (SPIN Selling) that I understood what I did and how I could do better. In the same vein, I think Arsene Wenger and Jose Mourinho are fantastic football managers because they were not great footballers themselves and thus appreciated the art of football better than some great players who went into management.

So, I think failure, or limited success is a great qualification for an advisor. And using this criterion, I qualify. And perhaps the seeds are there for me to become a great angel advisor (although I really hope not!)

And finally if any ‘successful’ entrepreneurs want to challenge my qualifications to be an advisor – I would say that a business I co-founded has returned 10 times the money invested by shareholders within two years! I may not qualify as an entrepreneur, but I can say that I have made a very good return for my shareholders – something more entrepreneurs could do with learning.

21
Sep 2010
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POSTED IN Dragons Den Fundraising General Commentary
DISCUSSION 3 Comments
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  • Jon Fraser

    Entrepreneurs are perceived as good advisors to other entrepreneurs because of their authoritarian status. You blog about entrepreneurship, you give courses in entrepreneurship, and you're an experienced entrepreneur (good or bad), therefore you're an authority. Take a look at Clay Shirky's blog post on authority from last year… you'll see algorithmic authority become more and more prominant in the years to come.

    http://www.shirky.com/weblog/2009/11/a-speculative-post-on-the-idea-of-algorithmic-authority/

  • Stewart Kenneth Moore

    Good point to end by.

  • http://twitter.com/nox120 David

    I think one of the main reasons people look to past Entrepreneurs for advice is that they have, or at least appear to have, been there before and gone through similar experiences.

    My company took on investment around 3 years ago which included reducing my personal shareholding and bringing new directors which was quite a shift in the way I worked as well as the type of management structure the company required. It would have been useful to have someone, as a non-exec/mentor role, who had gone through the process of “one man band” start-up, investment, other directors/shareholders and the associated changes..