You don’t need to know everyone. You just need to know several well-connected individuals.
And my God, this proved to be right for me over and over again.
Let’s go nerdy. And let me show you something. Something that made me first believe in what I’m preaching. That made me delve deep into it. An excerpt from the math book that tells us „It’s worth building relationships. But be smart about it.”
This will explain to us how to network when we may not like people much or have a limited tolerance for human interaction.
Or, well, simply teach us how to set our minds to achieve the peak performance in relationship building.
Can you imagine a book about data visualization and graph analysis would spark a passion for human connection? Something so nerdworthy that only basement-dwellers (or, well, academics) would find interesting?
Worry not! I will not get into advanced math theory or anything. There’s no need for such. Stay with me for just one concept. The concept that will explain to you how to put the biggest leverage to your networking experience.
Network Effects
This is the concept I started exploring first. With the wonderful and exhaustive content from my favorite NFX fund. They boosted my interest, which later made me realize my worldview is constructed of such networks. Recommended af.
Network effects originally appeared as a concept at the beginning of the 20th century. Until recently, they were regularly mentioned by many people in the tech industry. Nowadays, somewhat forgotten, maybe less sexy. Like, everyone wanted their digital products to have a network effect. A blitzscaling potential from the get-go. But now, seems like hoping for the “AI” suffix will suffice.
Maybe it’s my bubble. But in the era of AI, I don’t hear about it so much. Has everything about it already been said? Thus not even worth mentioning? Or maybe we don’t need them anymore as pillars for growth and value generation shift?
And why should we care about them if we may not be building products but relationships?
Because understanding the concept is enough for many to recognize the power of networking. To learn about finding leverage in our game.
Network effects - a phenomenon in which the value of a product or service increases as the number of people using them increases.
This is how we have credit cards (the more people use them, the more common this form of payment becomes), social media, and apps like Uber.
According to NFX, network effects are responsible for 70% of the value created in technology since 1994. In my opinion, network effects are also responsible for creating value in practices such as networking.
Our connections and relations with each other are forming a web - a social graph.
Imagine - every person in our social graph potentially increases its value. The more dumpling fans we know, the greater the chance of knowing the grandmaster of green lentil stuffing, whom your acquaintance from the German federal government is currently looking for. So let’s go for quantity and hope to cover every field there is? Kinda impossible.
There’s a solution to that. But bear with me a bit longer.
Mathematics
I'll reassure you right away - I won't go into advanced formulas. There’s no need for those. Nevertheless, let's get to know the concepts described in the literature as the laws of network effects. We will go through them in chronological order - starting with concepts being the longest with us, and ending with the most recent. (Yup, the last one explains why I’m writing all of this)
Sarnoff's Law
Let's start in the United States of America in the 1920s. Mr. David Sarnoff, an entrepreneur and media tycoon. He founded RCA radio, which over time was supplemented with a television component and transformed into the NBC corporation we know today.
What interests us is Sarnoff's Law, which says that the value of a network grows proportionally to its size. But drops as well - radio/television dominated when it had more and more viewers. At the same time, viewers did not derive direct benefits from the increase in the number of media consumers. Everyone had a relationship only with the broadcasting station.
As a result, we get a very simple network effect saying that the value of the sender’s network (V) equals the number of people we have in a given network (n). Do we want to increase potential? We add new people.
An example is a professional chef showing on television how to make dumplings. Or this blog. The more you read my blog, the more valuable this network is. Or if you consider everyone around you just to serve your needs.
Sarnoff's law - the sender's network value (V) is proportional to the number of recipients (n).
Metcalfe Law
However, when it comes to our building interpersonal relationships, we never exist as an exclusive point of interaction for everyone. Our acquaintances - as well as every stranger - have their own relationships with each other. It is never the case that only we have a bond with a particular person.
In a social group, potentially everyone can have a relationship with everyone. The value we get from such a state of affairs is described by Metcalfe's Law, which tells us that the maximum value of a network (V) is achieved by connecting everyone (n) to everyone (n). And adding each new member to the network increases the value of the whole exponentially.
Just as Mr. Metcalfe did in 1980, imagine a cable telephone network. When there are only two telephones in the network, they can only communicate with each other. Five telephones already form a network of ten potential relationships. Twelve devices as many as offer 66 combinations of who could strike up a conversation with whom.
By entering a community of dumpling fans, each person in it gives you additional value because of related interests and passions. The value you can mutually generate for each other.
Metcalfe's law - the value of communication networks (V) is equal to the square of the number of users (n^2)
Reed's Law
And it would seem that the above example also represents the case of social media. However, we can go even further in our analysis. In 1999, David Reed noted that the value of a network can grow in several ways: by adding new members, increasing the number of connections, but also increasing the intensity of connections. In other words - it is not always the case that we uniformly derive benefit from all network participants.
This means no more, no less, that networks enable clusters of users where communication is denser. Social media illustrates this well. You have access to all members, but a significant portion of the activity is spent in smaller, dedicated subgroups, circles of interest, or relationships.
As we can calculate, the value of a network (V) that allows clustering within itself not only grows in proportion to the number of users but is further increased by the maximum potential number of clusters (2^n) that can be created. With the smallest cluster consisting of just two people.
In the community of dumpling fans, we can identify subcultures of proponents of adding an egg to the dough or advocates of the superiority of meat dumplings over those with cabbage and mushrooms. Those tend to interact more frequently and intensively with members of their tribe.
Reed's law - the value of a network (V) is the sum of all the participants in the network and the potential clusters they can produce inside it (n^2).
It already sounds cool! That's why there's so much talk about creating online communities and tribes within those communities. Or, to put it in a personal context - having a cluster of friends for cooking dumplings, a cluster of programmers, or a cluster of golf people.
My enlightenment came a step further. The above mentioned correlation of value and number of people in the social graph applies when talking about a single network of human relationships. Of a single person.
The Enlightenment.
But wait a minute! Doesn’t EVERYONE have their own network!? And no single network is saturated and active enough to satisfy the maximum potential of Reed's Law!
Therefore, in order to maximize the value derived from creating ties and social networks - so basically networking - it is necessary to connect and integrate multiple clustered networks.
More often than not, each selected group has inactive segments, as well as white-hot centers (I won't elaborate on this here - it's mostly about clusters, where activity is highest). But we’re limited human beings. With already saturated social graphs, overstimulated, and with too many connections already. Because of the saturation, expanding the network is hard. Sooo increasing its value seems hard as well.
But you know what's easier?
Using a person - an integrator - to build bridges between sets of clusters. For the one to provide clusters with the benefits coming from groups of a completely different cluster/network.
A community of dumpling fans will not, by itself, interact with a group of German Sheppard’s enthusiasts. But if dog owners were to organize a meetup for their community, a potential catering could consist of dumplings produced by this distant group. All it takes is to identify the needs and have a relationship built with someone from within both dumpling and dog clusters.
There’s no need to know everyone. It is enough to be a networker who knows a lot of different people from different networks and has an eye for potential synergies. See? That's exactly what struck me back then. Remember when I mentioned the moment in my life when I became fascinated with meaningful networking? Well, that was the moment when I started translating all of the above concepts into reality. And it started to work.
That’s my personal law.
Doman’s Law - maximization of Reed's Law (V=2^n) occurs as a result of the existence of an integrator of many clustered networks, which do not have too strong ties formed between them.
“People who are really good at relationships are like genies – it seems like they have some kind of magic. I try to work that magic by cultivating genuine connections with people in a huge variety of different networks.” - Peter Boyce
I want to be in the middle of the Belgian communication nodes.
Belgium appears to be the model bicultural society: 59% of its citizens are Flemish, speaking Dutch and 40% are Walloons who speak French. As multiethnic countries break up all over the world, we must ask: How did this country foster the peaceful coexistence of these two ethnic groups since 1830? Is Belgium a densely knitted society, where it does not matter if one is Flemish or Walloon? Or we have two nations within the same borders, that learned to minimize contact with each other?
The answer was provided by Vincent Blondel and his students in 2007, who developed an algorithm to identify the country’s community structure. They started from the mobile call network, placing individuals next to whom they regularly called on their mobile phone [2]. The algorithm revealed that Belgium’s social network is broken into two large clusters of communities and that individuals in one of these clusters rarely talk with individuals from the other cluster (Image 9.1). The origin of this separation became obvious once they assigned to each node the language spoken by each individual, learning that one cluster consisted almost exclusively of French speakers and the other collected the Dutch speakers.
Image 9.1 Communities in Belgium Communities extracted from the call pattern of the consumers of the largest Belgian mobile phone company. The network has about two million mobile phone users. The nodes correspond to communities, the size of each node being proportional to the number of individuals in the corresponding community. The color of each community on a red–green scale represents the language spoken in the particular community, red for French and green for Dutch. Only communities of more than 100 individuals are shown. The community that connects the two main clusters consists of several smaller communities with less obvious language separation, capturing the culturally mixed Brussels, the country’s capital. After [2].
- Network Science by Albert Laslo Barabasi
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