What to look for in forming or joining a networking group

Small business owners seeking to join networking groups are likely to find they have dozens, maybe even hundreds, of possibilities in their cities or towns.

But finding a group that’s right for you is a lot like hiring an employee or choosing an accountant — you want to find one that fits your needs. It’s a business decision to be made carefully.

By Joyce Rosenberg
SMALL TALK

http://www.sltrib.com/2004/Jan/01042004/business/125899.asp

(MATR encourages and happily works with individuals or groups interested in starting networking groups in their communities. Contact [email protected] for more info.- Russ)

If you are not sure where to look for a group, your local chamber of commerce can be a good place to start. And of course, other business owners you know might be in groups that interest you. Many groups allow prospective members to attend a meeting or two to check them out.

The advice from people who run networking groups is to look for groups whose members think and work the way you do, and who are likely to help you get the kind of business referrals you need. Referrals, after all, are the main reason why business people network.

"Make sure the folks out there are in your circle of influence," said Christina White, who co-leads a group in Worcester, Mass.

One question to ask yourself is, "Are these folks that are in front of your ideal company, or your ideal consumer?" said White, a partner in Brainware Consulting, a software firm.

For example, say you mostly do business with other companies. Then you probably don’t want to be in a group of people whose customers tend to be individuals.

You also need to have a certain chemistry with other group members. But that doesn’t mean you want to be in a group with your best friend. In fact, that might work to your detriment, White said.

Group size can also be important, because that affects how helpful meetings — and the group itself — can be.

In a typical group, each member has time to speak, to make requests and to offer leads during a meeting that runs one to two hours. If the group is too small, and some people don’t show up, it’s hard to get referrals.

Some business owners believe too large a group can be unwieldy. Yet Ben Bradley, who runs a group called Growth Company in Wheaton, Ill., says his group has helpful meetings with as many as 70 people showing up at a time. He runs a Web site, http://www.growingco.com, that also helps members — there are more than 1,000 on his mailing list — make and get referrals.

Many groups also evolve into support groups as time goes on, and some meetings might tend more toward support than referrals. If that’s not to your liking, keep looking.

Similarly, some meetings are more formal than others. Joanne Dennison, a management consultant in Martinsville, N.J., said her group holds monthly potluck meetings at members’ houses

But keep in mind that in many groups, what goes on during a meeting is just a small part of the networking process. Many people in groups find that they learn more about members — and lay the groundwork for good, solid referrals — during individual meetings.

"One-on-ones are the real key," White said.

If you find a group that you like, joining might not be automatic. Many groups limit the number of members from the same industry, so two or more people aren’t competing with each other for referrals. And groups might not admit someone current members feel uncomfortable with.

There are logistical considerations that also go into choosing a group:

* Meeting times. You need to find one that fits into your schedule — but you also might want to consider adjusting your schedule for a really good group.

* Requirements. Some groups require members to come in with a specific number of leads. Members who don’t can be fined, or even asked to leave. Some groups fine people who miss several meetings.

* Fees. Some groups charge fees, sometimes well into the hundreds of dollars. But that might be a worthwhile expense, especially since you are likely to make that money back with one or two good referrals.

* Management. There are professionally run groups, operated by nationwide organizations or companies, and sometimes by chambers of commerce. Other groups are run internally.

The same considerations all apply if you are thinking of starting a group. Dennison adds some of her own advice for the early days of a group: "Don’t let it get too large. . . . Start with four or five people; that group will formulate how the group is going to go."

No matter how you proceed, finding a group or starting your own, you need to have patience in the beginning. That means giving yourself time to get to know members and vice versa before you can expect to get solid leads.

"People refer business to people who they have a level of trust with," said Marcia Golden, a partner in the marketing firm DJD/Golden in New York. She helped found the Business Development Network, a group that meets biweekly in Manhattan.

And, you can expect to have to put in some time and work as you get to know your fellow group members — and be on the lookout for referrals for them.

"It’s absolutely fabulous to be in, as long as you’re willing to do work," White said. "If you’re in here and committed to the group and willing to work for it, it really does pay off in the long run."

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Joyce Rosenberg writes about small business for The Associated Press.

© Copyright 2004, The Salt Lake Tribune.

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Friendly start with upstart sites

Whether they survive or not, some dot-coms make nice connections

By Joseph Menn, Los Angeles Times

http://www.oaklandtribune.com/Stories/0,1413,82~10834~1870066,00.html

If there’s one place where knowing the right people is as important as it is in Hollywood, that place is Silicon Valley.

There, schmoozing with a chief executive can lead to more than a job; it can land you an introduction to a venture capitalist who will make you a CEO in your own right.

So it was only a matter of time before some elbow-rubbing entrepreneur started thinking about how to put social networking on the Internet and sell it.

That, plus founder Jonathan Abrams’ desire to meet more women, is pretty much how Friendster Inc. began its public life in March. Since then, 4 million people have signed up with the Sunnyvale startup to post their pictures, list their interests and while away the hours browsing online profiles of the friends of their friends.

Users spend an uncommonly long hour and 51 minutes in an average Friendster session, compared with 35 minutes on Yahoo Inc.’s personals.

Since Friendster was founded on the principle that no man or woman is an island, it figures that the company has attracted its share of companion sites. After Friendster pulled in $13 million in venture-capital investments from Kleiner Perkins Caufield & Byers and Benchmark Capital on Oct. 30, other VCs have sprung for pieces of social-networking sites run by San Francisco-based Tribe Networks Inc. and LinkedIn of Mountain View.

The three firms are connected by money, history and personal ties. Like many longtime friends, the founders share some fundamental beliefs while pursuing different business strategies and keeping secrets from each other.

The sites have some obvious differences. Friendster is dedicated to fun and frolic, with a core of users seeking social relationships. Tribe adds a business element. It’s centered on shared interests, but classified ads are distributed to people based on their preferences. And LinkedIn’s most important function is recruiting for jobs.

Still other networking firms are trying to drum up investors or users, including sales-lead generator Spoke Software Inc., dating site Tickle Inc. and contact-management companies Plaxo Inc. and GoodContacts Research.

Although the dollars aren’t as plentiful as they were in the late’90s, the influx has prompted skeptics to describe the phenomenon as a mini-bubble.

"There will be a shakeout, because not everybody will keep belonging to all of these networks," said Forrester Research analyst Charlene Li.

Signs of consolidation are already surfacing. Google Inc. tried unsuccessfully to buy Friendster this fall for a reported $30 million, and other giants from Microsoft Corp. to Monster Worldwide Inc.’s Monster.com might bid for social networking start-ups if they fail to make a go of their own development efforts, analysts said.

Regardless of whether the start-ups survive, their founders are true believers. Before creating their companies, they all spent time on Ryze.com, a San Francisco networking site that provided inspiration for their later endeavors.

Ryze users organize themselves by interests, location and current and past employers. Most pay nothing, though premium subscribers can search for other users more easily. Largely funded by Ryze founder and private investor Adrian Scott, the site has grown to

80,000 users and — unlike its successors — turns a profit.

Friendster founder Abrams signed up for a fledgling Ryze in August 2001 and helped with its first real-world mixer in Palo Alto. Soon he was talking to Scott and others about a site simply for dating that would echo the real-world way people meet — through friends.

A serial entrepreneur, Abrams did a substantial amount of work on Friendster alone in his apartment. Then he raised money from a handful of individuals. Among the first investors were Tribe founder Mark Pincus and his friend Reid Hoffman, who later launched LinkedIn. Both put down an initial $7,500 and now own 5 percent of the company between them. Friendster gets some revenue from advertisers and aims to turn a profit next year, though it won’t say how.

"Neither of us thought it was going to be a good investment," Pincus said. But that view changed this spring, when Friendster got him "a really good date," he said. "That made me a believer."

Pincus dusted off an old idea for a classified ad network that would use peer-to-peer technology, which was popularized by the Napster music service. That idea became Tribe. Since it opened for business five months ago, the site has gained 68,000 users who group themselves into "tribes" according to such interests as blogging and the annual Burning Man arts festival.

Tribe Networks earned financial backing from newspaper companies Washington Post Co. and Knight-Ridder Inc. as well as the Mayfield Fund. The company hopes to make money by facilitating sales from one user to another. Pincus said it’s too early to predict when he could earn a profit.

LinkedIn founder Hoffman and Pincus met when Pincus pitched another business idea to PayPal Inc., the online payment service where Hoffman was executive vice president.

Pincus also invested in LinkedIn, which launched in May and claims more than 65,000 members. Currently revenue-free, it eventually plans to add a fee-based premium membership.

LinkedIn is all about who else knows the people you know. Users can search out to four degrees of separation and scour profiles to find attributes, such as legal expertise. If a user wants to contact someone, each link in the chain must OK a request before it reaches its intended target.

Dating is not encouraged. "To get the substantial business people in, they want it to be clearly about business," Hoffman said.

The tricky part is what happens when online worlds collide. Which business contacts do you invite into a social setting? Which connections are only superficial, and which are deep?

Abrams, Pincus and Hoffman had to wrestle with those questions in their own lives.

Abrams wasn’t concerned that Pincus and Hoffman would overtake Friendster when they struck out on their own. But that feeling was put to the test this fall, after a small company claimed ownership of a patent for software connecting people through personal associates and put it up for auction.

The patent is known as "Six Degrees," after the famous theory that everyone on Earth is connected by no more than six intermediaries. Pincus and Hoffman decided to pool their resources and bought it for $700,000.

They said the purchase was a defensive move and they had no plans to go to court to extract royalties from business rivals. But they pointedly left Abrams out of the coalition.

It wasn’t anything against their friend, they said. It’s just that Friendster’s investors, Kleiner Perkins and Benchmark, might have started a costly bidding war.

Abrams said too much has been made about the split and declined to discuss it further. Hoffman said he’s taken no steps toward litigation.

But to Ryze founder Scott, the divergence demonstrates one of the fundamental flaws in social networking.

"It happens often," he said, "that someone you want to avoid is a friend of a friend."