In any business endeavour, networking is important. But, in the world of high-tech startups, it is vital.
Technology is constantly changing and in order to be effective in this continually developing sector, making connections and learning from the more experienced is critical.
While conducting a research task focused on determining how companies in the tech sector have achieved success, Endeavor Insight, the research arm of Endeavor, a not-for-profit organization that supports high impact entrepreneurs across the world, found networking and connecting with mentors to be key.
“While raising funds from venture capital investors is clearly important, analysis of new data on startups suggests that founders should also dedicate significant time to something that many people overlook: recruiting great mentors,” said Rhett Morris, director of Endeavour Insight. “This simple strategy can increase a company’s odds of success more than almost anything else.”
Endeavor Insight’s report entitled, “The Power of Entrepreneur Networks”, pinpointed companies in New York City’s tech sector, the fastest-growing tech sector from 2003 to 2013 and now the second largest tech hub in the world.
More than 700 industry trailblazers were interviewed and data was compiled from over 2,500 companies.
“Our analysis revealed several interesting patterns. We found that many of the entrepreneurs leading these startups had strong personal connections to the founders of other successful companies,” continued Morris.
Cameron Chell, co-founder of Business Instincts Group, a venture creation firm that focuses on building high-tech startups, agrees about the power of networking and says networking, in one way or another, will play a role in the growth of a start-up.
“As a startup, the one major lesson that I have had is that you are going to have to ask for help,” explains Cameron Chell. “Startups are not about the idea, they are about the people and, in order to have a sustainable startup you really need to focus on creation rather than competition.”
In a highly competitive industry, focusing on creation, as opposed to competition, may be easier said than done.
“You need to be open to any new connections that might come your way. If you are out there burning bridges or hoarding information and being manipulative and controlling, it comes back to you extremely quickly. It is important not to build barriers that may reduce your chances of developing beneficial relationships,” continued Chell.
Chell adds that networking is a golden opportunity for creation that will only strengthen business efforts.
For those unsure where to start when approaching a networking opportunity, experts suggest the best networking comes from genuine relationships, not a business card exchange. So, no matter whom you’re approaching, treating the person as a friend, as opposed to a business contact, will allow you to foster a better connection.
Outcomes from Endeavor Insight’s report confirm that staying focused on building quality relationships is a worthwhile pursuit.
“Relationships like these are quite powerful. Thirty-three per cent of founders who are mentored by successful entrepreneurs went on to become top performers. This is over three times better than the performance of other New York-based tech companies,” added Morris.