Leaders Build Networks as They Lead

Construction of phosphorous dependent metabolic network

Source: PICRYL

Dave traces his success back to a lemonade stand, which he started when he was 8 and which (so he claims) revolutionized lemonade sales on street corners in New Jersey. One day, when I asked Dave why he kept referring to his earliest entrepreneurial feats, he replied, “Because you learn from the beginning what you need to do, and then you keep doing it instinctively.” What he meant, was that basic experiences are formative. For a business person, a vision becomes real as he or she applies what they’ve learned to the next challenge. In the context of leadership, they learn how to lead so that, when the time comes, they can make the right move fast, with confidence.

So, as to Dave’s lemonade stand . . . he’d sell about 50 cups on a good day. But customers sometimes crossed the street to the lady who sold frozen ice pops. Dave realized that however cold he made his lemonade, her treats were colder. What could he do?

Dave consulted his first expert, his mother.

She told him that you couldn’t just freeze lemonade and sell it, since there would be no way to eat it. “So, why not offer lemonade pops?” she asked him. A light bulb went off in Dave’s head.

But it wasn’t the light bulb you might think. In one of our sessions, Dave told me that the first lesson in business that he learned was the value of experts. “My mother knew a lot about pops.” Dave learned, at age 8, that when you can’t solve a problem, you find people who can—and then you take their advice. Dave’s mother said they’d have to buy popsicle molds and that she’d advance him the money (repayable out of his profits at a standard rate of interest). Once they read the directions on the molds, Dave and his mother experimented with recipes.

“I was so excited when I rolled out my new product line,” he told me. “I gave people a choice: lemonade or popsicles. My sales went way up.” Dave and his mother continued to experiment with limeade pops and raspberry pops. “You see,” he told me, “once you find an expert, you can access their expertise and bring it along as your business grows.”

When he started his next business, in college, Dave was selling tee shirts. “I had this vision that I could get rich before I even graduated, scaling up my sales to a hundred colleges. It was like how I multiplied selling popsicles.” Dave’s model was that anyone could upload a photo of an image, and Dave would print it on the shirt. People responded. “But then I came up with my next insight. When I hit the wall with ads, I needed to network.” Dave recruited his friends at other colleges into his “network.”

He made tee shirts for these friends at no cost and asked them to wear the shirts. When someone inquired “Where’d you get that?” the friend would explain the procedure (for a cut of the profits, of course). “What I learned,” Dave told me, “was that you can’t depend solely on yourself. By the time Dave graduated, he had sales at over a hundred campuses. But it started with Dave’s networking initiative.

Of course, you hear that networking is a key to success. But Dave told me that until he’d actually relied on it, he’d been skittish. “I was a little embarrassed, and I had to get used to it.” That is, he had to make the practice feel routine. “After a while, I found that networking works both ways: I’d ask, they’d ask, it was all part of getting ahead.” The point is that Dave had to learn how to live (and operate) in a networked world, so that as he made his subsequent, big-time moves, networking felt natural. “What I was after,” he said, “was a network of experts. I wanted people who could do stuff, but mostly who really knew stuff.”

After college, Dave got his chance. He opened a micro-distillery. He knew nothing about making whiskey, but he hired guys who did. He made friends among other small distillers and, when he decided that the business was too small to compete nationally, he called on the network of distillers he’d established to help him find a buyer.

Dave had been a small businessman since the lemonade stand and felt that since then he’d experienced the problems of the species. He wanted to be a leader in the small-business space.

He thought that the basic need of all small businesspeople was access to affordable capital. “What if,” he said, “there were a network of investors willing to fund small businesses, with the expertise to evaluate the level of risk? You wouldn’t have to rely on banks, which are so conservative, or venture capitalists, who want to micro-manage you.” Then he went a step further. “What if the investors were other small businesses, too small to diversify into other fields but big enough to lend money at competitive rates?” It sounded interesting. We discussed how he would pull it off and how, if the venture were successful, he would profit along with the investors.

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Dave had to incorporate his service, of course, and then hire a lawyer, an accountant, and several analysts—all of them experts!—who could evaluate the risks of potentially eligible companies. He would put together a group of companies that qualified for capital and another that could invest. His role was to make the introductions, backed up by solid analysis.

For the service, he knew he’d need the right kind of experts. Also, he’d need to call on his network of friends, several of whom were now on Wall Street. “But mostly,” he told me, “I am not just using my network but creating a new, synergistic network.” He hoped that it would become self-perpetuating, as some companies swung from needing capital to wanting to invest in still more companies that needed capital.

In effect, Dave understood that as we begin to lead, we need all sorts of support—the rights teams, specific experts, and various networks that we can call on as the need arises.