How to Build Your StartUp Networks
“It takes a village” is a parable that applies not only to raise a child but also to running a business. No business in history has ever been able to create products, sell them, improve on them and manage interactions all on their own. Networking is essential in order to grow your business. Now we will discuss two very important networks, the informal network and the formal networks. Informal networks are grown by having good customer relations, this network is created through word of mouth from the consumer. Formal Networks are networks that are built through the effort to engage with other business leaders and this is critical for any startup, as working with other entrepreneurs significantly increases the rates of success.
Finding and Networking with Customers
Customers are the lifeblood of any business, nothing can survive without them. However, startups are always struggling with how to find them, especially the first few customers are some of the most difficult to find. In order to find those first customers, most founders opt to work their personal networks, however, at the same time you need to work on building up an online presence. Today everyone has some form of social media and being where they are is vital to get those clicks and traffic for your business. Once you have your first few customers you can begin to expand by managing your informal network. This period can be seen as a maintenance and growth period for the company.
This failure is quickly causing many startups to shift their attention from solely focusing on their product to better serving their customers. Serving the customers to their expectations is critical as their feedback will be important for growing your informal network of customers. More than 65% of all customers believe that a business’s customer service needs to improve or dramatically become faster.
Some groups even speculate that in the next few years 90% of businesses could be competing based on their customer service alone. Finding loyal customers who can grow your informal network is critical for any business but finding new customers is not the only concern of building a business. Customer retention is the other side of the same coin and is one of the most critical metrics of success for any business. The informal customer networks are one of your most important networks as it pertains directly to the expansion of your customer base.
Improving the Experience
Improving the customer experience is going to be a constant balancing act of the budgets. When possible, however, improvements should always be sought in the speed and accuracy of support situations. More than 30% of satisfied customers and 36% of unsatisfied customers willing to post something on the internet telling about their experience meaning that how you handle your customers could have serious impacts on how you build your customer base going forward. Improving the customer experience will grow your customer network, and prevent it from shrinking enabling you to focus on expansion. Negative reviews are far more damaging than positive reviews are helpful, most people will look to the negative reviews to see if these are deal-breaking errors for them. Mitigating big errors is critical but when errors do occur it is equally as important to respond to them with speed and accuracy.
Tips and Tricks for How to Grow your Network
This all goes to show just how important it is to maintain those relationships and to grow the informal network. Customer referrals are very difficult to come by and something that you can not really control or increase. However, there are methods that you can use in order to try to grow this network.
- Referral bonuses [some companies institute a scheme to give perks to customers who refer friends.]
- Make your business model appealing to customers [make them feel like a priority.]
- Be memorable [if a customer remembers your name and business they may come to you if they have a need.]
- Build Trust [make them believe that you will always deliver.]
During trade shows sometimes companies take a more proactive approach to growing their informal networks. Aside from the obvious which is making sure you are situated in high traffic areas and making sure that you and your company reps are visible some entrepreneurs go one step further. For many, this is going to be the best opportunity to get face to face time with potential customers. While this is sure to be intimidating you can follow four easy steps and be well covered for your next trade show.
- Staff the booth with well informed and polite people.
- Make sure that you have enough people working the booth.
- Pick one impactful image to scale up, make sure the company name is easy to read.
- Find the right shows [make sure that your company is in the same industry as the others.]
Customers are demanding of the businesses that they do business with but they are also understanding. As long as service is as fast as possible with as much accuracy as possible customers are usually accepting of mistakes.
Networking with Other Entrepreneurs
Customers, however, are not the only network expanding resources which a startup must use to grow. Networking with other entrepreneurs can open new avenues of expansion and can significantly reduce the risk of failure for new startups. Let’s look at a company like Airbnb which is probably the most prolific example of leveraging other entrepreneurs. Airbnb has a very high turnover rate within its company, and this is by design they hire entrepreneurs. Airbnb attributes its rocket ships success to hiring people with an entrepreneurial mindset. One specific example which they like to highlight is just how quickly they were able to launch into Cuba in 2015. Previously Airbnb was unable to expand into Cuba as a result of American embargoes and then slowly easing of restrictions even after the embargo was lifted in 2011. It obvious for them that speed was key, for this reason, they made sure that the entire project from conception to launch took only 100 days, which they credit to the flexibility, adaptability, and creativity of the team which was working on the project. This is just one of the most famous example of Airbnb’s creativity and stands as a testament to how they run and how they do business, but it is not the only one. Airbnb maintains this culture by inviting anyone with an idea to present a one-page execution and explanation of their idea. The end result of this saga is that they were able to expand into a new marketplace that was previously restricted for American companies. The spirit of collaboration and flexibility has allowed Airbnb to capitalize on its entrepreneurial staff and put its best foot forward. This is all done to maintain the flow of creative ideas which enables the business to grow at unparalleled rates. But this is not the only story of success. In 2017 AirBnB partnered with WeWork to trial new business ready accommodations and expansion which was enabled by entrepreneurial collaboration. This is the sort of expansion and betterment opportunities that are presented when you network with other entrepreneurs.
Engaging with one or more other entrepreneurs can also triple your customer acquisition rate which is amazing on its own but consider that this will also save you massively on your budget as these customers will be coming to you at a reduced price. How to find these entrepreneurs is the topic of a never-ending conversation. One of the increasingly popular ways is through accelerators. Accelerators specialize in getting startups off the ground, and these services have been taken up by some of the largest names in recent startups such as Airbnb and DoorDash. One of the most famous accelerators in the world YCombinator provides funding for startups in the early stage. Accelerators serve a variety of function depending upon the needs. However, the number one advantage of their use is that they serve as an excellent place to meet other like-minded entrepreneurs, benefit from the experience of people who have worked in your industry, and get guidance going through the steps ahead.
How to Find Other Entrepreneurs
So how do you find these other entrepreneurs to work with? Increasingly so networking events are starting to move online. Facebook and LinkedIn are becoming the predominant source of networking between entrepreneurs and other businesses. VenturX works with startups to help them find funding, provide exposure, and expand their business. You can find more information on our LinkedIn and Facebook along with content aimed at improving your startup. Finding people to engage for business is the same as engaging with anyone else, you will need to engage with them where they are, social events or trade shows are still some of the most popular events where you can meet other entrepreneurs. Engaging with these other entrepreneurs while possibly awkward is critical to your business in the future. Networking with others opens up new opportunities through increased visibility and customer referrals. The benefits of this appear obvious increased visibility and referrals means more sales and a growing customer base.
The Dos and Don’ts of Networking
Networking is one of those things that everyone thinks they know how to do but in reality so many don’t. With this in mind, we thought a short Dos and Donts would be helpful for everyone one looking to get ahead of their competition. We should start with the positive, make sure that you:
- Do speak clearly, and have good posture.
- Don’t be afraid to relate to non-business topics.
- Do be sure of yourself and your topic.
- Don’t wait for people to come to you.
- Do connect with the right people in your industry
- Do go to events that match your goals [if you want to sell go to a trade show.]
Trade shows are probably one of the most daunting but important parts of growing your entrepreneurial network. Face to face connections are the driving force of business so when at trade shows there are several things to strive to make sure that you cover.
- Build a reputation as a leader in the field.
- Go through the promotional material from the event organizers and find people to network with before you get there!
- Network with suppliers.
With startups, they know the person going to these events are making a lot of the decisions so you need to sell yourself as much as anything else. If there are two things to take away from this it is this. Be confident, and Be knowledgeable about the industry of your startup.
The COVID-19 pandemic has changed many things about how we do business in this environment. With thousands of jobs being shifted from the office to work from home, businesses that were slow to adapt were punished by the consumer for not being able to still effectively meet their needs. The pandemic was a hectic time for everyone but it underlined that going forward customer service and networking will become increasingly vital to the survival of any business. It is very likely that an even larger investment will be made in the customer support sectors of many businesses and this trend is only likely to continue in the years to come.
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VenturX is a web platform that helps entrepreneurs through their journey from idea to launch and beyond. VenturX uses data-driven analytics to score and connect startups and investors at Seed and Series A financing.