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For countless entrepreneurs, a proven way to find funders and staff their startups is by leveraging connections across class lines, but with the right focus on continually expanding your network. Too few entrepreneurs do.
There are many other important steps on a startup's path to success, including increasing revenue, hiring the right people, and knowing the market. The list goes on. But there is one metric in the process that deserves considerable attention. It's about expanding the range of answers to the old adage. who You know. “
”who It often includes a pre-built support system for those in wealthier economic classes. These successful entrepreneurs have navigators, such as successful relatives who can make introductions, or former professors or classmates who can review business proposals. Entrepreneurs who don't have a strong social network usually lack one.
It's probably true that entrepreneurs like Jeff Bezos and Elon Musk are so unique that they would have been successful no matter how they started. But entrepreneurs who don't come from a privileged background can't go back and get into a top school or get an entry-level position at a promising company. They can't turn back time and make sure their social circle includes the successful people they want to be one day. All they can do is focus on what's in front of them. Most importantly, they can intentionally build social capital.
Related: When “who you know” can actually hurt your entrepreneurial success. Here's why:
Thankfully, while it is recognized that many founders do not have access to adequate forms of social capital, many of those who do have it are finding ways to share and provide it. I've seen it happen. An example of this is one of his projects in my company, Vimenti's Project Makers, which aims to develop the entrepreneurial skills of young workers.
The benefits of programs like this and many others go far beyond honing a potential business idea. These speak to the core of social capital. It's the development of trusting relationships between under-opportunized and talented entrepreneurs and the established funders, mentors and allies who can help them get where they want to go.
That trust is essential for entrepreneurs at all stages, but especially in the early stages. As most of them know well, they are looking for direction, not just money. Advice on business formation can only come from people who have experience in running their own businesses, and are therefore in a social stratum that they would otherwise not want to engage with. .
Think about your community and the people you only know around you. If you can't cultivate the trust part, how to build trust and how to create an environment that can foster trust, you get to the part where that valuable asset becomes part of your social capital. Never.
Many government programs have attempted to bridge the gap in cross-class connections. But as I see it, these efforts only emphasize the need for entrepreneurs themselves to take greater responsibility for their networking solutions.
Related: How nurturing relationships can help you (and your company) thrive
For example, consider the federal government's recompetition pilot program. The program will provide up to $200 million to areas where prime-age employment inequality is much lower than the national average. This is a valuable program that my organization would like to leverage, but it cannot unilaterally correct long-standing disparities in inequality. Injecting financial capital is important, but it alone does little to solve the problems of those who truly need social capital.
Academic research on class connections suggests that for every dollar of real capital brought to struggling communities, an equal amount needs to be invested in the form of social capital. This is not a theoretical thing. For example, Jobs for the Future is a nonprofit organization working to transform America's education and workforce systems and promote equitable economic development. But this is essentially a type of social capital that gives job seekers from low-income backgrounds access to better schooling, coaching, mentorship, and most importantly, exposure to the work of people who have already achieved it. This is a program to increase connections across class lines. Hunters may have never experienced this before.
There is no easy solution to this problem. Class divides are significant in most countries, not just the most entrepreneurial ones like the United States. Addressing this issue can be a low-cost way to address startups' ongoing hiring needs and increase economic opportunity and mobility. This is important on a broad scale because entrepreneurship is typically the way to create economic mobility.
This is a statement I can say with confidence. It's also because, as leaders of organizations that support Puerto Rico's job accelerators, vocational training centers, school programs, and clinics, we are engaged in similar efforts to increase social capital. Too.
In my work, the gap between what people in affluent communities take for granted and what people in low-income communities lack becomes more apparent. I constantly face the trauma, guilt, and shame that comes with poverty. The barriers to mobility are as much psychological as they are physical, and the traps that keep the poor poor can only be overcome by contact and connection with people who have never known their limitations. I know I can overcome it.
Particularly for small businesses that don't have a lot of resources, being able to join a group that intentionally connects with entrepreneurial mentorship can be very difficult. It's not just about instant feedback on marketing, sales, and production. The expected outcome is an entrepreneur who has expanded the capabilities of his business because his network is growing and hopefully continues to grow.
It is this last mile of economic mobility for entrepreneurs that is the most important to achieve and the most difficult to achieve. That's what I know – and it's also based on people I know.
