People who are on the fringes of your network can actually be more valuable to you than those closer to you. Those on the fringes - referred to by academics as as ‘loose networks’ - can bring fresh ideas and plug you into more marketplaces.
‘Loose network’ builders push boundaries in their networking just as they do in their business. Its real power comes from meeting people outside your sector, outside your geography, outside your seniority, and outside your income bracket. That way, when an opportunity arises – no matter how left-field – you’ll be equipped to tap into your network.
Because they are rarely tied to a particular sector, venture capitalists tend to be natural ‘loose network’ builders. In fact, VCs have been referred to by some management researchers as the ‘information brokers’ of society because of the way they sit between disciplines and sectors, and link entrepreneurs and senior managers to trustworthy and often transformational ties.
Take Silicon Valley. This is an active area for VCs and one of the most productive places in the world for startups. A lot of this success has been down to venture capitalist ‘information brokers’, without whom many of those great ideas would not have reached the scale that they did. When the Google founders developed their search engine within Stanford University, it was a venture capitalist who took the prototype out of the university and into the hands of the right people. Without the perfect link made across an inter-sector network, Google might have remained in a university laboratory forever.
When I was at Oxford University we used to have informal awards called the Sylvester’s. They were a bit of fun; categories included ‘most likely to show up in a helicopter at the 10-year reunion’. I won the award for ‘serial networker’ or something along those lines: I wasn’t sure whether to take offense or be proud of it. Oxford in 2008 was a fascinating time to be at an academic institution but there was a sense of unease and angst in the air. In the aftermath of Lehman, we were all worried about what would happen when we graduated. Because of my ‘serial’ networking skills, I managed to secure opportunities with James Caan, who was looking for new people. I found myself creating jobs for people in my close network at university through a celebrity entrepreneur who at that time was part of my ‘loose network’.
Recently, a lady I did business with when I was running my technology business in the early noughties – got back in touch from Salt Lake City, Utah. It had been so long since we spoke that she had become a part of my loose, distant network. I wasn’t sure if our paths would ever cross again. Three months ago, she introduced me to her husband, an entrepreneur and investor who happened to be passing through London. We met at a bar, and I decided that evening that I wanted to do business with him.
He happened to be exactly what I was looking for to join me in my latest property tech business. He has since invested alongside myself and James Caan – proof of how important your ‘loose networks’ can be.
There is a lot of latent value in networks but learning how to exploit it is the key, something that doesn’t come naturally to most people. For me, it’s about being able to mentally trawl through my virtual black book – and knowing exactly which person is going to be useful to the project I’m working on.
This is the type of thing VCs have learnt to do well in Silicon Valley and something I’m trying to do here in London. Even though I have an expansive network already, I proactively try to grow it by five contacts a day, seeking out specific individuals who I should be meeting that relate to businesses I’m involved in. And despite the fact I’m a well-known venture capitalist, I behave like I’m just starting out. I still make cold approaches to people I would like to meet. A lot of senior figures think they’re beyond doing things like that but I totally disagree. As long as I do it strategically, I absolutely should be doing it.
When I’m trying to build my loose network, I’ll define the criteria very specifically: ‘I’m looking to meet a digital marketer who understands consumers really well, is at one of the top ten online consumer brands, and may be interested in equity ownership. He should be young and hungry, perhaps in his late twenties so I know he’ll be interested in a challenge.’ I’ll pass that brief onto my team of researchers to produce the candidates for me, and then I’ll personally approach them. A lot of traditional managers think they have to do everything themselves – and they feel like they haven’t got time to improve their network. The way I see it, when you have a vast network, you have more people to tap into to support you with strategic growth initiatives. Just as they do in Silicon Valley, use the ‘information brokers’ to help you to create value for your business.
Throughout my life I’ve always put myself in a position to grow the depth and breadth of my network. That’s why I chose to go to California to do my undergrad and the UK to do my masters. I wanted to build my transatlantic network, one that’s already beginning to bear fruit as I reconnect with my contacts from Salt Lake City for a London-based venture. And my international schooling has put me in the fortunate position of having an old school friend in every major capital around the world – from Seoul to Kuwait City to Lagos. My advice as an (unofficial) award winning ‘serial networker’ is to put yourself out there.
One of my most successful businesses came about when I decided, on heading toward the exit door of a networking event, that I should speak to one more person before I leave. I put my hand out to see who would shake it. By serendipity, it happened to be the founder of the next business I backed. It sounds like I’m a little ‘loose’ when it comes to business networking, but that’s only because I realise the power of ‘loose networks’.
- Faisal Butt is the co-founder and managing director of Hamilton Bradshaw Real Estate, a venture capital firm he founded with James Caan. Follow him on Twitter @FaisalButt_ or find out more about him.