Networks

Very Important and Set You Up For Success

Since I started on this journey, one of the things I have done is network. It’s come naturally for me all my life. I have an international network of finance pros that I interact with on a semi-regular basis. We bounce ideas off each other and, most importantly, become a conduit to get something done.

I never asked for anything when I connected people. Ironically, many people do. They charge a commission or some other thing. They ask for payment explicitly. That’s not networking, that’s commerce. Brad Feld said, “Give before you get,” and I was doing that my entire career. Sometimes people’s brains are hardwired that way.

To network well, it’s not meeting someone at a conference, shaking hands, and giving them a business card. It’s finding out real things about them outside of simply business. It is finding out how you can help them, not the other way around.

Sometimes, I have been proactive. “You need to meet this person and let me make it happen for you. I think good things can come out of it.” Other times, it’s targeted. “Hey, I have this idea and want to chat with this person.”

You cannot force something to happen. You tee up the ball and give them a swing. When two people I introduced drive it 300 or more down the middle, I get a kick out of it.

Ron Burt was one of my favorite professors at Chicago Booth. The greatest thing Booth did for me, besides introducing me to an entire class of fascinating people, was to codify academically things I already knew in my gut. Getting an MBA sometimes seemed like a terrible pain in the butt. Looking back, though, I not only learned a lot but it also helped me undertake the correct analysis to make some extremely good startup investments.

I saw this from a fellow alum on LinkedIN and am reprinting it so you get the gist of what I am talking about:

As an alumnus and interviewer for the Chicago Booth Sokolov Executive MBA, one thing becomes clear very quickly: not everyone is a fit — and that’s perfectly okay.

Just last week, during an interview, a candidate summed it up better than any brochure ever could. He said:
“I was always drawn to the topics people considered hard. The more demanding the professor, the deeper the learning — sign me in.”

That mindset is immediately recognisable at Booth. Very early in the conversation, the way candidates question, challenge, and reflect tends to reveal whether this environment will energise them — and often, they feel it themselves.

Booth is demanding by design. It attracts people who genuinely enjoy being challenged and who want to learn how to think, not how to shortcut. Those looking for easy answers usually self-select out.

You see that same curiosity well beyond the classroom. I still smile at the fact that an intimate dinner with an accounting professor fills up almost instantly — not despite the rigour, but because of it.

What keeps me deeply engaged as an alumnus is this: being part of a community that values intellectual honesty, rigorous thinking, and the courage to question one’s own assumptions — long after graduation.

Gut feel is awesome when it works, but it can lead you down some bad roads. Knowing why you have that gut feel, and how to look at it critically, helps you avoid mistakes.

Burt was the first person in my lifetime who mapped out on paper exactly what was going on in my brain.

Where it clicked for me was when he mapped out corporate boards and how cities are connected. It showed why the Midwest and Chicago were “flyover” country. It showed how the American South had historical networks going back to the Civil War. St. Louis connected the South to the rest of the country. I am sure if you redrew the networks, that might have changed, but back in 2006, it was still true.

As people have moved from blue states to red or purple states, I cannot help but think new networks are being formed. Old networks have persistent effects, though, and do not just go away. It was shocking to see that the St. Louis data in 2005 had persisted since 1865. That was despite the growth of places like Atlanta, Charlotte, Nashville, and other cities in the Confederate states.

Burt’s map also showed why NYC and LA were the two most important cities for networking in the US. That’s a broad statement, and once you boil it down to an industry, other cities become critical, but even then, NYC and LA remain.

Burt was discovering social media before it was social media. He looked and deciphered networks in a corporate setting. It was fascinating to me, and if I had ever become an academic, that’s where I would have concentrated my efforts.

Burt was also able to apply Chicago Price Theory to networks. There is supply and demand in networks. That means, there is a price. Because of the pathbreaking work that Gary Becker engaged in, economic theory was able to make the jump from what it was into social situations.

I started talking to State Treasurers when I began walking this path. I continue to chat with them. First, it was to learn about the role. Now, it’s about what ideas they brought to their state that can be implemented in Nevada to eliminate waste, fraud, and abuse and save taxpayers millions of dollars.

What has been fun is interacting with fellow Chicago Booth people who became State Treasurers. We chuckle about the rigors of business school. Booth is not a place where you get a “Gentleman’s C”. The Booth culture persists over time. You earn everything you get. The professors are nice, but they challenge the heck out of you.

I think it is a huge bonus if you can get an elected official with an energized professional network they can tap into to advantage taxpayers. Mine is international. You will get access to it if I become the state treasurer of Nevada. That’s not up to me, of course; it’s up to you.