Your product matters, your employees matter, your funding matters but “who you know” can potentially transform your business. Some people enjoy networking and others don’t. However, regardless of which group you fall into, everyone agrees that, if you can get the right people together, great things can happen.
If you’re a startup founder who hasn’t prioritized networking in the past, then this could well be the one thing that makes a huge difference to your success.
Let’s look at some research.
Relationship building is essential
Research conducted by The Economist, “Informal Innovation: Entrepreneurship and Informal Communities”, confirms that informal professional networks and communities can actually be more important for entrepreneurial success than formal structures such as incubators and accelerators. This shouldn’t detract from the important role incubators and accelerators play – rather it’s a skill and capability that can really amplify their benefits.
This research is based on a survey of 1,000 entrepreneurs in ten cities (in Asia, Europe and US) and considers both digital and in-person networking.
Over half of the survey group (58%) participated in business-oriented social networking groups on major global platforms like Facebook and LinkedIn. Entrepreneurs in Ho Chi Minh City were the most active, with 39% participating in more than ten groups. Singapore and San Francisco entrepreneurs were close behind with 34% and 32% of respondents respectively.
However, in Tel Aviv, New York, and London, meeting fellow entrepreneurs in informal physical settings was considered to be the single most important source of support. Online and physical networking activities appear to be complementary rather than mutually exclusive.
Why is the advice of mentors and peers so important? Lack of financing, complex regulations, lack of support from the government and a fear of failure are all hurdles that could kill an entrepreneur’s motivation. Relying on guidance and encouragement from somebody that has already been through all of this is priceless.
Interestingly, it doesn’t seem to be easy for entrepreneurs to identify relevant communities in their cities. More than half (55%) found it difficult to access informal communities.
In general, for all of those surveyed, active networking had a positive impact on the performance of their businesses. The study found that the greater the number of networking activities entrepreneurs engage in, the higher the chance of generating a positive return – in terms of profitability, revenue growth, innovation, capitalization and talent.
So, how do you get started?
Build Your Community
Membership in co-working spaces is rising. For startups with limited resources, co-working spaces solve the problem of lower overheads and more networking. Co-working spaces are everywhere and they serve as an office for everyone from freelancers to founders and often feature valuable networking events after-hours.
Incubators and accelerators also provide an extended community designed specifically for startups. These organizations help to match founders with industry leaders and provide a space where entrepreneurs can intentionally partner with mentors, peers and investors. Even if you don’t manage to secure a place in your preferred accelerator, it’s worthwhile joining their extended community and participating in their events.
Meet Online, Connect IRL
Cold-calls have been replaced by emails and DMs and you can use mobile apps to bring those connections into the same room. Facilitating in-person connections generates a higher return on investment for everyone involved. If your city doesn’t have access to resources like incubators or accelerators, networking at regional events is the next best option and can result in introductions to the right people. Meetup groups are also happening everywhere now and cover every subject a startup founder needs to succeed. Search for these online or set up your own networking group on Meetup.com or Ucities.com, which is a startup community platform.
Identify your current influencers
When reviewing your personal network, start by identifying your core contacts – people you know personally and who are naturally willing to help. They should understand what you are doing and your end goal. This is a great way to start. Ask your existing connections to introduce you to people that are not in your network so that you don’t have to contact people cold.
Ask how you can help
Don’t make the mistake of only thinking about your own personal interests when networking. The most effective networking strategy is to ask what you can do for others, not just what others can do for you. The connections you make, regardless of whether they are business or personal, are much more likely to help you in the future if you helped them in the past.
Be careful how you approach old connections after a long time if you suddenly have a favour to ask. Unconvincing attempts to “butter people up” immediately before asking for something may irritate them.
Always follow up
Everybody is busy. A lack of response from a connection doesn’t always mean that they are not interested. There’s nothing wrong with following up once or twice and within reason. Use your common sense and naturally, if someone specifically tells you that they are not interested, you need to stop.
If you don’t stay in touch with your personal network, they may feel like you’ve lost interest in them or only reach out when you need them). Make sure you reconnect when the opportunity arises. It’s easy to do this by sending quick messages on LinkedIn or other social platforms to acknowledge and support the things they are doing.
It doesn’t have to be just about you. You can introduce one person you know to someone else you know if you think they could benefit from each other. You will build a relationship with two or more people at the same time and, if you do this right, there is a much greater chance that they will take your call in the future. Importantly, check with both people first to confirm that they are happy to be introduced to each other as no one likes being dropped into an unwanted introduction!
Work the opportunity
Prioritize events where networking is already set up to be part of the event. Make sure there’s time to socialize rather than just sitting down for lunch or taking your seat to listen to a speaker. Come alone – it makes you more approachable. Don’t spend too much time talking with people you already know. Approach people when they’re alone and introduce yourself, it’s acceptable because everyone is there to meet new people. If you’re nervous about this, before arriving, plan your brief personal introduction and maybe a few questions you can ask new people. Don’t worry, this is a skill that improves with practice.
Create the world you want
Networking doesn’t have to mean connecting with people you don’t like dealing with. Some people make this assumption but it is you that decides who is in your network. If you make a decision to only invite people into your network that you genuinely like (for whatever reason) then the “work” involved with building your network becomes something that you actually enjoy doing. The benefits of your network are like compounding interest; they accrue and grow over time as you continue to invest in it. So why not get started now?
This article was written by Luke Henningsen and he is Co-Founder of the growing startup community at Ucities which is being developed to help provide a dedicated space for founders and startup people to network and support each other. He also leads a business called Scale & Swing, which delivers executive search to startups looking for senior talent at a startup-friendly price-point. Feel free to reach out to Luke on LinkedIn or at Scale & Swing or join the growing community at Ucities.