Near the end of my undergraduate studies, I attended a study and preparation session for my certification test in hotel industry analytics. The head of the Hospitality Tourism Management program at Western Carolina University, Dr. Steve Morse, led this session. During this review, to a room of about 20 of my classmates and myself, Dr. Morse proclaimed, “The opposite of networking, is not working.”
With my undergraduate degrees in Marketing and Hospitality Tourism Management the subject of networking is thoroughly covered in nearly every class, especially in courses with curriculum center-focused on fine-tuning student skills to help them to become an asset and an effective leader within a successful organization. Networking is social capital.
Two things are of upmost importance when we are discussing the pursuance or an entrepreneurial venture, financial and social capital. Of the two, I dare say the latter is so vital that it should be weighed much heavier in importance and be of great focus, even and especially when placed next to the former. The cliché, “Who you know is as important as what you know” (and it could be argued that it is more important than what you know), is undoubtedly true. Perhaps, a better statement would be, who you know is as or more important than the finances at hand or the potential financial capital to come. Financial capital is important too, but finances to fund a venture can be accumulated and accessed in a variety of ways. In fact, in “The Founder’s Dilemma”, Noam Wasserman points to research that has shown that people who can accumulate more social capital before founding are able to attract more financial or seed capital much easier and much more quickly.
Networking really pays off, knowing and meeting the right people can really turn things in the founder’s favor. In Stephen Key’s article for Entrepreneur.com, “Meeting the Right People Is Worth It, Even If You Have to Pay for Access”, he addresses a very relevant question, “When Is It Advisable To Pay For Access [to meet/network with the right people]?” In other words, when should you invest (social capital is very much an investment) in networking. Key says, “Yes, your business might be limited on funds, but if you’re burning through cash because you can’t get in touch with the right people, maybe you can’t afford not to.” This is such a crucial point, it is easy to see how social capital can work in favor for a founder in assisting in gaining financial capital and help to soften the blow between starting up and staying afloat.
With Keys advise, the actuality is that a founder would be taking a bit of their financial pie and utilizing it in a way that would influence the construction of social capital which in turn would help create financial capital growth and in the long run, wealth and profit. Nevertheless, most networking that we do is free or even available at a low cost, whether it be a little time or a little money. The people we meet that could help us in our entrepreneurial journey, are priceless.
Who you know, can help you grow.
Key, Stephen. “Meeting the Right People Is Worth It, Even If You Have to Pay for Access.” Entrepreneur. October 03, 2014. https://www.entrepreneur.com/article/238026.
Wasserman, N. (2012). The Founder’s Dilemmas. Princeton, NJ: Princeton University Press.