Startups and Social Capital

At a recent evening meeting, a panel discussion under the #thinkleader program sponsored by IBM, the panelists represented different startups. They were smart, energetic and focused, aware of the murky waters in which they swam. It was clear that they had considered and planned for financial capital; likewise for the talents and skills needed. But a common thread of difficulties had to do with external support for their fledgling companies.

One panelist had been surprised at the drop-off from when he was a manager at a well-known brand, with many eager acquaintances, to the sudden vacuum now that he was co-founder of a startup. It wasn’t just the challenge itself posed by the need for external support, those willing to give referrals on their behalf, pass along useful ideas and the like, but the element of surprise of that drop-off.

Startups need to include building of social capital as part of their business plan. It’s not just marketing or branding. The ability to count on someone for information, for referrals, for the myriad types of support that can face a startup is a form of wealth. In a prior post, focused on individuals, the concept of Cognitive Wealth was explored. Similarly for startups, social capital needs to be planned for and built, as an explicit part of the business plan.

And if you’re young in your career or going through a major change, try thinking of yourself as a startup.

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