It’s hard to put a price on relationships—and that means that many mentorship organizations and tools struggle to build a sustainable business model. Time-intensive, high-touch mentorship programs that actively match and sustain mentor-mentee connections often run on the back of volunteer goodwill, time, and charitable donations. Only a handful of these models manage to pull in revenue from school districts or postsecondary institutions seeking mentor-based student support solutions.
At the same time tech-based platforms that make connecting to prospective mentors in the labor market far less costly rely largely on advertising dollars and subscription fees. Those business models tend to power the equivalent of interactive, digital yellow pages but don’t facilitate actual connections or support ongoing ones. Platforms like LinkedIn and Twitter can certainly help individuals find new connections, but that often amounts to digital cold-calling by the hopeful mentee.
In short, high-touch, reliable mentoring programs lack a business model that affords scale, and large-scale, social technologies lack a business model that provide reliable ways to actually match people with mentors.
The need for mentoring models that both afford scale and support mentor-mentee relationships is what piqued my interest in a new approach: a company called Pelion is trying to source reliable connections to virtual career mentors and tying the outcome of those connections, as measured by the career success of the mentee, to a financing model called income share agreements (ISAs). As my colleagues Richard Price and Alana Dunagan have written, ISAs are an emerging financing tool sweeping higher education and alternative credential programs. In those markets, ISAs have the potential to both protect students from paying for educational experiences that don’t create value for them in the labor market, shifting the risk of poor workforce outcomes away from students, and to produce better outcomes by putting that risk on schools and giving them skin in the game.
For Pelion, an ISA offers a slightly different upside: an alternative approach to incentivizing, supporting, and scaling mentorship for job seekers. Mentees on the platform don’t pay anything upfront, but pay a small percentage of their income down the line if their mentor helps them succeed. I sat down with Pelion’s co-founder Martin Permin to learn more.
Julia: We’re in deep agreement that who you know matters, but that access to networks can be a barrier to entry for many looking to break into a given industry. How is Pelion set up to scale access to mentors otherwise out of reach for job seekers?
Martin: Historically, there has been no reliable way to access mentors. This is true both for those who are just entering the workforce, and for individuals later in their careers who are looking to improve their trajectory. Most mentors lack incentives to help, outside of their existing social networks and workplaces. At Pelion, our mentors hear about us on Twitter or from friends and sign up specifically to find new people to help. That means users looking to find a mentor on Pelion can be confident that expectations are aligned.
We use ISAs to align incentives between mentors and mentees. Agreements are negotiated on an ad-hoc basis, though most users choose one of our default options. Different kinds of career help might warrant different agreements. For example, a user looking for a new job might share a high percentage of salary for a short period of time, while a user looking for ongoing mentorship might share a lower percentage for a longer period. ISAs incent mentors to provide real value, since they only kick in once a minimum salary threshold is reached. All agreements are subject to vesting, so mentees can cancel the agreement with minimal risk.
Not all mentors are motivated by financial compensation, so we also have options for pro bono arrangements, and even ISAs earmarked for charitable giving. Separately from financial compensation, mentors also earn a more intangible form of social capital, which advances their own careers. Similarly to how venture capitalists boast of having invested early in the hottest startup, a year from now I’d love to see Twitter bios containing “Mentor for X”.
Julia: Anecdotally, you’ve started to hear that some of your customers actually already know prospective mentors, but aren’t quite sure how to reach out and ask for help. What does the platform do to support that outreach?
Martin: Even if you’re lucky enough to already be in contact with the perfect potential mentor, asking for help can be an awkward experience. In fact, “Ask someone to be your mentor” is one of the most frequent mentorship-related Google searches. Our ISAs provide an easy way to formalize the relationship, whilst aligning incentives for both parties. We also frequently hear from mentees that entering into an ISA keeps the mentor accountable and responsive.
Julia: There’s discouraging data suggesting that although people say they want to be a mentor, only a fraction actually step up and do so. How is Pelion trying to cross that chasm between intent and action?
Martin: This problem is analogous to The Innovator’s Dilemma, in which fail in spite of seemingly doing everything right. The return on mentorship typically follows an S-curve, which means gratification is delayed. This means mentoring is often deprioritized by well-meaning, busy people. One externality of this is that junior talent, lacking mentorship, has to resort to expensive degrees to signal value to employers in an already degree-saturated market. Our ISAs provide mentees with a tool to incent mentors to stay engaged.
I also think more efficient tools for mentorship will help. We’re building tools to save mentors’ time on repetitive tasks such as introductions, follow-ups, and scheduling calls. Virtual mentorship is actually often more efficient, since scheduling calls is easier than meetings, while some communication can be done asynchronously.