What is the 2.5x rule?

January 5, 2022

To become a giant, especially in SaaS, you need a mentor or at least a handful of exceptional advisers. Perhaps you're an expert in SaaS. However, the majority of people in the vertical are not. Understanding how to develop and grow a SaaS sales team, how demand generation marketing truly works, what "enterprise-grade tech operations" implies, and how to ensure customer success significantly matter. Few entrepreneurs know everything. Even fewer have real-world experience bringing it together and scaling it to success.

The good news is that if you work hard enough, you will find excellent mentors and advisors. The aim is to meet as many competent and senior people as possible, ideally through a qualified introduction. Even if you don't have a suitable introduction, as you start to scale and get more clients, you'll most likely encounter at least one or two people who may be fantastic mentors for you who'll help you go at least 2-3 stages further.

If you're doing something exciting and hustle to meet as many beautiful people as you can, you're encouraged to include them in your adventure as mentors or mini-mentors. Don't give in too much to them. Yes, a little. A little goes a long way, but that's not what they're after. What and how you're doing is what they'll be most interested in and related to their interests. And why, in some small way, tagging alongside your journey might be fulfilling for them. If it's a good fit, and you're doing something significant, meaningful, and relevant to this possible mentor, it will all come together eventually. Most mentors, even if they are unaware of it, seek 1-2 "mentees." not more than one at a time, but usually at least one. To stay current, to contribute, and to learn.

Don't mess everything up once you've found them. Don't be misled by the fact that advice appears to be "free" first. But what can you provide in exchange?

First and foremost, it isn't money. Your successful entrepreneur advisor/mentor has already amassed a large sum of money. At least, most of them do. You can't pay them X amount of dollars per hour or whatever. It makes no difference or shifts the needle if they have millions in the bank. However, it might be better to save money for consultants rather than mentors and advisors.

Second, it's not just the pleasure of speaking with you. That, too, is insufficient. Perhaps mentors want to learn from you and assist you. However, time is both precious and valuable. There's a reason Marc Cuban charges $170+- a minute to speak with him.

Here, the "2.5x rule" comes to your rescue. It seems that after two and a half meetings, two and a half introductions to VCs or possible VP hiring, two and a half times they "help," you must "pay," or they will leave. You are not required to pay until then. Many people will create a few connections and provide free assistance if they are interested in you (a few times)

After that, you must "pay."

And, since cash doesn't work, the only way to compensate most people like this is to give them some (substantial) stock options and, if you can, let them invest in your seed, A, and B rounds if they want to. Make no connection between the two. The first is an unquantifiable "reward" for assisting.

While you don't need to have to pay for 2.5 encounters, favors, or introductions, don't put off "paying" for too long because the potential mentor will vanish after that.

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