Finding the Right Business Mentor: An Entrepreneur’s Guide – Tom Rainey

The Maine Center for Entrepreneurs has some amazing programs like Top Gun, Cultivator, and MarketShare Accel, to support growing Maine businesses and the entrepreneurs that power them.

One constant in all their programs is mentors. Why are they so important? How can they fast track your growth? How do you find one that’s right for you? And if you’re looking to mentor someone, how can find the right mentee?

We get into all of this and the offerings of the MCE with Executive Director Tom Rainey.

Rich: Our next guest is the Executive Director of the Maine Center for Entrepreneurs. At MCE, he works with a team of business development experts delivering the statewide Top Gun entrepreneurial bootcamp program, the Cultivator food and beverage industry business accelerator, and MarketShare Accel, a membership program that helps companies scale up using precision trade data to expand into new markets outside of Maine.

Rich: Prior to MCE, he was President of Rainey and Associates, a consultancy specialized in planning and implementing innovation-based economic development initiatives. He brings 28 years of experience in building and managing successful business incubators and accelerators in eight States around the US, and providing consulting abroad. He holds a master’s degree in science and technology policy from Lund University in Sweden, a graduate degree in international studies from the University of Stockholm, Sweden, and a bachelor of science and political science from Washington University in St. Louis. We are very excited, and perhaps a little intimidated, to have Tom Rainey on the podcast with us today. Tom, welcome to the show.

Tom: Good morning. Thrilled to be here.

Yury: Thank you for coming. Tom, quick question. How did you get started with the Maine Center for Entrepreneurship?

Tom: Well, I’ve been here for about three years, now. And as you heard from my background, I’ve been involved in developing business incubators and accelerators all around the country for the last 28 years. Actually, one thing I didn’t mention in my bio is I helped start a company in Arizona that was a team of four individuals that started a new high technology business. We raised $24 million over a three-year period in one of the worst economies ever, and so I’ve actually walked the walk and talked the talk, and have been on the other side of the fence, actually, as an entrepreneur myself.

Yury: And now you’re in Maine. We are delighted to have you here.

Tom: Thrilled to be here.

Rich: It’s interesting you mentioned that you started this business and raised all that capital in a really down marketplace. And there’s a lot of conversation today about the impending recession and everybody getting ready to tighten their belts. Do you think recession is a bad time to start a business, a bad time to scale a business or really an opportune time?

Tom: I think a recession is a bad time to start a business, to be honest with you. Because people really get risk averse, even more risk averse. They tighten their belts, they become a lot more cautious about buying new things, making new moves. So I think it is a challenge.

Tom: However, one thing I have seen in my travels and over the years is that that kind of adversity, when there’s defense downsizing, for example, a lot of people losing their jobs in the defense industry or in the aerospace industry, just out of that adversity, you do find people almost out of desperation starting new businesses and taking the skills they need and jumping in and just trying to make it work.

Rich: Interesting. Now over at the MCE, your programs have a self-described intense application process. Is this to scare away the tire kickers? And if so, what qualities are you looking for in the entrepreneurs that you help?

Tom: We just want to make sure that companies are ready for the kinds of things that we have to offer. So if you’re interested in starting a business and you have a business idea, really the best place to start is to go to the small business development center, or go to SCORE and talk with a mentor there when you’re really just putting your business plan together. So once you’re ready to start a business, you’ve started the business, Top Gun is a really great place to go for assistance. Because it brings you together with other like-minded entrepreneurs in a cohort of companies, and it’s a curriculum-based program. It’s sort of a bootcamp over a five-month period, where you come together around a meal. There’s a real nice social element to what we do. And then you meet with not only the experts that are on our team, but also we match you with a lead mentor. And then we have access to a number of other mentors that are willing to come in, as coffee mentors, to sit with you and address specific needs you might have.

Yury: So you mentioned Top Gun program. So your Top Gun program may be the one most people are familiar with. It has a heavy hands-on mentoring component. Do you feel that mentoring is critical to entrepreneurs’ growth and success?

Tom: Absolutely. I think it’s the secret sauce behind the Top Gun program. Our ability to surround new companies and new entrepreneurs with seasoned veterans who’ve already been through this and who bring that depth of experience and can help them avoid some of the most common errors that entrepreneurs make when they’re just starting out; that’s just really critical. I would say even if you’re out there in radio land or podcast land and you’re starting a company and you don’t go through Top Gun to find someone who can help mentor you, that has some experience is just really critical.

Yury: Do you feel like we have a right balance in Maine between the number of entrepreneurs that we have and the number of mentors that are currently available?

Tom: Well that’s an ongoing challenge for the Maine Center for Entrepreneurs, because we have scaled up the Top Gun program so much now that we … We haven’t maxed out our mentor network yet, but we have 160 people who volunteer to come in and support the program all around the state. And I should hasten to add that the Top Gun program isn’t just this Portland-based program here at the Maine Center for Entrepreneurs. We work with partner organizations all around the state to deliver it in many other locations. So the list is … We do it up at the University of Maine, they cover Bangor-Orono area. We do it in Waterville, Brunswick, of course here in Portland, Lewiston, and we’re looking at the possibility of launching a sixth Top Gun cohort this year that will focus on aquaculture.

Yury: Well, congratulations and best of luck.

Tom: Thank you.

Rich: I kind of feel, Tom, like you were looking over my shoulder at the next question, here. Because my next question was going to be, if somebody is not working with Top Gun, not working with MCE, but they want to get mentor, what are the qualities that somebody should look for and then how do you go about getting a mentor outside of your program?

Tom: I would go out to service provider organizations like banks and law firms and the organizations that stand to benefit from seeing new companies start, that view you as a potential future customer or client, if you’re successful in getting a company off the ground. And generally, there are people that sort of orbit around those service provider businesses that can help. So for example, if you’re launching your business and you’re interested in branding and marketing, generally, there’s a company around that you can go to. And most of the time, they’re willing to sit down with you for a cup of coffee or to spend an hour or two here to help you get started up.

Tom: Again, I like to believe in the concept of enlightened self interest. I think these mentors and service providers come in because they get something out of it, too. The mentors, in many cases, it’s the camaraderie and the thrill of the excitement of launching a new business and being part of an entrepreneurial team; sort of living vicariously through these entrepreneurs and getting a thrill again of entrepreneurship without having to put your own house up for mortgage. Or, to find the resources to start a company yourself, or to be in the hot seat.

Rich: Likewise. I guess the other question is, if people are listening in today and they have been around the block for a little while, how do they find a mentee? Obviously, can they reach out to you? What should they be thinking about if they’re looking to take on that mentorship type role?

Tom: Well, so we like to think of ourselves as kind of a focal point for matching mentors with mentees. And that’s, again, a big part of our program. We have what we call the Maine Mentor Network. And so we match companies up with mentors not only through the Top Gun program that we just talked about, but also the Cultivator program that we’re probably going to talk a little bit more about. But the other organization that you should really think about is SCORE, which is sort of the granddaddy/grandmama of all mentoring. And they’ve launched this decades ago to try to get people volunteering their expertise and helping new startup companies. So we have an amazing SCORE chapter here in Portland. And actually, SCORE is very, very strong all around the state of Maine.

Yury: Do you feel like there is a mental barrier for entrepreneurs before they decide to actually have a mentor or reach out for an outside help? Because sometimes, we feel like, “Oh, I know what I’m doing. I can be successful as is.” You know?

Tom: Yeah, I think you’re absolutely right. I believe that … Just having worked with a lot of entrepreneurs over the years, I’ve run into quite a few entrepreneurs who were afraid to ask for help because they’re very entrepreneurial and they believe they can do it themselves. You know? And that’s one of the obstacles that I find that entrepreneurs run into is this feeling that they have to try to tackle things themselves. And it’s really showing strength to be able to ask for help and to acknowledge that you have some gaps in your business plan that you want to fill and that you need expertise to fill that gap.

Rich: If there’s one thing that I could do and go back and talk to myself when I started my business, it would be to get some sort of outside help. I just figured like, “Oh, I’ll just do this, and it’ll all work out,” and it’s just the amount of time that I spent reinventing the wheel is just ridiculous. And I would caution anybody starting out, is go out and find that mentor. Find somebody who’s going to speed up that learning curve for you.

Tom: Yeah, that’s such great advice. And actually, a lot of entrepreneurs I run into, they don’t even know that’s on the menu. They don’t even know that that’s something that … “Oh, people do that? People actually sit down and give you free … “

Rich: Exactly. Free advice? What?

Tom: Exactly. But again, just because we work with these entrepreneurs all day long and we see how enriching the relationship is, not just for the company that’s receiving this great gift of information and expertise; but it’s the people who are able to give back. They really enjoy being able to help a new startup company, and they may have gone through the trials and tribulations and started a new company on their own and remember how difficult it was. If they’re a service provider working at a law firm or an accounting firm, to be able to give back and help a company, it’s just really enriching.

Yury: Well, speaking about enriching and accelerating a learning curve and the skills, the Top Gun program also has a focus on pitching. Do you feel this is a critical skill for entrepreneurs? And if so, what are some things we can be doing to improve our pitching skills?

Tom: There is a heavy emphasis on pitching, and it’s mainly because we want companies to understand their value proposition crystal clear and really understand what differentiates them from other companies. So we spend a lot of time drilling into customer discovery, getting them out talking to prospective customers, teaching them how to ask the right questions when they’re in front of a prospective customer, and really understanding their value proposition, and then synthesizing that down into the elevator pitch. And then we start with a one-minute elevator pitch and then we work our way up to a several minute pitch of the company that really gets down … very, very precision explanation of what it is they do and the value they deliver.

Tom: And we think that’s important because when they get out in front of prospective investors, when they get in front of the banker, when they’re starting to hire people, they need to be able to explain their business really, really well.

Tom: So one thing we also want to stress is that it’s not all about the pitching. When they go through Top Gun, there’s a temptation to focus on the pitching, especially now that we have … Last year, we had two cash prizes for the pitch competition we do. So the way Top Gun operates, in each one of these locations around the state, we have a regional pitch off event and then two finalists are selected from that region to come down to our big showcase event, which happens in May. And it’s sort of the culmination of this five-month program. And it really puts the companies that perform the best in the spotlight. And they’re able to get up on stage in front of an audience of 250 people and pitch their companies. And as I said, last year we had two cash prizes of $25,000 each. One was David E. Shaw, the founder of IDEXX. Very generously put in some of his own money, again, to kind of give back and support entrepreneurship in Maine.

Tom: But having said that, with all of the focus on the pitching and the cash prize, we really believe that the secret sauce of our program is around the mentoring and the things that happen behind the scenes to get them up on that stage.

Rich: Makes sense. The MCE also offers the Cultivator program. You mentioned that earlier. And this one’s focused on the food, beverage and aquacultural businesses. Do you think that Maine businesses have unique opportunities or challenges in this field?

Tom: Both. So to explain how Cultivator came about, it really was the outcome of some surveying we did of Top Gun companies. And it turns out, in Maine, we have a lot of food and beverage companies, because we’re Maine. And yeah. So as we surveyed these companies that graduated from Top Gun, we found over the years that, happily there’s a very high rate of companies staying in business and surviving beyond their first five years, which is great. But one of the things we found is that when they get up to sort of half a million to a million in revenue, they hit this wall, in terms of their growth and development. So one of the things we decided to do as an organization was to pivot a bit and not relinquish the startup space; we still think that’s really super important. But, to get into helping companies scale up, as well. And that’s one of the differentiators between our organization and maybe other organizations that are out there.

Tom: So Cultivator is a industry-specific theme program around food, beverage and aquaculture that focuses on companies that are not startups, but they’re maybe at a half million, maybe $250,000 in revenue, and are aspiring to get up to several million in revenue. And what we’ve understood is that the skills you need to get from zero to a million in revenue are different from the skills you need to get from a million to $5 million. It’s not about so much flying by the seat of your pants anymore and trying new things. It’s really about setting in place the systems and processes and procedures. In the case of food and beverage companies setting in place food safety, and a lot of the more mundane aspects of scaling a company up. So we launched Cultivator to address that.

Rich: I think that’s really awesome that you identified that this was a sticking point for a lot of Maine entrepreneurs, and then developed a program to kind of help them up to that next level.

Tom: Well, at the Maine Center for Entrepreneurs, we like to feel that we’re very entrepreneurial ourselves, and we see that there are unmet needs in the market, and we move into that space. So in a similar vein, we learned two years ago that there was an interest in … There are a lot of companies in aquaculture that are forming around the state. So we actually adapted Top Gun, which has always been a very sort of generic program in the sense that any company with a viable business plan could come and go through Top Gun. But we learned that there are all these aquaculture companies out there. So we actually developed a Top Gun program with an aquaculture theme to it. And for the first time we ever did an industry themed Top Gun, which had a cohort of only aquaculture companies. And we put the word out to that industry, not sure if these people who were coming in off the rafts with their rubber boots on, whether they were going to really be interested in going off to a three-hour class after that. We had 21 applications for the program. We accepted 11 companies into the program up in Brunswick. We worked with the Gulf of Maine research Institute as our strategic partner on that. They actually were heavily involved in helping us select the companies and adapt the curriculum slightly to address that market.

Yury: What do you find are some of the common gaps that keep businesses from scaling up?

Tom: I mentioned customer discovery earlier. I think people all start out with basically a hypothesis around what their business is going to be and what the product is going to be and how they’re going to sell it. And oftentimes, they just neglect to go out and really talk to prospective customers. Again, it’s kind of like reaching out to the mentors for help. It’s getting out of your comfort zone and getting out and actually … It’s kind of risky, and it’s maybe a little embarrassing when you go out and sit down with someone and start talking about a business. And oftentimes what we find is that once companies do get out and start meeting with prospective customers, they hear that what they’re planning to do is not really on point. But if they pivot just a bit, it’s like, “Oh, if you could do this in the industry, then that would really take off.”

Tom: So part of it is a process of learning and understanding the value proposition they have and what’s unique in that they’re not duplicating four other companies that are currently providing the same service. So yeah, that customer discovery, I think, is really important. And then just being super realistic about how to scale the company up and the amount of funding they’re going to need. The cost of their product is another big issue that companies grapple with.

Yury: When you talk about the value proposition, can you help our customers understand what exactly do you mean? Because a lot of people think that it’s just features or the quality of the product, but the value proposition goes way beyond just the configuration of your product or a solution.

Tom: Yes. Well, so every company starts out trying to solve some problem out there; some compelling need that’s out there. And so to the extent that you can hone in on what, specifically, your company or your product, your service is going to do to address that pain point and that need, and how are you going to do it better than any other company out there.

Tom: So and to the extent that you can sort of zero in on that and articulate that to your customer, to prospective investors, to prospective employees that you would be recruiting into the company, it’s just absolutely critical.

Rich: You also have a MarketShare Accel program. It’s geared towards the same three industries, helping them sell out of state. This is similar to the last question. Do you feel that Maine-based products have an advantage for out of state, based on the way that people outside the state perceive Maine? Or, do we have unique challenges because of where we are in the country that we need to overcome?

Tom: So I should say that both Cultivator and MarketShare Accel are both programs that are made possible by Focus Maine, which is another economic development organization I’m sure you’ve heard of. They have a particular interest in supporting the food, beverage and agriculture industry here. And they actually also have a lot of resources that they’re putting into aquaculture. And so we sort of cross fertilize and we support those two areas.

Tom: So MarketShare Accel is really designed to provide support to companies, and not necessarily startups. In fact, we’re focusing the program more on companies that are further along, because the whole point of the program is to use precision market data to help companies go into new markets outside of Maine. And why we think that’s important is that we’ve found a lot of companies in Maine, even the more successful businesses, the household name companies that you hear about; when they go outside of the state, they sort of aerosol spray their resources around without really focusing in as narrowly as they should on the markets that are the best suited for their products.

Tom: So what we’re doing is we’re using a lot of interesting new tools around data mining, and there’s syndicated data that we can secure, and that we pay for, and share with companies to help them make more accurate decisions on where they should go with their product.

Tom: So that hasn’t answered your question yet. And I’m getting there. I’m getting there. But I think it’s important just to give a little background in the MarketShare Accel program and how it came about. So we have a food industry specialist that we’ve hired who really understands how to get at this data and how to teach companies to use that data to inform their marketing decisions.

Tom: So to answer your question around Maine companies, Vermont has done a really phenomenal job in marketing the state brand. They go out, and if something has … It’s a dairy product, a new cheese or a beef jerky that’s made in Vermont, people see that and think, “Oh it’s from a clean, pure, pristine place.” It’s kind of like the Switzerland of America. You know? And Maine has some of that brand cache, as well. But the further you get from Maine and New England, the less that really matters, is what we found, and what our experts tell us. So you really have to stand on the quality of the product and the way you sort of positioned it in the market, once you get further outside of New England.

Yury: Okay. Well this is the part of the show where we ask the challenger question, and lot of people get super excited about it. So Tom, here it goes. If you could change one thing to improve the business ecosystem in the state of Maine, what would it be?

Tom: Well, state leadership is really critical in all of these areas. Where I’ve seen states do really, really well in terms of economic development and really becoming a hub for different industries; it’s where the state government is working really closely with the private sector to hone policies and to really make it a more conducive atmosphere environment for businesses. Not only to recruit businesses into the state, but also to grow companies that are here. So I think having the state government aligned very closely and understanding where there needs to be a more business friendly environment, where there needs to be more resources for the kinds of things that we do; basically how to better market the state in the rest of the world, not just around the United States but around the entire global market.

Tom: So I would say just having very enlightened and educated people that are working in leadership in the state. And so one thing that’s really encouraging is to see groups like Focus Maine, for example, where you have a bunch of CEOs from around the state who came together and said, “You know, we’re going to jump in here and see if we can help out.” And you’ve got other organizations like Coastal Enterprises who, I know you interviewed a representative recently. These organizations that are really trying to take the best practices from other places and apply them here in Maine and learn … Just as we teach companies how to avoid critical errors and to learn from other people, we’re learning from other states and other regions.

Tom: So my answer would be just to make sure, from a leadership level, that we’re setting the right course for the state.

Rich: Fantastic. Thank you.

Yury: If people want to learn more about Maine Center for Entrepreneurs and more about you, where can we send them online?

Tom: So we’re at is our, is our website. We have a Facebook page. And we would always love to just receive calls from people who are interested in learning more about what we do, whether it’s Top Gun, Cultivator, MarketShare Accel. And actually we’ve just recently launched yet another new program that’s called … It’s our emerging technologies group, and we’re going to be helping companies better understand where there are federal grant opportunities and how to package their companies, even at the very early stages, to go after that federal funding, which is non-dilutive funding that’s easier to get than most people really understand.

Rich: Oh, that’s great.

Tom: Yeah.

Rich: All right, well this has been fantastic. We’ll have all those links in the show notes. Tom, thanks so much for coming by today.

Tom: It’s been great. Thanks so much.

Rich: Thank you.