In the entrepreneur world, it's still a popular misconception that the "idea" is everything. Even though investors like myself have long made it clear that we invest in people, not ideas, new venture owners insist on talking about their latest "million dollar idea," rather than their "million dollar team."
The power is in the people, their business relationships, and their connections.
For example, I grew up in IBM when Bill Gates was helping us deliver the first IBM PC. We slowly realized that Microsoft's value went far beyond his technical contributions, due to his connections with key software developers and relationships with hardware manufacturers who could make the PC revolution universal.
We funded him, and he ended up superseding even IBM.
After years of consulting, I find that the same lessons apply to businesses of every size and stage. Yet many business owners and leaders don't seem to understand the basic principles of building business relationships and connections, or don't know where to start.
For the benefit of all, I offer the following key steps:
1. Keep relationships a top priority.
Some executives consistently tell me they are "too busy" to find and nurture the relationships they need to move their business to the next level.
Others let their ego convince them that they have all the answers, and no one can help. I believe collaboration is the lifeblood of every business.
For example, most people think Mark Zuckerberg built Facebook all by himself. In fact, he had four development co-founders, built a relationship with Peter Thiel, a top VC who invested early, and enticed Sheryl Sandberg to fill the COO role he sorely needed.
2. Use and reward curiosity as a basis for relationships.
Nurture relationships and connections with people in your realm who exhibit curiosity and a passion for learning. These are win-win arrangements leading to continuous innovation, early access to new markets, and a higher return.
Connections across business domains are even better. Bill Gates, for example, shared a common curiosity and mentoring relationship with Warren Buffett, although their business domains were quite different. Oprah Winfrey was helped in her career by her relationship with the famous Barbara Walters.
3. Build connections with key customers and competitors.
With the pervasive internet and global social networks, it's easy to be visible and connect to your customers, and they expect it.
Smart business leaders look forward to talking with their competitors--not to steal ideas, but to learn more about the industry and potential win-win opportunities.
Even though Steve Jobs and Bill Gates were bitter rivals, they knew each other very well, and both realized the value of their software running across multiple platforms, and benefited from joint efforts to standardize key protocols and interface elements.
4. Contribute time and skills to a non-business higher purpose.
Identify a "higher purpose," such as a social or environmental issue, that embodies your passion and could benefit from your strengths. In that context, you will likely build relationships with other leaders who could be instrumental in adding long-term value to your business.
Again, back to the case of Bill Gates: IBM CEO John Opel had already built a connection to Gates's mother while they were both serving on the board of United Way, and this relationship facilitated the contract that propelled the Microsoft business into success.
5. Expedite growth with strategic partnership connections.
Very few businesses can grow organically fast enough to stay ahead of competition.
Business leaders with wide relationships are able to more quickly find and close on alliances to fill gaps in their product line, increase distribution, and reduce costs through common components.
Some leader has to initiate every alliance or partnership connection, and nurse it to fruition. If you're too busy or comfortable with inside company activities, you're likely to miss the potential of a Nike and Amazon relationship, or a similar win-win deal.
Overall, my experience tells me that a good idea is necessary, but not sufficient, to foster a sustainable and long-term successful business. Only the right people, with the right focus on business relationships and connections, can do that.
The ability to build these relationships is not a birthright--it can be learned and honed with effort. Where is this effort on your priority list?