A 2010 analysis by the Harvard Business Review revealed that investors placed more money into companies in “which they were connected through an education network…[and] companies within their alumni network that were better investment targets.” For startup founders who prefer to be heads-down focused on product development, they may be making a mistake by not placing more emphasis on network development. That is: they’re missing out on opportunities to connect with customers, resources and investors to build their business.
Building a Community; Building Your Business
“In my experience, there is no such thing as luck. When building a business, it’s about people, and [startups] forget that,” said Frank Gruber, Tech.Co CEO and author of Startup Mixology. Similarly, Jenni Blake, author of PIVOT: The Only Move That Matters Is Your Next One , said building relationships is one of the best assets to growing your business. According to Blake: While being a product-first company has led to several successes, there are also many ways through which a product-first approach can be a detriment to a company’s success. A big part of what makes a product successful is the company’s ability to let their audience know their product is needed and fits within their current lives; however, in order to get that message across, you need to create a community of supporters. “The wise business owner knows that they exist within a community of other people,” said David Klow, a psychotherapist and the owner of Sky Light Counseling Center in Chicago. “No matter how much know how or sweat equity you put into your operation, you will need good, solid relationships to make it thrive. Even if you have a very specialized business, it still involves people on some level. Building trust and crafting relationships early goes a long way towards future success.” The consequences to focusing too much on your product versus people could be the sound of crickets when the company is ready to launch or find funding and your six-month burn rate is staring you in the face.
One-to-One VS. One-to-Many
Staying in the networking game may not be completely comfortable for every person or it might feel like a chore. When you come to that realization that it’s time to get out there, Gruber said there are two types of relationships that can help build in their network, one-to-one and one-to-many. The one-to-many is where you begin to extend your brand, offer your knowledge to others, become a thought leader in your industry and connect to people on and offline. To get started, Blake suggests making a list of 15 people broken down to where “five people are in your field that you’d love to reach out to, five peers you can deepen relationships with, and five people in a sideways industry that would be interesting to connect with and exchange ideas.”
Focus on What You Have to Offer to the Community
Klow said that while not everyone is comfortable with networking, focusing on what you have to offer within a community can help you get to know customers and peers, extend your brand and build relationships: The key with either type of relationships is that you stay authentic and build a good rapport with everyone. According to Gruber:
