Six Ways Peer Advising Empowers Entrepreneurs

Jensen Huang, founder of Nvidia, currently valued at nearly $3 trillion, famously declared that he wouldn’t start the company if he knew then what he knows now. In December 2023, he told the Wall Street Journal, “The reason for that is really quite simple. Building Nvidia turned out to have been a million times harder than I expected.” 

I built companies that I sold a year and a half ago. When people learn this about me there are generally two responses. The first comes from non-entrepreneurs. “Do you miss it?” The question assumes that I harbor a twinge of regret. The other response, which comes from entrepreneurs, is “Congratulations.” Because building companies is more like the experience of hard exertion–be it climbing a mountain or giving birth. Do you miss the brutal experience of it? Probably not. Are you proud of the gumption, the vision, the team, the endless work you put into it. Hopefully. 

As a faculty member at Carnegie Mellon University’s Tepper School of Business, I work to enlarge our students’ visions for their future lives beyond traditional recruiting channels. I also ensure they hear from entrepreneurs who speak to the struggles, personal and professional, of an entrepreneurial life. I describe entrepreneurship as a decision to enter the ring. It’s hard to imagine how beat up you may be by the end of the fight. You need to be determined to be the last person standing for the duration. 

Research by Stanford’s Yong Suk Lee and Charles Eesley found that participation in their school’s entrepreneurship programs had a negative to no impact on entrepreneurship rates. This may seem like bad news on the face of it. However, the study also suggested that student participation decreased the rate of failure and increased long-term firm revenue for startups that did form. There is a persistent tension for those working in entrepreneurial ecosystems. Do we encourage our remarkably talented community members to bet on themselves? Do we help them understand what an entrepreneurial life requires, even if it leads to fewer opt-ins? It’s important to do both, persistently holding the tension. And it is essential we provide them scaffolding as they navigate the vagaries of an entrepreneurial life. 

An impactful way to steel entrepreneurs is through the use of peer advising groups. We have embedded peer advising structures into many of our courses and most of our cohort entrepreneurship programs, at all stages. These groups, which are lightly facilitated according to a disciplined structure, allow founders to share an issue and respond to a period of clarifying questions from peers. Then, the peers shift into experience-sharing mode. The goal is to help the entrepreneur commit to a few actionable steps that the group checks in on in the next meeting. When surveyed, these groups are invariably cited by participants as one of the most valuable, if not the most valuable, components of our programs. 

The entrepreneurship literature backs up this energy around peer advising groups. Peer advising models have been found to significantly improve business performance, personal satisfaction among business owners, enhance entrepreneurs’ learning and adaptability, and result in increased business innovation and growth. They are also quite cost-effective for cash strapped entrepreneurs! 

Peer Advisory Groups offer six specific benefits: 

• Knowledge Sharing and Learning: Peer advising brings diverse perspectives to problem-solving, encouraging innovative thinking and creative solutions that might not emerge in a traditional advisory setting.
• Emotional Support and Motivation: Peers provide crucial emotional support, reducing feelings of isolation and increasing emotional resilience among founders. Regular interactions with peers also generates accountability and motivation, helping entrepreneurs focus on their goals and persist through challenges.
• Network Expansion: Founders’ social and professional networks expand through these groups–providing access to new contacts, resources, and opportunities, including collaboration, that can be crucial for business growth.
• Skill Development: Engaging in peer advising helps entrepreneurs develop leadership and communication skills, as they learn to articulate their challenges and provide constructive feedback to others. The process of advising and being advised sharpens problem-solving skills, as entrepreneurs are exposed to various business scenarios and strategies.
• Enhanced Decision-Making: With access to collective wisdom and diverse experiences, entrepreneurs become more attuned to risk assessment and management.  
• Cost-Effectiveness: Entrepreneurs, especially early stage ones, are generally cash strapped. Peer advising is a cost-effective alternative to professional consulting services. 

One of the peer advising groups that I have been a part of for nearly a decade is a group of women in leadership and entrepreneurial roles. This group opened me up to opportunities I had not considered and buoyed me in critical ways during the darkest days of company-building. During one dark time, one member showed up on my doorstep at 8 a.m. with pastries and sat with me for the better part of a morning. I had to explain very little. Because she leads a similar life and because we have been ringside of each others’ ventures for years, she could offer me the comfort and counsel I needed to get back in the ring. For entrepreneurs entering the ring, access to peer advising groups, buttresses them for the hits that are sure to come.