As a venture capitalist, I end up attending my fair share of evening events and conferences. When my wife (who grew up in Russia) and I were dating, she asked me about what I do at these types of events. I told her that I spend most of my time talking with other business people and meeting new business people I previously didn’t know--you know, networking.
“Huh … is there food there?” she responded.
“Usually,” I said.
“And drinks and booze?” She asked.
Wondering where she was going, I responded, “Well, I guess so.”
She chuckled and shook her head, saying, “I get it, not networking but nyet-working!”.
Interestingly, some entrepreneurs--especially those who come from technical backgrounds--would often agree with my wife. They tend to view the inefficient process of rummaging around meeting “random” people at events as largely a waste of time. They often think their time could be better spent improving their technology, planning a budget or working on sales strategies.
But the reality is that in the age of social media, the importance of networking to an entrepreneur has not diminished; its value (specifically because of social media) is actually higher than ever. Raising money and doing business is a social sport. Serious business relationships are not built online but first on human contact and trust. As amazing and powerful as the Web is, it will never replace a handshake.
The great thing about social media is that it creates a huge multiplier effect on the physical relationships that are built between people. Even a brief meeting can turn into a long-standing relationship through the power of LinkedIn, Facebook, Twitter and other electronic media. The ability to leverage a relationship has grown exponentially because of the power social media brings. I have a rule on LinkedIn to connect only with people I have actually physically met. I do that because I know that if I need to ask them for an introduction to someone they know, they are much more likely to follow through if they actually know me. LinkedIn empowers me to see not only my 1,900 direct connections, but also about 500,000 other people to whom my connections can directly introduce me. That’s a huge multiplier affect… but it all starts with a handshake.
If one attends only random networking events, the outings probably won’t be very productive. But here again, the power of social media can enable physical networking to be more efficient than ever. Not only can you filter events by their topic, oftentimes you can actually see who else is planning to attend along with their photos and background profiles. Sometimes you can even see mutual connections you have with other attendees. So, what started as a random networking event can turn into a highly targeted tactical event with specific people whom you know would be valuable to meet.
When it comes to raising investment capital for your business, I can assure you that the best business plan in the world will be insufficient—because raising capital is most certainly a social sport. The same is true of most significant business relationships. If you think about networking as a horrible waste of time, think again. Nyet-working may be what you’re doing when you are sitting at your desk.
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