The value of social capital and relationship management
May. 27th, 2021
American sociologists James S. Coleman and Mark S. Granovetter justified the relevance of social capital in the context of human capital development. It is at least as important as monetary capital.
Social capital includes all the people you have interacted with in the past. Friends, colleagues, employees, investors, business partners, and people you know in general. If you manage your social capital efficiently, you can use it optimally for your business. Whether your contacts refer you to investors for your startup or you hire your acquaintance as CFO in your company because they have successfully managed companies before.
Let us consider the following case study: You are currently founding a startup that offers software for the financial management of companies. You need funding of 500.000 euros for the implementation and completion of the software. You have already contacted countless venture capitalists, but it is very difficult to attract their attention. Luckily, you have an acquaintance who works in venture capital. You contact him and tell him privately about your idea. This acquaintance thinks your idea is innovative and makes sense. He convinces the other venture capital members to take the time to listen to your pitch. If that one contact had been lost among many others, you might have spent a lot more time pitching your startup.
Another possibility would be: You are the CEO of a startup and meet a venture capital chairman. You pitch your software company, but he is not familiar with the business and declines. However, this chairman recommends you to his colleagues and you quickly pitch your company again and are funded. That way you can increase your capital even if you couldn’t convince individuals. To be successful, in any field, you depend on using contacts. Your connections also have contacts based on which you can get access to a whole new network.
In summary: business development, growth of your customer base, your company’s reputation, and many more business aspects are directly related to contacts and connections. Contacts can refer you, share you, and spread word of mouth.
Structured relationship management is needed to ensure this. nevaal Maps support this with numerous functions. One example is the filter function. With this function, you can filter your networks on different characteristics like the field of business or the amount of relevant work experience.
The event function offers you the possibility to analyze the guest list already before events. This way you will never miss a good connection.
In general, nevaal MapsTM can visualize your network and connections so that you have organized and structured access. The digital solution to make contacts and connections is of utmost importance especially in the current pandemic situation and will remain indispensable in the future.
For venture capital funds the analytics function is especially useful because it can judge the founders based on experience. The probability of success can be estimated from many points. However, if a founder were over 30 years old and had already founded 3 successful startups, then he might be favored over inexperienced founders.
In conclusion, social capital and the management of relationships and contacts are very important. There are many advantages to having your connections structured and organized.
You can not only start your career with the help of connections but also expand it. You can prepare for events in the best possible way and expand your connections after each event. nevaal Maps offers numerous features that help you manage your network efficiently and in the best possible way.
Additional reading:
James S. Coleman - Social Capital in the Creation of Human Capital
Tags:
Ecosystem Management
nevaal Maps
Startup
Venture Capital
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