Workshop held at Global Entrepreneurship Week 2010.

1. Do you have the right
contacts?
Strategic Networking for
Entrepreneurs

2.  BSc Information Systems
 Research project on social networks
 MSc E-Business & Innovation
 Business Idea: around supporting networkers
 Dissertation: Strategic Networking for
Entrepreneurs
 Distinction + best dissertation – while starting up
 Now:
Benjamin F. Wirtz

3. Meeting 2-3 people at an event and
learning more about their needs and
challenges is far more valuable than
collecting (or giving away) 20 business
cards.
Many sales people get 80-90% of their
business through networking
organizations.
About 70% of all jobs are found through
networking
A referral generates 80% more results than
a cold call
Socially embedded employees are 40%
less likely to quit their job.
74% of all buying decisions are made on a
friend’s recommendation

4.  What to take away
 Networking important for venture success
 How to “plan” your social capital
 How to put the plan into practice
 Workshop (hands on!)
 Analyse your goals and needs
 Check if/how your network can help you
 Plan to align your network towards success
Overview

5. The lecture bit

6.  Talking to people
 Swapping business cards
 Selling yourself
 The art of making and maintaining
relationships
 It’s all about exchange !
 Giving and taking
Strategic Networking for Entrepreneurs
What is Networking ?
7

7.  Strong ties are less diverse – but more
efficient
 Networks in opposition to hierarchies and
markets
Strategic Networking for Entrepreneurs
Diversity in Networks
8

8.  Crucial for exchange in networks:
 Trust (comes from positive experiences over time)
 Perceived value of further cooperation by others
 Social Capital = value, which is embedded in
relationships
 Potential access to information, knowledge,
resources, contacts
Strategic Networking for Entrepreneurs
What is Social Capital ?
9

9.  Social Capital not valuable by itself
 Nor measurable
 But allows
Strategic Networking for Entrepreneurs
Value of Social Capital
Getting
Information
Spreading
Information
Access to
Resources
Transfer of
Knowledge
10

10.  Important throughout venture lifetime...
 ... but especially at the beginning
 Market insights, startup ecosystem
 Feedback and new ideas
 Examples
 Bank Loan vs. Hearing about public grants
 Comparing offers vs. Getting recommendations
 Stealth startup fail vs. Idea evaluation & pivoting
Strategic Networking for Entrepreneurs 12
Benefits (I): Getting Information

11.  Important whenever you start something new...
 ...and you have to do it yourself
 Tacit Knowledge
 based on experiences, culture
 Hard to transfer
 Examples
 Trial&Error vs. Learning from other’s experience
 Paying an accountant vs. Learn how do accounts
 Accept given deals vs. Learning how to negotiate
Strategic Networking for Entrepreneurs 13
Benefits (II): Transfer of Knowledge

12.  Before you start to buy new things...
 ... salvage, beg, borrow, bargain
 Or get time commitments
 Examples
 Paying a web designer vs. Asking a friend to do it
 Hiring a part-time employee vs. Family Member
 Renting an office vs. Using a friend’s spare space
Strategic Networking for Entrepreneurs 14
Benefits (III): Resources

13.  “Ideas that spread, win” (Seth Godin)
 Visibility
 Credibility
 Crowdsource network search
 Examples
 Advertising vs. Viral marketing
 Cold calls vs. Getting introduced
 Complex recruiting vs. Friend of a friend
employee
Strategic Networking for Entrepreneurs
Benefits (IV): Spreading Information
15

14.  Contacts do not come for free
 And Relationships need to be maintained
 Set targets...
 ...and check your performance
 If not on target, analyse why
 Or switch to plan B
Strategic Networking for Entrepreneurs
Effort vs. Value
16

15.  Networking by itself has no value at all
 It’s what you can give and get through
relationships
 Efficiency through diversity
 You can’t have everything yourself
 Dunbar’s number: You can’t have
more than (roughly) 150 friends
 Cognitive constraint
Strategic Networking for Entrepreneurs
Why a strategic approach?
17

16. Strategic Networking for Entrepreneurs
What is Strategic Networking?
 Aligning your network towards achieving your goals
 Strategic
 Analysing your needs and haves
 Planning your relationship portfolio
 Tactical
 Planning networking events
 Juggling socialising and working
 Operational
 The talking & shake hands part (exchange)
18

17.  Dunbar’s Number
 For every new relationship, you will drop another
one
 Give before you take
 Make introductions yourself
 Sustainability
 People are connected
 Good/bad reputations spread
Strategic Networking for Entrepreneurs
Ethics of Networking
19

18. The workshop bit

19. Strategic Networking for Entrepreneurs
Strategic Networking Framework
21
Analysis
Process
Planning
Process
Networking
Process

20. 1. Define a goal (e.g. succeed with a business
idea)
1. And make a rough plan how to achieve it
2. Define your needs
1. Information Input (e.g. competitors, market
situation)
2. Tacit Knowledge (e.g. how to run a start-up)
3. Resources (e.g. funding)
4. Information Output (e.g. to get a strong partner on
board)
Strategic Networking for Entrepreneurs
Analyse
23

21. 3. Analyse what you have and whom you know
1. Match to needs
2. Plan A (easy) and plan B (backups or ideal)
3. Is your relationship at the right level?
4. Create your Relationship Portfolio
1. Know your “hubs” (people with lots of contacts)
2. Ensure diversity
Strategic Networking for Entrepreneurs
Plan
24

22.  Use tools to support networking
 LinkedIn (find suitable contacts)
 Foursquare (meet them “on the fly”)
 Twitter (find out what they are up to)
 Trust serendipity
 Reflect if you are on target
 HandyElephant
Strategic Networking for Entrepreneurs
It’s all planned – what now?
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23. Strategic Networking for Entrepreneurs
Networking Cycle
Prepare
Interact
Post-
Process
26

24.  For shy/introverted people:
 http://www.slideshare.net/sachac/the-shy-connector
 Ground breaking paper:
 Granovetter (1973) – The Strength of Weak Ties
 For short breaks:
 TED.com (e.g. Daniel Kahneman)
 Wikipedia: Expected Utility Theory, Prospect Theory
Strategic Networking for Entrepreneurs
Further Reading
27

25. Benjamin F. Wirtz
Twitter: benfwirtz
Feedback and recommendations highly appreciated !
Find the slides at http://bit.ly/StratNetEntre