Business coaching for entrepreneurs

I recently left the venture capital world to set up a business coaching practice and wrote the following piece for a venture capital related publication. Pasting it below, and would love to get the forum’s thoughts on how they perceive the value of coaching.

From Venture Capitalist to Business Coach

After several years of working with entrepreneurs across India and South East Asia, I finally decided to become one.  As a venture capitalist I was in the privileged position of having smart, passionate and highly driven entrepreneurs approach me with their business plans and try to sell me on their ideas.  I heard their stories, tried to grasp their vision, second-guessed their business models, poked holes in their assumptions, played devil’s advocate and generally made myself a royal pain to many of them. Once we’d invested in a company, I cheered the entrepreneur through the successes, commiserated on the occasional failures, brainstormed, pushed, prodded and sometimes even goaded him/her into action.  We didn’t always see eye to eye, but we learned to disagree. All in all, a truly exhilarating experience, and the opportunity to work with committed individuals driven to build large businesses in an era that will surely go down as one of the largest wealth creation opportunities the world has seen, was definitely once in a lifetime.

So why move to the other side of the table? First, the desire to get my own hands dirty building something rather than living vicariously was too strong to ignore. Second, I saw a real need for business coaching for entrepreneurs.  I believe 70% of the outcome of any business venture is attributable to people, 20% to external factors such as market environment and 10% to dumb luck. Time and again I’ve observed that the degree to which a founder is self-aware and willing to stretch himself and evolve can make all the difference between success and failure. This is especially relevant in Asia, where most business founders are first-time entrepreneurs and may not be sufficiently battle-hardened by past experiences. Moreover, unlike the Valley where professional CEO’s are often brought in once the business has hit a certain phase of maturity and raised venture funding, in Asia, founders usually continue to run the business.

Being an entrepreneur is a lonely job, venture-funded company or not, and the pressures of the business and meeting the expectations of various stakeholders leaves little time for reflection or personal development and often leads to a situation where the business has grown but the entrepreneur is playing catch-up. If the company has investors, they often add significant value in and outside of the boardroom but these discussions tend to be focused more on the business and less on personal effectiveness. Moreover, investors usually have limited time to spend on any one portfolio company. Mentors are a great source of advice, but typically offer solutions based on their own expertise and experiences and may not question or challenge the entrepreneur to change his/her thinking and behaviour.

This is where Business Coaching can help. Coaching is a process of collaborative inquiry, relying on the use on well-crafted questions, rather than continually sharing the answer, to get people to sharpen their own problem solving skills. In coaching, the relationship is objective, and the focus is not only on what the person needs to do to become more successful but also who the person is and how he thinks. By partnering with a coach, an entrepreneur can achieve the kind of personal and professional transformation that positively impacts the business. Agendas can vary and include anything from learning how to delegate, motivating others and improving communication skills to improved prioritization and work-life balance.

When I announced my plans to set up a coaching practice a fellow investor remarked to me, “seems like you only want to do the fun part of a VC’s job”. I couldn’t have put it better.  Impacting people was the most fulfilling aspect of my job as an investor and as I embark on my own entrepreneurial journey – incidentally a very difficult-to-scale business that no VC should fund! – I look forward to re-engaging with entrepreneurs and the start-up ecosystem in a new role as a coach.