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For countless entrepreneurs, the tried-and-true way to find funders and startup staff is through peer-to-peer connections—but too few are properly focused on continually expanding their networks.
There are many other important steps on the road to startup success: revenue growth, hiring the right talent, market knowledge, the list goes on. But there is one metric that deserves significant attention in this process: expanding your response to the age-old adage, “It’s not always about what you know, but WHO you know.”
“WHO “you know” often includes the support systems that are already built in among those in the wealthier economic classes. These successful entrepreneurs have navigators—successful relatives who can offer introductions, former professors or classmates who can review business proposals, and so on. n. – which lower-income entrepreneurs without stable social networks usually lack.
It’s probably true that entrepreneurs like Jeff Bezos or Elon Musk are so unique that they would have succeeded regardless of how they got started. Yet entrepreneurs who don’t come from privileged backgrounds can’t retroactively go to a top-tier school or land an entry-level position at a promising company. They cannot turn back time and ensure that their social circles include people as successful as they hope to be one day. What they can do is focus on what is in front of them. Most importantly, they can intentionally build their social capital.
Related: When “Who You Know” Can Actually Hurt Your Entrepreneurial Success. That’s why.
Fortunately, at the same time as confirmation that many founders don’t have access to the right form of social capital, I’ve seen more of those who do have it find ways to share or provide it. One example is Vimenti’s Project Makers, one of my company’s projects that seeks to develop entrepreneurial skills in young workers.
The benefits of programs like this and many others go beyond sharpening a potential business idea. They talk about the heart of social capital, which is the development of trust between talented entrepreneurs who may lack opportunities and established sponsors, mentors and collaborators who can help them try to get where they want to go.
This trust is vital for entrepreneurs at all stages, but especially at an early stage. As most of them well know, they are looking not only for money, but also for guidance – advice on shaping a business that they can only get from those who have done it themselves and are therefore in a social stratum with which they would not otherwise interact.
Think of a community and a person who only knows the people in their immediate environment. If they are not able to incubate the trust part – how to build trust and how to create an environment in which trust can be developed – they will never get to the part where this invaluable asset becomes part of their social capital.
Many government programs attempt to bridge the divide in class relations. But in my view, these initiatives only highlight the need for entrepreneurs themselves to take greater ownership of networking decisions.
Related: How Cultivating Relationships Helps You (and Your Company) Thrive
Consider the federal government’s Recompete pilot program, for example, which offers up to $200 million to communities that have a prime-age employment gap well below the national average. This is a worthy program that my organization hopes to use, but it cannot unilaterally correct long-standing gaps in inequality. Injecting financial capital is important, but by itself it does not solve the problems of those who really need social capital.
Academic research on class relations suggests that for every dollar of real capital brought into struggling communities, an equal amount must be invested in the form of social capital. This is not theoretical; for example, Jobs for the Future is a nonprofit organization that seeks to transform the U.S. education and workforce systems and drive equitable economic progress. But at its core, it’s a form of social capital: a program to increase the cross-class connections of prospective low-income job seekers that includes better education, training, mentoring and, most importantly, exposure to the types of work already successful people hunters may never have before.
There is no quick fix to this problem. Class is the great divider between most countries, not just the most enterprising ones like the United States. Addressing this issue can be a low-cost way to meet the current hiring needs of start-ups and support economic opportunity and mobility. This is important on a large scale because entrepreneurship is usually how economic mobility is created.
This is a statement I feel confident saying in part because as the executive director of an organization that supports a job accelerator, job training center, school programs and a health clinic in Puerto Rico, we work on similar attempts to increase social capital , too.
The gap between what people in wealthier communities take for granted and what those in low-income communities lack is more apparent in my work. I am constantly confronted with the trauma, guilt, and shame associated with poverty. I see how the barriers to mobility are as much psychological as they are physical, and how the traps that keep poor people poor can only be overcome through exposure and connection with those who have never known those limitations.
Especially for small businesses without a lot of resources, being able to join groups that intentionally connect with entrepreneurial mentoring can be great. It’s not just about immediate feedback on marketing, sales or production. The expected result is an entrepreneur who has expanded their capacity to do business because their network has grown and hopefully will continue to grow.
It is the last mile of entrepreneurial economic mobility that is the most important to achieve and the most difficult to achieve. This is what I know – and it’s also based on who I know.