Imagine a young entrepreneur in Nairobi, a brilliant mind with a game-changing idea. She has the passion, the drive, and the solution to a critical problem. Her name is Akinyi.
With no real experience in business, Akinyi sensibly decides to invest some time immersing herself in the top management books.
She devours The 7 Habits of Highly Effective People and becomes super proactive.
She studies Good to Great and meticulously crafts her niche offering using the hedgehog model.
She reads Start with Why and contemplates the deeper purpose of her product.
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And she diligently applies the lessons from How to Win Friends and Influence People in all her day-to-day interactions.
Yet, despite this, Akinyi, like hundreds of thousands of other entrepreneurs before her, ultimately fails in her quest. Why?
Because all these great business books failed to adequately express the importance of networks.
And without networks, even the most talented people can never succeed.
So, what exactly is a network and why are they critical links in your chain of future success?
Most dictionaries define a network as an action or process of interacting with others to exchange information and develop professional or social contacts. This, in my eyes, is incomplete. It fails to capture the essence of what networking is really all about. It doesn’t answer the ‘why’ of networking.
Because, to me, networking is actually the process of getting others to willingly offer you their resources to support your goals. These resources could be capital. They could be introductions. It could be knowledge. It could be many things, but ultimately the power of the network is how it helps you to do things you couldn’t possibly achieve alone.
And to get that type of support, you have to be skilled in getting others to not only trust you, you have to get them to believe that by helping you, they too will benefit at some time in the future.
If that sounds difficult to pull off, it is. It takes planning. And to do it well you need to allocate a lot of time.
If you are wondering how much time you should allocate to networking compared to your other business demands, consider how important networks really are.
It’s widely acknowledged, for example, that a significant portion of jobs are never publicly advertised. These “hidden” opportunities are often filled through personal connections and referrals, highlighting the power of networks in accessing the unadvertised job market. This makes intuitive sense; employers often prefer to hire someone they know or trust, or someone recommended by a trusted source.
An even more compelling illustration of the power of networks can be seen in the success of startup incubators like Y Combinator (YC), Techstars, and 500 Global. While these programs offer valuable resources like seed funding and mentorship, their greatest asset is arguably their extensive network of successful entrepreneurs and investors. This network provides startups with crucial connections, advice, and potential partnerships that can significantly increase their chances of success.
The facts are pretty simple. Startups that use incubators are twice as likely to still be in existence after five years. And looking at some of the famous brands that have benefited from these incubators, such as Airbnb, Stripe, Dropbox, Canva, Uber, Coinbase, DoorDash, and more recently, OpenAI, there is compelling evidence that you are far more likely to reach billion-dollar valuations by being part of their network than trying to go it alone.
OpenAI, in particular, showcases the power of networks. Its founder, Sam Altman, a former Y Combinator president, leveraged his connections to secure funding from influential figures like Elon Musk, Reid Hoffman, and Peter Thiel. Interestingly, these individuals were already connected through their shared experience founding PayPal, further highlighting the compounding effect of networks.
And it is these networks that have fueled the growth of some of the world’s biggest companies. For 50- plus years, the United States has been mastering the art of creating virtuous ecosystems that bring together politicians, business leaders, universities, business schools, funders and incubators, creating more unicorns than any other country in the world.
The top 10 companies in Silicon Valley alone generate around $2 trillion of revenue every year. That’s approximately the same as the GDP of whole countries like Canada or Italy!
So, what is my advice for Akinyi and anyone else that wants to be successful in life?
Stop reading business books. Get out into the world. Build relationships with successful business people. Get them to share their stories. Join incubators. Get funding, even if you don’t need it. Do whatever you can to build your network.
You’ll learn more. You’ll hone your business skills faster. You’ll have more fun. And you never know. Maybe it will be the catalyst that propels you to build Africa’s next unicorn!
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