Monday, June 13, 2011

Lesson #47: The Importance of Networking



The old adage, "it is not what you know, it is who you know", resonates particularly well for startup entrepreneurs.  And, it holds true across most all areas of a startup's business, including driving sales, hiring employees, raising capital and securing key partnerships.  Therefore, establishing, nurturing and mining a deep network of relationships can often make or break the success of a startup.  I know many of you may be uncomfortable with networking, but hopefully this post will help you understand the importance of networking and the need to break down any barriers between you and your network.  Let's discuss the various types of networking opportunities available to you.

Firstly, when people think networking, they think attending events to meet people that may be able to help them.  This could be industry specific events related to your business, or business task events (e.g., strategy, marketing, technology) related to certain specific business needs, or other events bringing together like minded individuals (e.g., fellow CEO's, fellow startups).  Do your best to stay abreast of all of these types of events via your respective industry trade associations, professional associations or local startup groups with the calendars posted on their websites. 

And, certainly, make time to attend the most important of these events.  I used to think time spent on networking was time away from the business, and tried to avoid it.  But, over time, I quickly learned a strong network can actually help me build my business faster than I could on my own, and should be a vital part of a startup executive's efforts.  You never know what new client, investor, employee or other business colleague will come out of events like these.  And, they can be a lot more productive than in-the-office initiatives, given the face-to-face natures of these events.

But, you do need to be sensitive to investing your networking time wisely, to get the biggest bang for your buck.  When assessing in-person networking opportunities, I try to have a good sense to: (i) the expected size of the event (hoping to meet more people than less); (ii) the quality of the attendees (hoping to meet more CEO's than lower level staff members); (iii) the location of the event (less time consuming to attend events in my home city, than having to travel, if I can avoid it); (iv) the type of event itself (e.g., hoping to avoid dinner events where locked into one table of people, instead of roaming the room); and (v) the reputation of the hosting organization (e.g., looking for the leading brands in the space to put on the best events).

Equally importantly, I want to make sure I have a clear mission for the event (e.g., what specific companies or executives do I want to meet based on announced presenter or attendee lists made available prior to the event).  This often means trying to arrange a meeting time with your desired targets prior to the event itself, which can often be crazy bedlam and tough to find the people you are looking for.  And, keep in mind, you don't always have to be the "hunter" at networking events.  Sometimes you can get in front of more people faster, by being the "hunted" as a featured speaker or panelist at the events.  So, figure out a reason for you to be the "featured attraction" (e.g., "one of the hottest startups in town", "pro in online marketing"), which can also save you on any event fees.

But, your networking efforts should not be limited to in-person events.  Networking has never been easier with the internet.  You should be an active user on networking sites like LinkedIn, Twitter, Facebook or other sites or list serves specific to your industry or location (e.g., The BuiltInChicago.org business networking site for tech startups in Chicago).  This means having a rich profile page that positions you as an expert in your field, posting relevant news and updates to your status updates and joining/engaging with the relevant "sub-groups" within that network.  But, remember, when networking online, it should not be a "one way sale" to the audience, it must be a "two way conversation" to get the dialog started.  So, an an example, answering forum questions (in a "non-salesy" way) can also be a great way to meet new relationships.

We all know how busy you are as a startup executive.  But, you can't bury yourself in your office, and you can't be bashful when building your business.  Start building your network, and great things (e.g., new clients, employees, investors, partners) are sure to follow.  And, don't forget, networking is more than simply the networking event itself:  you are building long term relationships and need to follow up with these new colleagues after the event, and over time.  So, manage this network nurturing process accordingly.

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