A successful start-up depends on much more than just a good idea (intellectual capital) and funding (financial capital). Crafting a relevant network of contacts that can help you succeed is vital: investors, advisors, potential hires, early customers, etc -- so building "relationship capital" is vital if you want your start-up to succeed. Attached are materials from a recent workshop I ran at Dartmouth for engineering students (Thayer School) and business school students (Tuck).
What is Relationship Capital and how do you go about building it so your start-up can succeed?
1. Professional Relationship Management
Entrepreneurs
Workshop
Intellectual
Capital
+
Financial
Capital
+
Rela6onship
Capital
=
Entrepreneurial
Success!
What
is
Rela+onship
Capital
and
how
do
you
go
about
building
it
so
your
new
venture
can
succeed?
Andy
Wilson
Rexter/Innovate
Pasadena
Rela%onship
Capital
Technologies
Inc:
Proprietray
2. Professional Relationship Management
Agenda
Rela%onship
Capital
Technologies:
Confiden%al
• About
me
• Se+ng
the
stage
• Success
formula
• Rela6onship
capital
(RC)
• Rexter
• Innovate
Pasadena
• Ge+ng
Started
• Q&A
3. Professional Relationship Management
Me:
Corporate
Weenie
è
Compulsive
Builder
• Engineering
@Dartmouth
• Strategy
consul6ng
@LEK
(big
picture)
• MBA
Harvard:
Technology
&
Ops
• Led
prin6ng
co
into
digital
age
• Founded
corporate
spin
out
to
IPO
• CIO/SVP
Ops
@Bowne
&
Co:
Growth
• Prez/COO
of
RiverOne
($50m
of
VC)
• SVP
Product
@Overture
($1.7B
to
Y!)
• Seed
fund/accelerator
(12
SoCal
Co’s)
• Rexter
“my
calling”:
Thesis-‐driven
• Innovate
Pasadena:
Build
ecosystem
4. Professional Relationship Management
Why
Does
this
Guy
have
a
$1B
Smile?
“Success is as much about who you know as what you know . . . ."
- Kevin Systrom, CEO Instagram
New York Times "Behind the Instagram Feat, Networking the Old Way" 4/14/12
7. Professional Relationship Management
Intellectual
Capital:
the
Idea
The
way
to
get
startup
ideas
is
not
to
try
to
think
of
startup
ideas.
It's
to
look
for
problems,
preferably
problems
you
have
yourself.
The
very
best
startup
ideas
tend
to
have
three
things
in
common:
• they're
something
the
founders
themselves
want,
• that
they
themselves
can
build,
• and
that
few
others
realize
are
worth
doing.
MicrosoE,
Apple,
Yahoo,
Google,
and
Facebook
all
began
this
way.
Paul
Graham:
Co-‐founder
Y-‐Combinator
10. Professional Relationship Management
Relationship Capital (RC) 101
• Key driver of success : who you know & how well
• Can be measured – not mysterious & intangible
• If can be measured then it can be managed
• Grows based-on quality & frequency of interactions
• Greater the RC the more valuable the relationship
• Effective RC management: building relationships &
engaging them to get things done
11. Professional Relationship Management
Types of Relationships
Theoretical Limits for Each Type
Max ~ 150
Core Relationships:
Friends, Family, etc
~ 1,000 or more
Purpose Specific
Occasional Relationships:
Extended Network
Source:
Hutch
Carpenter
bhc3.com
12. Rela6onship
Management
Process
Financial
Management
1. Define
your
long
term
objec6ves
2. Iden6fy
relevant
groups
3. Out
reach
to
grow
contact
base
4. Cul6vate
contacts
into
rela6onships
5. Engage
“ripe”
contact
for
outcomes
Rela6onship
Capital
Management
Professional Relationship Management
Professional Relationship Management
13. Expanding
your
Network
Classic
Networking
Engagement
Seed
Financing
Hire
CMO
Q2
Deals
Search
&
Selec6on
Mobilize
for
Outcomes
RC
Management:
A
Process
View
Groups
&
Priori6ze
Angels
Talent
BD
VC’s
Suspects
Organize
&
Develop
Ini6al
Screen
Work
Backwards:
Who
should
you
know
&
why?
14. Professional Relationship Management
Recap & Tips
• In the “Connected Age” who you know as valuable as what you
know
• Networking is no longer the exclusive domain of BD & sales: all
professionals
• Effective networking is systematic, focused and strategic . . . it
is not “magic” but a discipline that almost anyone can master
• Critical to network with intent: to what end? (work backward)
• This value driven view becomes your filter: who to target, who
to develop, who to prioritize (don’t confuse quantity with value)
• Relationships drive success so it is critical to have a strategy
and a system
15. The smartest list in the world.
Give your brain a break. Let Rexter do the thinking for you.
Professional Relationship Management
16. Rexter
Secret
Sauce
Quan6fied
Self
Your
Digital
Exhaust
Big
Data
&
Analy6cs
Real-‐6me
Guidance
Dynamic
Call
Sheet
Core
Concept
Rexter
Flavor
Rela6onship
Scoring
Who
you
know
&
how
well
17. Impact
of
the
Connected
Web
Accessing
Info
Networking
Exclusive
Domain
of
Sales/BD
Arduous
&
Labor
Intensive
Then
Now
Instant
&
Comprehensive
Open
&
Universal
18. Professional Relationship Management
Getting Started
• Step 1: Define success:
o What are your key long term goals?
o Where are your headed?
• Step 2: Think about what types of people can help you (define
your relationship groups)
• Step 3: Do an inventory of who you already know in each group
and build relationships of quality
• Step 3: Develop a reciprocal value proposition (what can you
offer them)
• Step 4: For groups that are thin, develop a strategy to grow your
contact base
• Step 5: “Cherry pick ripe relationships” to achieve results