Mind to Market

Saturday, August 19, 2006

Networking on Steroids

Being a basic techno geek by nature, I've often been puzzled by the back-slap-hand-shake road to success. Just what makes this path so valuable and how does it operate? In his book "Never Eat Alone: And Other Secrets to Success, One Relationship at a Time" Keith Ferrazzi provides a very detailed description of the social networking side of business. Before email, the Internet, blogs and IMs, this was the ONLY way to do business. Ferrazzi doesn't go into too much detail about what kind of business he's in, that's really beside the point, instead he presents how he networks and the benefits he's reaped from it. If you have the total introvert techie on one end of the spectrum, Ferrazzi would be at the opposite end. He invests heavily in his network and it seems to be his most valuable career asset. His two main objectives are:

  1. Quantity
  2. Quality

and the two work to complement each other; if you cast a wide enough net, you're bound to find some people that you can work with, if you work well with those people more will want to join your network. Bob Metcalfe, inventor of the Ethernet and found of 3Com, advanced the theory now called Metcalfe's law: the value of a network increases in proportion to the square of the number of participants. This was first applied to computer networks but now seems to be gaining some traction as a model for social networks. Now this is starting to make sense!

In the original Metcalfe's law, each node of the network, i.e. each computer, was valued equally. The value of the network didn't depend upon whose computer it was just as long as it was a computer. However, some computers did give you access to other large networks, if you could gain access to a corporation's or university's network that would increase the overall network significantly with a single node. With social networks, there may be a gatekeeper that controls access to a valuable contact or group and without that gatekeeper's acceptance you cannot get access. Therefore the gatekeeper increases in value. There are other factors that can increase or decrease an individual's value in a network, which will degrade Metcalfe's law for social networking, but the basic idea is there: social networks increase in value at a super-linear rate.

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