Did your mum or dad ever tell you when you were growing up, “it’s not what you know, it’s who you know”? To me this idea is proving more and more true as times change. Many successful business minds argue that your networth is equal to the quality of your network. It is no longer about having all the information in the world, or how many letters you have after your name but the people around you that can help you get where you want to go. Do you really think Richard Branson knows everything about running a company, or he just has access to a great team that does?
Nothing can beat the power of a ‘favour’ or a ‘personal recommendation’. Those that have built a quality network of people around them and take the time to maintain those relationships will always be more successful then those that simply expect things to come to them or use traditional approaches to get ahead.
An article by The Global Evolutionary Network (2012) compares a network to a fax machine. One fax machine has no real value but when multiple people are utilizing this piece of technology the value increases exponentially. This network effect is transformational. Unlike traditional economic theory, which is based upon scarcity (the traditional definition is the allocation of scarce resources); the network economy is just the opposite. The more you share the more you value what everyone in the network has!
“Networks are the gasoline of the future. No matter how beautiful your new automobile may be, without gasoline it goes nowhere. No matter how good your offering is, it will not succeed without a network. The deeper and wider your network, the faster your offering will be accepted and the less likely others will be able to copy it” (GEN, 2012). Look at companies like Facebook and Twitter they had to do no traditional marketing to promote their brand, they just relied on hubs (highly connected people) to pick up on what they were doing and share it. This has also been the case for companies like Asos.com, Amazon and other online businesses that completely relied on viral growth for their service. Start up companies are now approaching local known bloggers (influencers) to write about their business to tap into their networks. This is proving to be a more cost effective strategy then engaging in traditional forms of advertising.
Companies (and individuals) therefore need to start working on and maintaining their networks, and the introduction of the internet and social media has made it easier then ever before. The concept of leverage (ever more with ever less) is key when looking at the power of a network. How much easier would it be for a company to leverage off another company’s network through a personal recommendation from them(alliance/host ben) then it would be for them to spend money and time on running campaigns to promote themselves.
I don’t know if it’s just me but this concept appears to be the future. I have experienced it with life already with simple things such as finding someone to design up a logo or to help a friend get a job, it’s always easier to put something out to your network then it is researching and finding something yourself. Do you find that with increased advertising noise and marketing messages you are inclined to trust peer recommendations more? Or do you still base your decisions on ads? Or a combination of both? Would love to hear your views on this…