“What does, ‘How do you network’ mean? It’s a bit like asking, ‘How can someone be accepted by society,’ said an interviewee for this article. There is considerable justice in his remarks. While not all networking experts were “acceptable by society” when they were young, there is a similarity between the two things: real networking experts network as second nature, without being able to explain exactly what they are doing.
Now that does not mean to say that an ordinary person who does not have hundreds of friends on a daily basis cannot learn something from the experts and improve his interpersonal skills. This skill is critical for founding a start-up, and for people for whom networking does not come easy, they must simply work harder. For those for whom networking comes easy, they should invest in fostering and honing the skill in order to get the maximum out of it.
In the beginning, when a venture does not yet have any money or a product, and even if its idea is brilliant - it is still only an idea. Turning it into reality requires people and their resources. Partners and key people, consultants who have to be paid and advisors who work pro bono, investors, customers, subcontractors, and others are needed. The incubator experts advising the winning start-ups in the “Globes”-Bank Hapoalim (TASE: POLI) Smartup2 competition, tried to crack the question of how to network.
“Why is networking so critical?” asked Ernst & Young Israel partner Eli Barda and a member of 8200 EISP, who is advising HopOn Ltd. as part of the smartup2 program. “Ultimately, trust is a basic component of interpersonal relations, especially in business, and there is no trust without acquaintanceship. The more people who know you and your venture, more doors will be opened to you and more opportunities will turn up on your doorstep.”
Barda adds, “I attended a meeting with an investor at a new company. The investor wasn’t sure about the technology and the market, but after the meeting, he called another entrepreneur with whom he had previously worked and received such warm recommendations about the team that he immediately called back and asked to close the deal. This is a completely true story.”
“In contrast,” he continues, “I advised a company that wanted to float in the US. They arrived in New York full of motivation and a good company with all the necessary numbers, but the investors said, ‘Who are you? Why have we never heard about you?’ They wanted to get to know them better and asked for the offering to be postponed.”
The right message
Pearl Cohen Zedek Latzer Baratz senior partner Doron Latzer, an expert in commercial law, has extensive experience with US and Israeli companies. He is also an angel investor and partner in 82000 EISP. He thinks that before going out to establish ties, you should first hone your message. “Every time that you meet someone, you should think about how you are different from what he already sees. You should think from his perspective,” he says.
Barda also stresses the importance of a clear message, saying, “Help for a start-up usually comes from the second circle of acquaintances and so on, from someone who has heard from somebody. That is why it is very important to package the company’s proposal in a clear and memorable sentence that will withstand word-of-mouth misunderstandings.”
Ask for help and pay for it
A new entrepreneur sometimes has little money, experience, or ties to give, but it turns out that market sources are very open to provide assistance, even if there is no immediate payment. They too were once young and needy and it should not be denied that they want to be remembered if the start-up becomes a great success.
Latzer advises seeking ties among service providers, such as lawyers, accountants, and business consultants. “These are people who, over the years, have built up a huge network of ties, which you can access, but it does not happen by itself. You have to reel in the connection from an associate by telling him what you need and are seeking.”
Be open to suggestions. Even if you have decided that you want to meet Google’s CEO, listen closely if the service provider suggests other people. “You can assume that your advisers have already seen some of the problems you are facing at other start-ups, and they know exactly whom to approach,” says Latzer.
Accountants and lawyers can be contacted even if you have no commercial relations with them, says Latzer. “When entrepreneurs come to me, the relationship will usually begin with me seeking the money for them, and when the money is found, I’ll do the deal for them.”
Many people offer advice out of goodwill. Explore.Dream.Discover. head of venture development Roy Oron, who is advising GreenIQ Ltd. as part of the Smartup2 program, is always ready to listen to and help an entrepreneur, even if the incubator is not planning to invest in him at the moment.
“Here, you already have an address. What is the compensation for these people for their effort? The exposure to exciting ventures,” says Latzer. “It is not necessarily that he’ll strike the jackpot. No one really knows at this stage who will strike the jackpot. It’s the beauty of the thought and the entrepreneur’s enthusiasm.”
Barda says, “If someone does a favor for you, at least say thank you. It is possible to return the favor if you want. It’s possible to praise him to others for his effective help and when you establish an advisory committee, offer him a seat on it.” Nielsen Innovate CEO Esther Barak-Landes, who is advising ZeekIt in the smartup2 program, says that the people from whom you sought advice can be a springboard for new ties. “Every meeting can lead to another meeting. In my opinion, put aside the paranoia, ‘they will steal my idea’ and talk with as many people as possible. You learn something from everyone, and you meet more people,” she says. “Over time, people don’t normally work for free, so you have to pay your really important advisers one way or another (salary or options).”
Friends bring friends
The best way to reach someone is via someone else. “When I present a company for investment and explain why it is different and special, I am persuasive because I know a lot companies. I tell the background story in a way that the entrepreneur cannot tell it himself, for fear of being perceived as a braggart. Investors are flooded with requests, so they are looking for reasons to reject a request. If they get it from someone with whom they have a relationship, they look more meticulously,” says Latzer.
Rhodium Ventures venture partner Oded Hermoni, who moved to Silicon Valley two years ago where he has built a major regional network, says, “I receive 30 requests a month from Israeli start-ups asking me to arrange meetings in Silicon Valley. This mediation is a process that definitely requires thought. The mediation, in other words, seeking people who can really help you and then building a story by correspondence as to why the two parties can help each other.”
The mediation is usually free of charge, but if it becomes intensive, the mediators may ask for shares, or a fee. “Besides looking for work, we never ask for payment, because finding work for a person is sacred,” says Hermoni.
Oron says, “It is always better to arrive via a mutual acquaintance, but if there is no one, cold calls are an excellent way to work. Someone small and quick and lacking resources fights guerilla warfare. We’ve set some specific quality targets that are worth investing in, we’ve learned everything about them from their investment or acquisition strategy to their hobbies and favorite sports teams, and we try to enter the cracks. For example, if you know that they always each lunch at a particular place, suggest to meet them there.”
Do not go too far and be considered as stalkers, of course.
How to behave at a conference
Conferences are important networking arenas, for holding many meetings, and brief meetings with top executives without the barrier of secretaries and junior managers. However, to maximize the value, you have to be well prepared.
“It is possible to try and schedule meetings with people in advance because they are attending the conference to see companies. It is possible to contact the conference organizers and ask who has registered,” says Latzer. Barak-Landes adds that, at conferences, it is possible to seek the help of people who you already know and ask them for introductions. In this case, one meeting can lead to another.
At a meeting, says Latzer, “The objective is to be interesting enough for another meeting to be arranged. Do not try to teach the person everything about the company, but pique his interest.”
“The business card still exists,” says Oron, “but they are not the purpose of the meeting, because if you left no impression, they won’t use it. Wait until the end of the meeting before asking for the other person’s card.”
Barda says, “When you receive a business card, it’s very important to send an e-mail after the meeting. The e-mail should be sent as soon as possible after the meeting to remind the other person who you are and what was said at the meeting.”
“Even if you feel that the meeting has not led to anything, continue to send updates on the venture’s major progress,” says Oron, unexpectedly adding that there is no point is spending too much time at conferences before building a product that proves itself (in the Internet field), because investors are only focused on the most impressive opportunities. “Adapt the networking to the stage of activity. In the beginning, it is actually more important to win as many small customers and users as possible and to take care of them. When you see customers adding value, you will have something to present to the key people who will be happy to listen to you.”
Accelerators and competitions
“There are ventures that already have networks ready, and the entrepreneur only has to leverage them,” says Barda. “8200 EISP is a good example, as are angles clubs and entrepreneurs organizations such as TechAviv.” Accelerators can also be networks, and Barak-Landes recommends setting up base in them even if you don’t need one.
Various countries operation business collaboration offices with Israel, which are headed by highly networked people. The Israeli Consulate in New York and the Israel Export and International Cooperation Institute can be addresses.
Another built-in lever is competitions, such as Smartup. “The prize is not the objective of the competitions, but to be heard,” says Barda.
Barak-Landes mentions the IVC site as a source of names, positions, and contact details of people. She adds that the Israel Advanced Technology Industries (IATI) is another source.
Hermoni takes the involvement of networking associations to another level. He is currently a member of the organization’s only India-Israel Ventures Association and the only man in the Club Silicon Valley - an incubator of women leaders. “I told myself, ‘What is the group with the greatest power in Silicon Valley?’ The Indians have a lot of power, and I approached them with a suggestion of how to help them. They were enthusiastic and the connection was created. I advise everyone to expand their networks beyond the obvious.
Online social networks
Interestingly, the interviewees do not mention social networks as an important networking tool, but only as an additional means of communications that classic networking rides. Barda says, “This is not a replacement for face-to-face meetings. Social networks might make it possible to know who you can reach via whom, but it is not a replacement for the need to build trust with the first circle.”
LinkedIn Corporation (NYSE: LNKD), a byword for networking, is the first name mentioned by all the interviewees, along with scheduling site MeetUp. Barak-Landes recommends MeetUp and participating in its forums. “The more intimate the forums you reach are, your ability to meet people is better,” she says.
“LinkedIn allows networking by anyone with skills in the field, except for small talk,” says Hermoni. He also mentions Silo founded by Israeli entrepreneur Moshik Raccah. On the site, you state very accurately what you need and the system connects with the relevant people.
The interviewees see no point in building a massive presence on Facebook or Twitter, as the investment will not pay off, unless it comes to you naturally.
The networking personality
“Really successful networking is something that is innate in people,” says Hermoni. “If you’re instrumental at every meeting point, you’ll feel it.”
Oron agrees, but with a caveat, saying, “Networking is part of your ongoing experience as an entrepreneur. It isn’t a one-time act. However, time is the most precious resource, and, as in every field, you must ensure that your investment maximizes the advantage at minimum cost.”
Barda says, “Someone who calls to say good luck at everyone’s birthday, smiles at everyone, and shakes everyone’s hands does not create a personal connection. It is better to make a call in the middle of the year and suggest meeting for coffee because you thought of them. If you picked someone up at the airport or hosted them at home, that is stronger than a business meeting.”
Barak-Landes says, “My guideline is always to learn something from every meeting I organize. When I sit at meetings, I listen to the subtext. I leave the meeting with a lot of impressions about the things mentioned that have nothing to do with the purpose of the original meeting, and which an ordinary person does not think to write down on a notepad."
Published by Globes [online], Israel business news - www.globes-online.com - on August 17, 2014
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