How to Make Your Business Network More Useful
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In Chapter 19 of 21 in his 2011 Capture Your Flag interview with host Erik Michielsen, business school professor Ben Hallen begins by identifying critical needs and also by making sure the network extends into existing and future challenges. He differentiates sales and advice giving networks and puts a heavy emphasis on diversifying network contacts. Hallen is an Assistant Professor of Strategy and Entrepreneurship at London Business School.

Transcript


Erik: What elements most affect the strength of an entrepreneur’s network? Ben: So what most affects an entrepreneur’s network? Well, entrepreneurs do inherit networks, okay? So you take your networks with you, and so to the extent that you’ve been fortunate enough to be in a great set, or just a varied set. I mean it’s not even great, it’s about being in a varied set of social settings, building different relationships, you know, with your undergraduate experience, later with your MBA, through social communities, through religious communities that you develop those networks in different settings, preserve those networks, that leads to a very large and diverse network, and that’s very valuable. That said, it’s obviously great, if you bring a diverse and large network with you but that doesn’t always happen, and so one of the things I’ve loved finding out in my own research is that inheritance is one path entrepreneurs take to their networks but that entrepreneurs can and, in fact, even the very best entrepreneurs who have these amazing networks still do this, they build their networks at the same time, and so you can very much build the network when you’re out there being an entrepreneur, and successful entrepreneurs do both. They look to bring networks with them, but even if they’re well connected they recognize sometimes they don’t know the right people in their network, and so then they can build it, and they do it in a couple of ways. And so the great entrepreneurs, they do something called casual dating. They get out there. They approach someone, not necessarily looking for a high commitment from them. They’re not explicit about, you know, I want you to do this for me, instead they approach the person asking for advice, okay? And what that does is it allows an open, collaborative trust, a trusting environment to develop, okay? And so that then helps accelerate the relationship; and what it also does is it decouples getting to know one another from the decision of do you wanna work together, because some relationships aren’t going to necessarily pan out, but if you couple that decision together of getting to know one another with having to make a big decision, that’s gonna put people on edge, and they’re gonna be very cautious. So you don’t wanna do that, so you wanna separate out those two. Other thing you do when you’re looking to build your network is you want to time around your proof points. These are simple signals. We all know them, you know, there’s the big accomplishments we’ve had that we’ve been working on a big project, but it reaches the point that it’s very clear that we’ve just had something happen. There’s no debate about it. Third parties are talking about it. You know, and that includes, you know, getting a big client for a startup company. You know, if you time right after that, you can point to accomplishments such as that, and that helps confer some legitimacy and some excitement, it also confers recency in momentum. Obviously you want to be careful but you wanna take advantage of those windows of opportunity. You wanna understand when they are, when you’re out there, you really wanna be developing the network. At the same time you also wanna recognize, and this is more so for entrepreneurs than in another settings, that some people may be less than forthright when they’re building their networks with you, and so you wanna understand what the other person is after. And so you wanna look at their actions. You wanna scrutinize their interest. And you wanna sometimes – and unfortunately, you have to – you do have to do this, you sometimes have to discount what they say, unless they’re saying they’re not interested; in that case, that’s usually a pretty honest signal, but if they’re saying they’re interested and you’re an entrepreneur, sometimes that’s true; sometimes they’re interested but not necessarily for the reasons you hope they’re interested, and so you have to look at their actions. And we can think of broad examples in life about where this applies too, but you wanna look at how quickly are they calling you back? Are they looking to, you know, do due diligence on your company? Are they calling up your customers? Are they the ones scheduling meetings? You know, are they scheduling meetings soon rather than later, and so you wanna combine all those things together, you know, that you wanna start with the casual dating. You wanna take advantage of the windows of opportunity that occur around proof points, and then you do wanna scrutinize the interest of others. And then if you’re looking to transfer the relationship into a commitment, sometimes you actually have to craft alternatives. So if you’re looking to raise money, for instance, you sort of have to encourage people to take the first step, and so you need to sort of craft an alternative that makes them realize this is probably the right time to go ahead and commit to -- to this.