Opinions expressed by entrepreneurial contributors are their own.
For countless entrepreneurs, the tried-and-true way to find funders and get a startup off the ground is through peer-to-peer connections — but very few of them pay proper attention to constantly expanding their network.
There are many other important steps on the road to startup success: revenue growth, hiring the right talent, market knowledge, the list goes on. But in this process there is an indicator that attracts attention: “It’s not always something you know, but WHO You know.”
“WHO you know” often includes support systems that include the affluent economic classes. These successful entrepreneurs have navigators—successful relatives who can offer introductions, former professors or classmates who can review business proposals, etc.—these low-income entrepreneurs without strong social networks usually not.
It is probably true that entrepreneurs like Jeff Bezos or Elon Musk are so alone that they will succeed no matter how they start. However, entrepreneurs from non-privileged backgrounds cannot retroactively attend a top-tier school or take an entry-level position at a prospective company. They cannot turn back time and ensure that their social circle includes the successful people they hope to one day be. All they can do is focus on what’s in front of them. Most importantly, they can intentionally build their social capital.
Related: ‘Who You Know’ Can Actually Harm Your Entrepreneurial Success Here’s Why.
Thankfully, while there’s an acknowledgment that many founders don’t have access to the right form of social capital, I’ve seen those who do have it look for ways to share or provide it. One example is Vimenti’s Project Makers, one of my company’s projects that seeks to develop entrepreneurial skills in young workers.
The benefits of these programs and many others go far beyond improving a potential business idea. They speak to the heart of social capital, which is the development of trust between talented entrepreneurs without opportunities and the established financiers, mentors and collaborators who can help them get where they want to go.
This trust is critical for entrepreneurs at all stages, but especially early stage. As most of them well know, they’re looking for direction, not just money — business-building advice they can only get from those who’ve done it themselves, and therefore a social class they wouldn’t otherwise be able to interact with. .
Think of a community and a person who only knows the people in their immediate surroundings. If they can’t incubate the trust part—how to build trust and create environments where trust can thrive—they’ll never get to the part where this priceless asset becomes part of their social capital.
Many government programs have attempted to bridge the gap in class relations. But as I see it, these initiatives only highlight the need for entrepreneurs to take greater ownership of their own networking solutions.
Related: How Developing Relationships Can Help You (and Your Company)
Consider, for example, the federal government’s Recompete Pilot Program, which offers up to $200 million to communities whose prime-age employment gap lags far behind the national average. This is a worthy program that my organization hopes to use, but it cannot unilaterally close long-standing inequality gaps. The injection of financial capital is important, but it alone plays little role in solving the problems of those who really need social capital.
Academic research on class relations suggests that for every dollar of real capital brought to struggling communities, an equal amount must be invested in social capital. This is not theoretical; for example, Jobs for the Future is a nonprofit organization working to transform the US education and workforce systems and achieve equitable economic progress. But it’s essentially a form of social capital: a program to increase the cross-class connections of potential low-income job hunters, including better education, training, mentoring and, most importantly, exposure to the types of jobs people have already done. hunters may never have been before.
There is no quick fix to this problem. Class is a great divider in most countries, not just the most entrepreneurial countries like the United States. Solving this problem can be a low-cost way to address a startup’s ongoing hiring needs and boost economic opportunity and mobility. This is important on a large scale because entrepreneurship is usually how economic mobility is created.
This is a statement I can make with partial certainty because as the executive director of an organization that supports a job accelerator, a job training center, school programs, and a health clinic in Puerto Rico, we work on similar efforts to increase social capital, too.
In my work, the difference between what those in affluent communities take for granted and what those in low-income communities lack is stark. I constantly deal with the trauma, guilt, and shame associated with poverty. I see that the barriers to mobility are psychological as much as physical, and how the traps that keep poor people poor can only be overcome by exposure and connection to those who have never known those limitations.
Especially for small businesses that don’t have a lot of resources, it can be difficult to join intentional groups for entrepreneurial mentoring. It’s not just about giving instant feedback on marketing, sales or production. The hoped-for result is an entrepreneur who has expanded their business opportunities as their network grows and hopefully will continue to grow.
It is entrepreneurship that is the most important and most difficult to accomplish in achieving this last mile of economic mobility. Here’s what I know – and it’s based on people I know.