Why networking matters and how to do it

I've been thinking and distilling the idea of human networks over the last few days. It all started when I was on Vikas Aggarawal's panel at the INSEAD entrepreneurship forum, where Geoff Ralston from YCombinator keynoted his thoughts on the human network, and where I received the book Network Advantage.

Henrich Greve, one of the authors of Network Advantage, posits that there are three levels of advantages based on an existing network:

  • 1st degree: driven by an ability to form relationships with complementary and compatible partners
  • 2nd degree: depends on how relationships are interconnected; integrated alliances (greater connections between all partners) provide advantages derived from greater trust among partners, whereas hub-and-spoke alliances provide advantages for breakthrough innovations (through access to new nodes of information)
  • 3rd degree: driven by your ability to include high-status partners, therefore raising your own status

    The book continues on explaining the various degrees and the tactical methods to strengthen relationships, so it's indeed worth a read. The key reminder for me was the 2nd degree network advantage - that hub and spoke alliances are better for innovative or fast moving industries where information flow needs to be continuously novel.

    alt this is a hub-and-spoke network btw

    This is reinforced by the weak times theory in organizational behavior, which explains that jobs that lead to employment are more likely to come from the weak ties with acquaintances than from closer friends. This is explained by:

    The more weak ties we have, the more connected to the world we are and are more likely to receive important information about ideas, threats and opportunities in time to respond to them.

    Ok - so now that we know that weak ties are insanely important and to maintain hub and spoke relationships, how do we go about cultivating those? The best tactics I've seen in startup land are:

  • Brad Feld's Community Hours: a whole day or half day devoted to short 20 min meetings, talking about anything
  • Mark Suster's 50 coffee meetings: 5 coffee meetings a week, I imagine 30 min each
  • Keith Ferrazzi's Never Eat Alone: Lunch meetings, probably around an hour (at the rate I eat)

    alt

    Yes, I just did go consulting on you

    For me I've done a ton of Brad Feld style community office hours. I find mine work well, especially when I was location agnostic.

    The meta-point is that disciplined cultivation matters - whether it's 5 meetings a week or some other metric. Why? Because network advantages aren't as powerful until you achieve scale. And networking is an insanely long-term game, where the utility rises exponentially as time goes by.

    But let's go back to Henrich's point of the 3rd network advantage - that there is inherent advantage of a high-status network because that raises your status. While I agree with this, I find a lot of people over-prioritize status in neglect of having a ton of low status. This exposes them to selection bias, which limits their advantage of information flow. Instead, they should think of their network as a funnel.

    alt

    In summary, the learning lessons are these:

  • developing weak ties via a hub and spoke approach is a strong network advantage - so cultivate them
  • tactics can vary - so find something that works for you
  • networks don't reap advantages until you have them at scale and that takes time
  • don't overemphasize status relationships at the cost of low status network advantage. Spend time on both