How to successfully build connections in the startup world

build connections

I remember years back, when a good friend from university was desperately looking for a high level finance job. She asked me to introduce her to my contact, Uncle E, who was a high-level senior in a local bank. He was an old family friend and I willingly did the introduction, since I knew that my friend was qualified. But I failed to ask whether she sincerely wanted the job.

Due to our long-time friendship, Uncle E took the time to personally interview her and gave her a job with great career prospects. To my horror, she quit two days later. Apparently, she had simply been waiting for another job offer, and dropped this job without caring about the impact it had on me.

It was with great embarrassment that I sincerely apologised to Uncle E for wasting his time and for not realizing that my friend could take my introduction so lightly. Uncle E accepted the apology and explained the power of reputation capital.

“Relationships and connections are the blood of business in Asia. Use them wisely,” was the gist of his explanation. A lesson learnt. Till today, I have not asked Uncle E for any more business introductions, being too embarrassed of other potential introductions that might turn sour.

Asia – the power of reputation and connections

The topic of guan xi (i.e. “relationship” in Mandarin) has been well-documented over the years. Here in Asia, it is even more pronounced.

When you ask someone for a business favor to help you, especially a big favor on which he has to stake his own reputation and career, the person will assess the risk of doing that favour, how deep your relationship is with him, and an optional consideration of whether he will benefit from it.

Here is an example: I had a startup who wanted to start banking facilities, but it was rejected after being assessed by the bank. The founder scolded the bank officer, showing proof of banking facilities of other startups which were in the same risk category and vertical as his startup was.

“Must I be your high school chum in order to get the same privileges?” The answer is yes, to a certain extent. I knew the CEO of the bank, and asked him about the difference in treatment.

He told me that “the risk to grant this startup banking facilities is just too high and we don’t know him. But if you are willing to put your name on it, I will grant him the facilities, but it is your reputation on hand.”

While he did not say it, I knew that if I signed the recommendation, that will become part of the bank’s future assessment of me should I want to take on banking facilities for myself. Suffice to say, I did not recommend the startup for fear of my own reputation being affected if the startup screws up.

Building connections

As an entrepreneur, you will always need to build connections and work with different people all along the value chain. It can be connecting to an associate or to the top boss of a large MNC (multinational corporation), all of which can give you access to a strategic asset.

You could be working with fellow entrepreneurs across borders, or verticals to provide a stronger solution to a large client. The bottom line is: you need useful trusted connections that can help you grow your business. But how do you grow them, especially if you are young and lacking in such connections?

Cold calling or LinkedIn are possible ways, but chances of people responding is likely a hit-and-miss. So a good way would be to rely on friends, close associates or mentors to be warm connectors to the person you are trying to be introduced to.

A cost to reputation capital

But first, before you happily ask people to introduce you, do remember that it will cost the introducer reputation capital. Here is a case in point: when I do an introduction of a startup founder to my associates via email, especially to senior ranking people, I am putting my reputation at stake.

The associate will respond based on their familiarity with me and the trust that I have done the necessary due diligence of doing such an introduction. At the same time, it is considered a favor which I am expected to return should they come knocking.

This is why I am sometimes upfront when someone asks me to do an introduction. I would not do so unless I trust the person, and am willing to owe a favour to my associate.

Respecting the introduction

I have made many introductions for startup founders to my network of contacts, and have faced both positive and negative experiences from introducing. Here are the same things you need to take note of when asking for and receiving an introduction.

Do:

  1. Respond very quickly within 24 hours of the introduction. It shows that you are very appreciative and eager to engage the contact. Any later shows that you are not concerned or appreciative of this opportunity. Be specific and clear on what objectives you hope to achieve, rather than a very open-ended meeting.
  2. Be early when meeting the contact, should you be meeting up. There is no excuse for lateness as you are the person who needs the help.
  3. Explain the relationship with your introducer to the contact. For example, he is my mentor, or he previously worked with me on X project.
  4. Always be respectful of the introduction and remember that your first meeting carries the reputation of your introducer. If you are doing a sales negotiation with a contact, offer a small benefit or sweetener. For example, “I recognise that you are a close friend of my introducer, so allow me to offer you a friendship discount or extra services on top of your proposed contract.” This puts the introducer in a good light that you recognize the relationship between the introducer and the contact.

Gratitude

One thing that really disappoints me is that after making the introductions, I do not hear from some of the founders again. Even if they do come back, all I get are emails asking for more introductions, without any sincerity. All they see me as is a resource and not a person to cultivate a relationship with. It sucks to be made used of.

Mentors, like me, do introductions to help others in a pay-it-forward fashion. And introductions are done trusting that the founders will know how to respect the introduction as well as being grateful for it.

Having said that, there have been founders who show gratitude in their own ways. Some replied, updating me on the progress of the introduction and also to thank me once again. They offered their assistance in return to help those whom I had introduced to them.

Some others will also come by personally and sincerely thank me with small thoughtful gestures of thank you notes or coffee. They have become friends and are now part of a network of trusted contacts.

In Asia, working with someone is about trust and credibility. So in business, as you grow as a founder, always treasure introductions and connections. How you handle it will reflect your own reputation capital, which can be a make-or-break aspect to a successful deal.

 

This article was first published on Tech in Asia.

 

 

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