This week I had the chance to re-connect with a “super connector” – my friend Judy Robinett, who I interviewed late last year. Since then, Judy’s book How To Be A Power Connector has emerged from McGraw-Hill this month and is racing it’s way to the top of the Amazon charts.
There is no doubt that connections matter in business, and according to Judy, they perhaps matter most of all in finding funding for business. To that point, she notes that small business founders who are better connected on LinkedIn are more successful, not only in finding funding but in finding management team members, advisory board members, and figuring out how to surpass challenges in customer acquisition, and yes, how and when to find additional funding.
(Here’s one of my own favorite LinkedIn Posts, by Guy Kawasaki, which talks about the Top 10 Lies Entrepreneurs and Investors tell each other. It’s an excellent read, and you can find that article here).
Book launch discussions in New York City with fellow authors Karla Nelson and Arianna Huffington (image courtesy of Judy Robinett)
Connections are so important than Robinett recalls one investor actually saying to an entrepreneur, “If you can’t figure out how to get to me, you can’t figure out how to get to a customer. I won’t fund you.”
But hope looms. In her book and presentations Robinett has developed a system for how to find the right connections and how to leverage them well when you do. How to begin? Robinett acknowledges that networking is vital, but that most people are “in the wrong room.” In the case of entrepreneurs, the mistake she sees most frequently is that people approach Venture Capital firms (VCs) at a stage when they should be speaking to angel investors instead. “A full 90% of early stage funding for high growth start-ups occurs through angel investors, not through VCs,” Judy says, and notes that friends and family are the largest provider of funding for start-ups overall.
“I see people frequently who are frantically ‘looking for love’ in all the wrong places,” she says. “Whether it’s money, power or influence, great ideas or the best people—it’s vital that you start by getting into the ‘right room’.”
Judy cites American business magnate Charlie Munger (Warren Buffet’s partner and vice chairman of Berkshire Hathaway) who says that if you go to a conference of 100 people, 5 will be people you can’t live without, 15 will be of no interest and 80 percent he categorizes as “wait and see.”
Judy cautions against spending much of your time in groups of people who are similar to you. Furthermore, “if you’re the smartest person in the room, you’re in the wrong place,” she says.
For example, a friend of Judy’s, Annette, had invented a spectacular new medical device, but was speaking to the wrong people about funding and had failed to go to the right contacts and had failed to realize that the majority of new funding comes from San Francisco, or from the East Coast. Robinett helped her friend with a few key introductions. Within 8 months she’d secured $500,000 in funding and in less than 2 years the company sold.
“Yes, the ecosystems of various industries are intricate—publishing, the device world, service providers, accountants and media—there are many, many entry points,” she observes. “But as Phil Graham, of Y Combinator, has noted, there are primarily only two reasons for an early stage business to fail—lack of a customer and lack of funding. Your ability to form the right connections is the answer to both.”
“There are more than 1,000 incubators and 300 angel groups. Almost all have websites and an application process. And of course crowdfunding is a change that influences them all.”
Her advice to budding entrepreneurs is this:
“Take the time to understand who the players are. Figure out who you need to meet and create a plan to meet them. Don’t wait until a moment of crisis to build a network.”
“Fear is the enemy. Everyone faces fear. Learn to be resourceful and scrappy.”
You should also remember that in “power connecting” there has to be a value proposition for both parties, always, in the process of finding a match, Judy says. “For a billionaire, their problem is that they don’t want their money parked in the bank or in stock,” say Judy. “Their problem is to find good deals. A founder needs to find a good angel investor. There is always, ultimately, a match—your problem is somebody else’s solution.”
As a first step, Judy notes that people are social and that we tend to flock by our interests into the ecosystems that most represent our personal and business needs. Getting into these groups (on sites like LinkedIn and in live networking groups) is a positive first step. And in addition to using the strategies Judy presents in her book, she recommends entrepreneurs study the teachings of other successful power connection experts as well:
Adam Grant, who at age 32 is Wharton’s youngest full business professor, is the other of Give and Take: A Revolutionary Approach to Success. Grant (a friend of Judy’s) strongly espouses the philosophy that people by their nature tend to be takers, matchers and givers (givers being the rare breed of people who give freely without the expectation of anything coming back in return).
Judy also advocates the philosophy of friend Bob Burg, the well-known author of The Go-Giver, often recognized by his famous statement, “All things being equal, people will do business with, and give referrals to, those people they know, like and trust.”
Among strategies Judy advocates that upon meeting any new contact be able to express your story quickly, and then ask the two Golden Questions: 1) “What other ideas do you have for me?”, and 2) “Who else should I talk to?” It is the most efficient way to curate contacts and resources and to cultivate leads. And like Arianna Huffington – a fairly new friend and connection in Judy’s circle, she espouses the philosophy of giving first and receiving second (and in every case, character rules). Fittingly, Judy shared her favorite quote from Arianna’s book Thrive: “Make small gestures of kindness and giving a habit and pay attention to how this affects your mind, your emotions, and your body. During your day make a personal connection with people you might normally tend to pass by and take for granted.”
For more information about Judy Robinett, readers can contact Judy directly at www.judyrobinett.com.
Quiz: Call, E-mail, Text, or Tweet?
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