‘It’s not who you are but who you know.’ The old adage may sound like a cliche but entrepreneurs should pay attention every time they hear it. Whether they are looking for investors, mentors or customers, having the skills to establish and maintain relationships is paramount to succeeding in an increasingly competitive marketplace.
Yet, establishing those important relationships may seem an exceptionally daunting challenge for founders who have recently left large corporations in order to build something from the ground up. “When I had a big title at a big company, I could get a call or a meeting pretty easily,” says Jim Howard, CEO and co-founder of CrownPeak, the cloud-management platform provider. “Suddenly, as the CEO of a company nobody had heard of, my network became incredibly valuable.” Howard confesses that he would have never managed to find his first customers if it wasn’t for his contacts. “Without the first five customers, you don’t have a company,” he adds.
Social-media platforms are often put forward as the solution for people looking to expand their networks. Indeed, LinkedIn’s celebration of its 20 millionth UK member in January may have lured startup leaders into thinking that they are living in a golden age of connectivity, with business contacts just a computer screen away. “Social-media platforms, especially Twitter, were crucial for me when I first started a few years ago,” says Tracy Dinunzio, CEO and founder of Tradesy, the fashion-trading company. “[But] as they’ve gotten larger they’ve also gotten noisier and less effective.”
She is not the only one to note the ineffectiveness of social media platforms. A recent Harvard Business Review article suggested that approaching people on LinkedIn is no longer enough for executives wishing to expand their network. Nowadays, exceptional business leaders are constantly approached by a multitude of people and rarely respond to everyone wishing to connect.
Further research from Ernst & Young reveals that 36% of business leaders still use social media to grow their networks. But in comparison, 68% of executives prefer to meet potential acquaintances face-to-face. So it’s no surprise that a multitude of organisers arrange networking events to cater to this desire to meet people in the flesh.
Yet simply attending these get-togethers won’t mean that entrepreneurs will meet the right people; knowing how to navigate networking events can mean the difference between success and failure. ”One mistake that I used to make was that I had a random approach, meaning that I had no purpose,” says Daniel Jordi, CEO and founder of Jordico, the networking and startup consultancy. “If you just go out because you’ve heard that networking is a good thing, then you’re not going to do very well.”
Startup leaders must therefore ask themselves what kind of people they need to have in their networks in order to ensure the success of their enterprises. And perhaps more importantly, they must have something to offer in return. “People can spot a freeloader right away,” says James Davis, CEO and founder of Upad, the self-service lettings startup. Blindly approaching everyone at a networking event with nothing to offer in return may result in failure to connect with the right people. Worse, it could leave you at the paradoxical disadvantage of having too many contacts. “Knowing too many people is actually a detriment […] as you will be spread too thin,” says Rishi Anand, CEO and founder of Venture Giant, the online platform connecting startups with investors. “I personally am asked for a business card more often than I [offer one].”
Ironically, some events with the singular purpose of expanding entrepreneurs’ networks are not as beneficial for executives looking to grow their contact list. Instead of fraternising with other startup founders, entrepreneurs attending those events often find themselves surrounded by suppliers wishing to sell their products. “Having a strong network is important but you won’t build one at actual networking events,” argues Dinunzio. “With enough events to keep you busy every night, you can waste valuable time just shaking hands and exchanging business cards with no real outcome.”
And no matter how you choose to go about creating a network, you are still left with the challenge of maintaining it. “Keep the amount of people that you want to keep in touch with small,“ says Jordi. “Focus on the ones that naturally resonate with you.” If the conversation doesn’t feel good or natural, Jordi advises entrepreneurs to focus on other people in their networks instead.
Ultimately, there is no silver bullet as to how business leaders should build their networks. While some people enjoy meeting people at events, others may prefer kicking things off with an email. “Everybody is unique and has an approach that works for them,” Jordi concludes. “So figure out what the most authentic way to build relationships is for you.”