Venture capital is often referred to as an apprenticeship business because so much important learning comes from day-to-day experiences. Yet, as an article published by the Business Development Bank of Canada (BDC) explains, you can shortcut the learning process by learning from experts: “Your learning curve can be shorter—and your results better—if you learn from pros who’ve already mastered key … ... read more
How to Build Social Capital
Relationships are the lifeblood of success in any industry or domain. Building your social capital can propel you to reach new heights and uncover unprecedented opportunities. But building social capital is challenging. It requires a keen understanding of human behavior, relationship intelligence, and emotional intelligence.
Here are three influence techniques to help you build social capital and build a strong and powerful network.
Research has shown that when relationships are reciprocal, it gives rise to a powerful norm that shapes behavior. Research, for example, has shown that people are much more likely to endorse co-workers’ skills on LinkedIn if they endorse yours first. The key to building strong relationships is to engage in reciprocal behavior. There are three factors that increase the chance that reciprocity propensity:
- Initiation. Reciprocity is more likely if you’re the first to introduce a favor
- Exclusivity: Reciprocity is more likely if the recipient feels special and privy to something unique and exclusive
- Weight: Reciprocity is more likely if the perceived value of the favor high
In addition to reciprocity, scarcity is another powerful influence tactic that will help you build social capital. Scarcity boils down to supply and demand. Consider one experiment spearheaded by social psychologist Stephen Worchel. Researchers asked participants to rate the quality of cookies. Half of the participants received a jar containing 10 cookies, the other half received jars with only 2 cookies. When participants received jars with only two cookies, they rated the cookies as more desirable, more attractive as a consumer item, and more costly than the cookies in abundant supply.
When you offer your relationships something scarce, you build a stronger relationship. They begin to see you as an exclusive conduit to acquire something that would otherwise be impossible or more difficult to acquire.
Your social capital will rise to new heights when individuals see you as an authority figure. When you’re seen as an expert in a particular domain or have unique credentials, individuals are more likely to turn to you for advice. Authority can be achieved by exhibiting an air of confidence—this is called perceived authority. The reason authority is so powerful is that it’s what’s referred to as a decision heuristic, or a shortcut for making decisions. We trust authority figures to protect us and guide us towards improved decisions and better actions.
Esteemed entrepreneur and venture capitalists Mark Suster has published a “Guide to Using Authority & Social Proof in Fund Raising”. It’s well worth a read—or multiple reads. In the context of authority, he explains, “We all want authorities who are smarter on specific topics than we are...So you need to find anchor tenants who have authority in your field and who are respected by other angel investors in order to maximize the benefits of social proof.”
Social capital can supercharge your ability to build strong networks and relationships. Building social capital is an art and science. By capitalizing on authority, reciprocity, and scarcity, you can ensure you’re able to consistently build social capital and propel your personal and professional success.