How long have you been in business? Five years? Ten? Fifteen?
Regardless of how long you’ve been in operation, you can probably look back on the successes you’ve experienced with a sense of pride. Compared to day one, you and your business have probably grown astronomically.
And, at least to some degree, you probably have your network to thank for that. Over the years as you naturally meet new people, that network has probably expanded. But there’s a problem: Although your network may have scaled, the number of people you can successfully manage hasn’t.
Let me explain why this is such a big deal.
Operating Within the Dunbar Number
According to the Dunbar Number, the average person can only effectively manage about 144 relationships at any given time.
And here’s the problem: The 144 people that got you where you are today probably aren’t going to be the same 144 people that get you where you want to go next.
In my work with entrepreneurs and VCs, there almost always comes a point where they need to reassess their network. After all, a network that isn’t managed proactively almost always “expires” or outlives its relevancy eventually.
This is when I walk them through how to “refresh” their network with the types of relationships they need to succeed. Let me give you an example.
Testimonial: Making the Leap from Good to Great
One of my clients is a well-known venture capitalist. But before he was a VC, he’d done some great work around Silicon Valley as an Operator, improving products and sales organizations.
When he made the jump to investing, he was just one investor amongst thousands. Fast-forward to today, and he’s undoubtedly one of the top 100 in the industry. So far, so good.
But now he’s asking himself, “What’s next?” The answer? He wants to become one of the top ten VCs in Silicon Valley.
After performing an analysis on his portfolio, he noticed that many of the best-performing companies had relatively young founders (a trend back by the recent work from First Round’s 10th anniversary).
First Round released some findings from their 10 Year Project, a data set of 300 companies they invested in with nearly 600 founders. One of the more interesting results they shared with the industry was that while the average age of all founders was 34.5, the top 10 investments had an average age of 31.9.
The findings surprised my client, so he ran an analysis of his relationships and discovered the mean age of his network was higher than the mean age of successful founders.
This finding made him realize he needed to put a greater emphasis on refreshing his network with younger entrepreneurs. We devised a programmatic approach to achieving this, and he’s now well on his way to securing that top-ten position.
Today, I’d like to walk you through a similar exercise to decide whether or not your network is still relevant to your goals.
Don’t Forget Who Brought You Here
But before we start, a recommendation: Celebrate all the people in your current network who have stood by you over the years; those who have, in some way big or small, contributed to the success you’re currently experiencing.
Reach out to them and thank them specifically for what they’ve contributed—whether that’s funds, technical support, or moral support—and let them know how much you appreciate them.
Not sure what to say? We’ve got you covered. Check out How to Make Powerful Connections by Writing Unexpected Thank You Emails
Once you’ve done that, it’s time to focus your attention away from those relationships that have “expired” and instead begin to invest into those that can take you from where you are today to where you want to be.
It’s important to recognize that there’s nothing disingenuous about this process. It’s simply recognizing those who have helped you in the past, identifying those who will help you in the future, and ensuring you have the right balance between them in your network.
3 Questions to Test the Relevancy of Your Network
Here’s the three-question process I walk my clients through to ensure their network is aligned with their goals.
Question #1: What Do I Want to Accomplish?
What are your long-term goals? Or the natural “next step” of your journey from “good” to “great?” Who do you want to become? What do you want to do?
Keep in mind: There’s no “right” or “wrong” answers here. Just find the answer that rings true for you. For example:
- I want to become one of the top 10 venture capitalists in Silicon Valley,
- I want to have a net worth of $3M, or
- I want my network to generate 7 high-quality referrals each month.
The relevancy of your network is in direct correlation to the clarity of your goals, so take the time to figure out exactly what it is you want.
For a full guide on effective goal setting, check out Stop Setting Weak Goals: The Ultimate Guide to Creating Goals (That Actually Get Done)
Question #2: What Types of Relationships do I Need to Accomplish My Goals?
Just like my client above, you may need to do a little homework to come up with an unbiased answer to this question.
But at the end of the day, it comes down to figuring out what types of people are most likely to send you the referrals and opportunities you need to reach the next level of your career. For example:
- Fintech entrepreneurs under 35,
- Investors at the top 5 firms in Silicon Valley, or
- Lawyers specializing in the tech industry.
The more specific your demographic, the more likely you are to build a network that’s going to help you reach your goals. So really take the time to outline exactly what type of relationships you need to be successful.
Not sure what type of relationships you need? Check out How to Generate Valuable, Relevant Opportunities with a Relationship Objective.
Question #3: Do I Have Enough of These Relationships in my Network?
Now take an honest look at your network. I’m not saying every single relationship needs to be directly relevant to your goal, but you need a sizeable portion of people who are both willing and able to support you on your journey.
There’s not necessarily any “magic number” or ratio when it comes to balancing your network. But as I’ve written about before, about 5% of your network should be what I call “Legends,” or people who are both willing and able to send you relevant opportunities.
So at a bare minimum, your Legends—or the MVPs of your network—should be directly related to your long-term goals.
To learn more about Legends and how to identify the most valuable members of your network, check out How to Rate Your Network to Get the Most From It.
Never Stop Growing Your Network
Ultimately, the answers to these questions might surprise you. If you’ve been in business for over a decade, there’s a good chance your network is reaching its expiration date and is in need of a revival.
And once you identify the types of relationships you need, don’t hesitate to act on that information. Start building relationships with these types of people as soon as you can.
Finally: Create a habit of consistently refreshing your network. Once a year, take an hour to go through your network and ensure it still aligns with your goals.
If it does, great! Keep investing into those relationships. But if it doesn’t, don’t hesitate to bring in new people.
Tip: High-quality networking events are great opportunities to kickstart new, relevant relationships. If networking doesn’t come naturally to you, we may be able to help.
I recommend you download our free book, Networking Events Demystified: 9 Rules to Nail Networking Conversations Every Time.