By Jim Pulcrano
Reputation is owned by the people who gossip about you1.
This disquieting statement is by one of the preeminent researchers in the field of social networking, it leaves us with the impression that we can do little to affect what people say about us. The writer, Dr. Ronald Burt, goes further, stating that the purpose of those gossiping about you is to build relations with one another, which need not be about accuracy so much as empathy (with each other, not you). Faced with a decision about whether to trust you, people turn to trusted contacts, strong ties. Trusted contacts are likely to have similar views of you, so they are likely to report accounts of you consistent with their own views, i.e. if the person talking about you has a negative image of you, the good friend he is talking with is likely to mirror that view, with the goal of strengthening their relationship. The goodness or integrity of your name is not relevant in this social transaction.
Having a good reputation is essential to succeed in business, as it lowers our costs. Customers want to buy from companies with good reputations. Employees want to work for companies that their friends talk about favorably. Suppliers are more likely to offer good terms to firms with stellar reputations. Bankers might even loan money to a company with a great reputation. This applies to all companies, but is accentuated for startups and entrepreneurs who face the liability of newness. Buying from, selling to, working for or loaning money to an unknown and untested company takes courage, and anything that an entrepreneur can do to improve his or her firm’s reputation is worth considering.
The good news is that my work with entrepreneurs and startups revealed that we are not completely helpless in managing our reputations, and that our networks and networking skills can help us tremendously. Trying to learn more about networks and networking habits, I surveyed 850 entrepreneurs and managers from around the world, who provided more than 60,000 data points. The findings in this paper are from the 644 entrepreneurs in the study, focusing on one particular measure of success: reputation. We can do something about our reputations, and we are not 100% dependent on gossip!
From my research the reputation of your startup is impacted by:
1. Getting competing managers to talk about you.
2. Your sense and confidence that you have adequate contacts.
3. Your comfort in following up with people about your startup after your initial contact.
4. Your belief that people get value from a business conversation with you.
5. How frequently you contact people outside of your team.
6. The intensity with which you attend events explicitly for networking purposes.
7. Your estimation of how much you have learned from people outside your company.
8. How much you learn from others; which partially depends on how confident you are.
From my research and experience I know that there is no prescription or simple recipe for networking. It cannot always be organized, scripted and executed perfectly.
“A sizable amount of my networking is without a clear objective. You must be open to serendipity (i.e. I sat next to so and so at dinner and that lead me to such and such). I invest 20% of my meetings and travel in this fashion, and it has by far paid off more than organized networking. Maybe this is because startups, high-tech and venture capital are inherently unpredictable businesses.” Dag Syrrist5
But we must not leave our reputations and networking all to serendipity. The above 8 points are intertwined and in some ways interdependent, but let us explore each of these to get a solid view of what an entrepreneur can do to improve the reputation of his startup.
1. Find a way to get the competition to talk about you.
It goes without saying that if managers in competing firms talk about you, you and your startup must be doing something that excites or worries them Data was gathered by asking entrepreneurs, “To what extent do managers in competing firms talk about you? Less than 2% were willing to say “a great deal”, but over 43% were able to say “much” or “somewhat”. In my study this variable had a significant impact on success when measured by reputation of the startup. The remaining 7 points are also important, but none were as important as this one, so, how do you do this?
Being active in the marketplace, with customers and suppliers, will certainly spread the word about you. That is what you do every day, but that’s probably not enough. What about speaking at industry conferences? Offering papers to the appropriate journals? Ensuring that the journalists who cover your field know who you are? Creating a blog? Commenting on the blogs of others? Writing a review on Amazon.com for a book in your field? Self-publish an e-book? Write a recommendation on LinkedIn on someone you worked with?
Or perhaps pay close attention to your reputation in cyberspace. Log on now and look at how David Marcus8 has managed his LinkedIn site since his founding of GTN Telecon in 1996, all the way up to his nomination in March 2012 as President of PayPal.
Or maybe we could learn from the example of Xavier Niel3 and his exploits on Twitter as he launched Free Mobile and declared war on SFR, Bouyges and France Télécom:
On a December 2011 afternoon Xavier Niel sent out his first ever tweet, in English: “The rocket is on the launch pad.” The Wall Street Journal pondered his cryptic tweet, as did French tech blogs like Journal du Geek. Niel then went silent for a month. He returned to Twitter in early January to taunt 60,000-plus followers with the first three lines of Paul Verlaine’s “Chanson d’Automne,” known as the coded radio message broadcast in 1944 to alert the Re¬sis¬tance that the Allies were preparing to storm Normandy’s beaches4.
Of course, one could argue that the best way to get competing managers to talk about you is to win clients away from them.
2. Make sure you have the people you need in your network when you need them. This sounds obvious, and almost futile. How can I know whom I need to know even before I start my company? How do I recruit people into my network and build relationships with them before I know what my product is going to be?
“When you change industries like I did, you feel like you are starting from scratch. After 3 years, I have only 35-40% of the network I really need.” Hadi Barkat2
The entrepreneurs in my study were asked: “When you started your firm, did you have the necessary business contacts? Did you know the people you needed to know to start well?” They were also asked, “Today do you feel you have the contacts you need to assure the success of your firm?” Just over 33% answered the first question very positively, and this increased to 63% for the second question. The median age of the startups in this study was 3.3 years, so one can assume that it takes more than 3 years for 30% of the entrepreneurs to build up the contacts they need for their business.
There are two major issues at hand.
A) We should all be paying attention to our networks throughout our careers, as one never knows when you’re going to need that asset.
B) If you didn’t build, nurture and maintain your network before starting your company, or you just don’t find yourself with the right people in your network today, what can you do to build it up fast, or at least faster than the entrepreneurs who needed over 3 years to be happy with their networks?
I hope that “A” is obvious, and that the readers who don’t have the attitude, mechanisms and routines in place will start now.
Attitude: Is it obvious to you that your network is an important asset? Is networking part of your normal thinking, your “standard operating procedure”? Are you willing to put some time into it on a regular basis? Do you respond to contacts when they ask for help and advice? Do you show empathy to people? Metaphorically, is your door open? i.e. Do people feel like they can approach you?
Mechanisms: How do you keep track of the people you know? Do you have a database? If not, then consider using LinkedIn, Viadeo, Xing, Plaxo, etc (93% of the entrepreneurs in my study were on one of these). MS Outlook, or an Excel sheet on your laptop is nice, but the advantage of social media is that your contacts do the updating for you, and it’s easy to keep up with their news. Again, I suggest you look at David Marcus’ LinkedIn site.
Routines: Do you have any tools or rituals for keeping people up-to-date on you (and they with you)? Christmas cards? Holiday greetings? Birthday wishes? Do you congratulate people when you see that they have been promoted? Do you update your LinkedIn page when there are significant changes in your career? More than 20% of the entrepreneurs in my study consulted their social media links daily, and another 19% connected or updated it every second day, and 37% at least once per week. What pace is right for you?
A professional webletter? Do you blog or use Twitter? Jean-Louis Gassée12 is known for provocatively sharing his views on companies (the Facebook IPO is a recent example) through his Monday Notes blog.
B is more difficult, as seen by the fact that 70% of the entrepreneurs in my study did not have the contacts they needed at the launch of their companies. One action that you can take if you find yourself in this position is to hire people for their competence and their fit with your company, of course, but also for their network. All things being equal between two potential key employees, which one brings the best network with him or her?
And you do know people, and those people know other people. From the so-called “small world principle” we know that there is usually no more than 6 steps between any one person and another. On LinkedIn they claim that it is today only 5 degrees of separation, and if you look within a single country it is typically no more than 3 degrees of separation. With effort you can always reach the people you need, but try to avoid the “shotgun” approach, of just blasting your name trying to link up with everyone. I’ve come to recognize the “joiners” on LinkedIn – they contact you even though you’ve never met, they already have 500+ connections on LinkedIn and the list of LI groups they belong to is longer than a page…. Don’t become one of these.
“Serendipity favours the networked. Always err on the side of openness to enable the serendipitous to emerge” Tom Hulme6
3. Getting introduced is not enough. You must be comfortable following up with people after your initial contact.
“I am comfortable following up with people once I have contacted them about my startup.” Over 46% of the entrepreneurs responding to my study strongly agreed with this statement and this correlated well with reputation. But over 50% were not comfortable….
“I can share my story at Google when we were at that inflection point. I sent one e-mail to Ron [Conway9], and Ron sent a bunch of e-mails, and pretty soon within a week we had almost every single media company that was relevant to our space”. Manish Chandra10
“It is hard to follow up after a first contact with someone, whether it is an introduced or a direct contact. It needs discipline. It is easier to do it after two or more meetings, physically or virtually. Kind of like “dating” isn’t it? An introduction in itself is not useful if there is no follow up.” Maël Guillemot13
If what you are seeking is complex, embedded or tacit knowledge, as it often is with high-tech ventures, or business in new arenas, it is unlikely that you will be able to explain everything about your product or your company’s need in your initial meeting, especially if it is a social setting. You’ll need to have your so-called “elevator pitch” ready so that this new contact has some idea of who you are, and believes that a second discussion is worthwhile, but then comes courage. Making the call and asking for a follow-up meeting. You’ll be tentative. Unsure of how to word your email or how to get past his secretary on the phone. Worried about rejection.
But not trying assures failure. Success belongs to the bold.
“Whether and how you follow up depends on what you’re trying to achieve. If you have a clear objective in mind, and that person might be of help, then you must follow up after the initial contact”. Michael Näf14
“I’m comfortable following up. The way Helvetiq launched was through someone connecting us with someone else who then put us in contact with Vevey’s mayor. The city liked our concept and put in an order for 500 units before we even started production. Et voilà, it was the point of no return…. But following up can also be frustrating I find. More than once, I just wasted a lot of time…” Hadi Barkat2
Seen on the CV of a successful entrepreneur early in his career, under special skills: Leaves good voicemails. Laugh if you will, but are the messages you leave compelling enough to get a stranger in a powerful position to return your call?
“The ultimate networkers have no inhibitions. They figure they have nothing to lose and will just pick up the phone and call if they need something” Debra Engel7
“Building a leadership network is less a matter of skill than of will… the word “work” is part of networking….” Herminia Ibarra and Mark Hunter11
4. Your belief that people get value from a business conversation with you.
We have conversations for many reasons. Friendship, daily transactions, etc…. Humans are social animals and conversation is a constant for most of us. But do people get value from their considerations with you? Do people walk away from a meeting with you buzzing with excitement and new knowledge, ideas and inspiration? If they do, they’ll be back, and they’ll talk about you, and your reputation will grow. In my survey, when I asked, “Do you believe that people get value from a conversation with you?”, almost 10% responded with “always” and 74% said “usually”.
“I try hard and I hope people get value. In particular, I like to help entrepreneurs and creative people. Ask me about bootstrapping and I’ll help relentlessly”. Hadi Barkat2
How do you know if the person sitting across from you is finding the conversation with you useful and interesting? Are they looking at you or their watch? Are they taking notes and asking relevant questions? Are they engaged and energized? If not, why bother? Why have this conversation? It is a waste of time for both of you. My hope is that those reading this article will seek to be in the 10% of those who believe that people always get value from interaction with them. In my opinion, “usually” is not good enough.
For an entrepreneur with an unknown start-up it is fairly easy to tell if people are getting value from a conversation with you – they seek you out and they keep coming back. If you’re working for a large corporation and you have a big title there is a risk that people are talking with you and showing interest only because of the office you hold. They’re interested in your role, not your brain. If you are the CTO of UnknownCompanyX there is little likelihood of this happening.
5. How often you are in contact professionally with people outside of your team
Successful entrepreneurs appear to be a gregarious group of people, with 46% saying that they are in contact with people outside of their company several times per day and another 42% at least several times per week. And many do at least some of this in a very focused manner – 34% sought out specific individuals for information for their business at least 10 times per month.
“It depends on the week, but typically I’ll be in contact with people outside our team maybe 20-30 times a week.” Michael Näf14
It is obvious at this point, but still worth saying: If you do not believe that you need outside help or contacts, you are unlikely to make the effort and take the time to do it. Thus the first step will always be admitting that you need outside help. This is not an admission of failure.
6. The intensity with which you attend events explicitly for networking purposes
Though not an overly strong correlation, there is an association between attending events specifically for the purposes of meeting new people or maintaining relationships, and a good reputation. Two-hundred and fifty-four of the people in my study (32.5%) attended at least 2 or 3 events per month. Only 14% said that they went to none.
“Events can give you a good opportunity to efficiently get in touch with a number of people, but it always pays to check who’s attending beforehand, and to do your homework and be prepared.” Michael Näf14
“I attend 5 to 10 large international events a year to find customers and potential partners. And locally (nationally or regionally), I attend another 5-10 smaller events a year. Personally I think that networking for the sake of networking is not productive unless by chance you meet a good contact by being very open. There should be a clear motivation behind going to an event, with an objective for maximizing ROI”. Maël Guillemot13
“Do you occasionally “walk on the wild side” and participate in events where you are likely to know no one and be a bit uncomfortable?”
Do you have a target for yourself on how many events per week or per month you’ll attend so that you meet new people?
If you do, do you only go to events that are directly linked to your business, or do you occasionally “walk on the wild side” and participate in events where you are likely to know no one and be a bit uncomfortable? Whenever I travel to Silicon Valley I always register for at least one networking event – two years ago it was “Women & Technology” – a great event with 200 women and 10 men…. Yes, I was uncomfortable, but I met several very interesting people and heard great speakers.
7. Your estimate of how much you learned from people outside your company.
Do you really know everything you need to know in order to run your company? If you go beyond your own brain to the rest of your team, do you still have all the knowledge and competence necessary to be successful? If you think so, you can skip to the conclusions. If, like many successful people, you feel that you can learn from others, you are in the humble majority. Almost 61% of the entrepreneurs in my study felt that during the previous month they had learned “quite a lot” from talking with people outside their company.
“I learn so much from others. There are a couple of people (mix of customers, partners and sceptics) I consult on a regular basis to learn about market trends or to test new ideas.” Hadi Barkat2
But doing this requires, first, the attitude that I can learn from others. That there is something to be learned. Yes?
Secondly, it requires time. Do you set aside time to talk with people outside of your team? Do you attend events specifically for networking purposes? Back to points #5 and #6 above.
But finally it requires a certain amount of reflection. This is about how much you estimate you are learning from others. Stop for a second, right now, and think: What did I learn today from someone else? When was the last time I was surprised by a connection or piece of knowledge that someone I hardly knew told me? How many days go by where I see nothing new? Starting today, take 2 minutes each day to think about this, and in a month it will become a habit for you, and that habit will create an idea-seeking competence that will put you ahead of your competitors.
8. And how much you learn from others partially depends on how confident you are.
Almost 60% of the entrepreneurs in my study felt that they were perfectly qualified or overqualified for what they were doing in their startup. Close to 60% also felt that they could run their business better than their competitors. And just over 60% felt that they were more successful than others. Obviously entrepreneurs are a confident group, as one would expect from people trying to do the impossible, trying to create something from nothing.
“My research showed that the successful entrepreneurs, the ones who are building their reputations, partly through learning from others, are also highly confident.”
Unfortunately, we often find that confident people are so confident that they feel no need to confide in others, to ask questions and show what they do not know. My results from these 644 entrepreneurs around the world showed that the successful entrepreneurs, the ones who are building their reputations, partly through learning from others, are also highly confident. They have the courage to try new things, perhaps talking with strangers, experts or competing managers, they learn and they build their confidence and reputations.
“People don’t help another person who just comes and says “Oh, help me!”… You need to have your own hypothesis ready, and then ask their opinions. Not only does this require and show confidence, but it also might provide some learning to the person you’re asking for help from.” Hadi Barkat2
“Asking very smart people how to do something requires a high level of comfort and self-confidence. I see that most startup CEOs who don’t are actually the weaker ones, and usually don’t succeed. Smart people like to tell people what to do, so it is not hard to get feedback from them…. It takes effort and courage.” Dag Syrrist5
“Probably the best way to start a conversation with someone you want advice from is – I heard you are great at…. Yes, that’s flattery, but if you chose this person for advice chances are he or she deserves the flattery”. Debra Engel7
Entrepreneurs have a lot to do to be successful. Building up their reputations and that of their company is but one of the gargantuan challenges that they face. Circling back to the conclusions of my research, if you want to own your reputation, honestly ask yourself these questions to see if you are using your networking skills and your network to improve your reputation:
- Do I have a way, the right way for me, to get my name in front of competing managers?
- Do I have a way of keeping track of my contacts?
- Am I open to people who want to meet and talk with me?
- Do I attend enough events? Do I only go to events where I know everybody, or do I occasionally take myself out of my comfort zone?
- Do I follow up introductions appropriately?
- Am I up-to-date on the social media most important in my field?
- Am I humble enough to ask for advice?
- Do I know what I am looking for when I ask for advice, with a hypothesis already in hand?
And, most important of all:
- Do I believe that people, and networking, are important for my success?
“Good networking requires investment. It takes time and effort to meet and then stay in touch with people. The entrepreneurs I see doing this well do it as part of their job, and these are the ones who are usually successful. But serendipity still plays a part; timing and being at the right place at the right time is damn near close to everything.” Dag Syrrist5
The French version of the article is published in Expansion Management Review in September 2012.
About the Authors
Jim Pulcrano is Executive Director at IMD, and a member of the EMBA Teaching Team, focused on entrepreneurship. He received his doctorate from the Grenoble Ecole de Management with research focused on entrepreneurial networking. He has an MBA from IMD (1984) and a BSc in Mechanical Engineering from the University of Missouri-Columbia (USA). He has been personally and financially involved in 6 startups in the United States and Switzerland, and has supported and coached hundreds more.
1. Ronald Burt, Structural Holes, Harvard University Press, Cambridge, MA, 199297, 6, 267-278.
2.Hadi Barkat, Founder and CEO of Helvetiq (www.helvetiq.ch), April 2012
3.Xavier Niel, Founder of Free, Iliad, Worldnet and Kima Ventures
4.Adapted from Forbes.com, March 9, 2012
5.Dag Syrrist, Silicon Valley venture capitalist, Vision Capital, May 2012
6.Tom Hulme, Design Director, IDEO, May 2012
7.Debra Engel, Silicon Valley angel investor, early 3Com executive, May 2012
8.David Marcus, French/Swiss serial entrepreneur, President of PayPal
9.Ron Conway, Silicon Valley angel investor, May 2012
10. Manish Chandra, entrepreneur, reported by Peter Thoeny in Social Business, Oct 2011
11.Herminia Ibarra (Insead) & Mark Hunter (journalist), How leaders create and use networks. Harvard Business Review, Jan 2007
12.Jean-Louis Gassée, French venture capitalist, founder of Be. Inc and former Apple executive.
13.Maël Guillemot, Founder of Klewel, June 2012
14.Michael Näf, Co-founder of Doodle, June 2012