Successful entrepreneurs seem to have very strong networks. They are connected to investors, advisors and potential employees at the same time. Indeed those who do have strong networks find it much easier to receive investment, get good advice, and hire better people. This is often referred to as ‘social capital’.
If you are wondering what ‘capital’ stands for in ‘social capital’, Porter Gale cuts right to the chase of the matter with this quote:
“Your network is your net worth.”
We often refer to social capital as ‘network’ or ‘status’ or a mixture between both of them.
And I guess that by clicking on this article, you are interested in finding out how you can build up social capital most effectively. Before we dig into that let me first explain what social capital really is.
What is Social Capital?
Social capital is the sum of the financial power, prestige and network of all of the people you have access to. Your social capital depends on the strength of all of the forms of the capital of all of your contacts.
According to Pierre Bourdieu, social capital is the size of the network of connections you can effectively mobilise, which also depends on the volume of the capital (economic, cultural or social) possessed by those contacts.
You shouldn’t network with just anyone if you want to do so effectively. Instead effective networking requires careful selection of the people you interact with, while still making sure that you network with enough people to build up a sufficient quantity of contacts.
7 Tips for Effective Networking
Networking needs to be balanced between quantity and quality. The following practical tips will help you network more effectively:
1. Never Eat Alone
In his book, Never Eat Alone, Keith Ferrazzi postulates that you should always have at least one conversational partner for lunch and dinner. If you manage to meet – on average – 2 new people per day with this strategy (and if you use it both during working days and during the weekend), you’ll have met over 700 people over the course of one year.
After 20 years, this means you would have met over 14.000 contacts and likely built one of the strongest networks among all your friends.
I have used this strategy myself, even though not to such an extreme extent, and have been positively stunned by the results.
2. Attend Networking Events
There are multiple types of networking events that you as an (aspiring) entrepreneur can attend, such as pitch competitions, ‘fuck up nights’, panel discussions, startup festivals and summits.
If you can optimise for stage time during those events, I recommend you do so as this will facilitate the number of people who will approach you after your pitch, panel or keynote.
It is very easy these days to win a spot to pitch your startup even at renowned events.
However, even if you’re not a speaker, I recommend that you attend and speak with a variety of people.
If your mission is very clear, you can approach people directly and speak to them about your goals and challenges. However, if you are a little bit more flexible in terms of your goals, I recommend starting long and deep conversations over a bunch of short and superficial ones.
3. Engage on Social Media
The essence of building a strong network and gaining social capital is to connect to a diverse group of people, which is why using social sites, such as Twitter, can help you get more investments and better ideas.
Research showed that employees who use Twitter have better ideas than those who do not. Moreover, engagement on Twitter especially if it leads to getting mentioned by other startups significantly correlates with funding success.
Depending on your status and personal brand, people you connect with over social media are very open and quick in responding and can enrich your network.
4. Join Networks and Communities
The 21st century is the age of networking and community. With physical borders increasingly losing their relevance, virtual places such as Slack and Discord communities become the go-to-place for people with similar goals and interests to connect.
For example, there are entrepreneurship networks such as Sigma Squared Society, EWOR, Y-Combinator, Founder’s Forum, and Entrepreneurs’ Organization with which you can connect to people and build up your social capital.
Those networks usually focus on providing access to investors, advisors, customers, and other entrepreneurs at the same time. Often, a weekly or monthly meeting cadence is required by those networks which are very helpful to build up a strong network.
5. Become a Content Creator
If you want to go the extra mile in the networking game, you can start a blog or a YouTube channel or be active on LinkedIn and other social sites to engage with your followers and invite them to be part of your community.
This strategy is one of the most effective ones mentioned so far. As, by stating your goals clearly in the content you create, you automatically filter for people who are interested in your community content.
6. Re-connect With People You Haven’t Spoken In a While
Most people who are active networkers are under the assumption of constantly having to re-engage with the people they already know. This is simply not true.
Re-engaging with weak ties, i.e. people you haven’t spoken with in a long time can be more valuable. First off it makes your connections happier if you reach out to them after a long time and second people you did not connect with for a long time, are more likely to provide you with a valuable opportunity.
The latter sounds a bit counterintuitive but makes total sense: You speak to your friends all the time and you and your friends are all connected to each other. Therefore you already know what’s going on in your close network.
However, when speaking to people you haven’t spoken to in a while, they will likely have access to other people you haven’t spoken to in a while. This can lead to more interesting opportunities.
7. Bridge Social Holes
If you as an entrepreneur manage to become the connector between networks, you will quickly be regarded as one of the key connectors in your industry.
This introduces a third dimension to networking – it doesn’t only matter with how many people you connect with and how powerful those people are but also what the structure of the networks of those people is that you are connected with.
The less they are connected with each other, the stronger your position in your network will be.
Building up social capital can be one of the greatest determinants of your success.
The points made in this article will help you in your quest of launching a successful venture.
Keep in mind that both the quality and quantity of your network are important. Having a clear goal in mind when networking strongly improves the outcome of your networking activities.