The Why and How of Social Capital

Business Brain, the Entrepreneur show, episode 415 for Friday 13 January 2023. Greetings, folks, and welcome back to Business Brain. Or welcome to Business Brain. If this is your first episode, we're doing a little bonus episode this week. We're trying a little experiment to see how we like this, how you like this. We're doing two shorter episodes this week, so let us Know feedback at BusinessBrain show if how you feel about this one way or another. And of course, for every email that you send in to feedbackusinessbrain show, if we feature it in an episode, you're entered to win a MacBook Air here in 2023. So. So that's pretty exciting, folks. Here in Durham, New Hampshire, I'm Dave Hamilton.

And in Lafayette, California, I'm Shannon Jean. Happy to be talking, although we're recording this early. Happy to be here on a Friday.

Yeah. Friday the 13th, no less. So great day.

Just one more awesome Friday in the list. Long list of them. Yes. You gotta be optimistic. And we're gonna talk about optimism today as we explore the topic of social capital.

I have a, a question for you before we get into social capital. I got, I got a phone call earlier today with somebody asking me, somebody pitching me on having them package up what we do here at Backbeat Media and try and get us GSA contracts, the government contracts, like for our business, which I, I thought was really strange for a business that sells effectively podcast and web ads.

Yeah.

But, you know, this company was like, oh, yeah, we definitely want to talk to you about. Have you ever done the whole government contract thing, getting approved as a vendor, whatever, any of that stuff.

Long, long time ago. It was kind of localized. It was not a federal level.

Sure.

Okay. I, it would be, I would love to have someone come on the show if you're hearing this and talk us through the whole GSA thing and the benefits and the, everything, because it is, it is fascinating.

Yeah. I mean, I know I dealt with, not that, but something in a, in a micro way similar to that when I was at Citibank. It's a pain in the neck to get through the process of getting a government contract. Just like it was a pain in the neck getting through the process of getting through a Citibank contract for an independent contractor for, you know, for a small business. And then I wound up making a ton of money from that because they didn't, they didn't want to go through that again. So they fed every other independent contractor that they hired through me and told me to charge an extra 10 bucks an hour. So, like, I get it. Like, the friction of getting that GSA contract is valuable. Right. This company wanted to charge me like, 7, 500 bucks, but they guaranteed that I would make that back over five years. And like this, which I thought was just it. I'll talk to him again and get more details. I don't think we'll head down that path, but, yeah. Because I just can be it.

But, yeah, I know that it can't once you get it. I mean, I had. I had a colleague that had jumped through the hoops and everything else, and it was actually. He got a call from an agency. I think it was related to NASA.

Okay.

That was like, hey, we want to buy from you, but we. We need this product you have, so we can you go through the, you know, jump through the hoops and get approved and we'll. We'll work with you on this contract. Yeah, but once he had it, you know, he was selling. He was in the Mac business, but he was selling xserve, which is. Yeah, this Macintosh server that's no longer made, selling parts and components. And he. He serviced that contract probably for a decade. And it was wildly profitable because, you know, as those parts got cheaper and cheaper over time, they still needed them. They paid top dollar. So it was. I think, definitely can work out. But if you have some information on GSA stuff and like to share it. Feedbackusbrain show and like Dave said, if we feature your email, your comment, your question. We're giving away a MacBook Air this.

Year, so, yeah, you get into that drawing. All right, so social capital, this is. We started talking about this in the last episode, and we were talking about trade shows. That is a place to both build and spend social capital, I suppose.

Definitely. I got to thinking about this because you shared a story with me about a developer that had some problems with an app store and couldn't get a solid answer. It's like trying to get an answer out of one of these huge companies can be extremely difficult. And he used his social capital and kind of moved up the ladder of people until he finally was able to connect with someone that would help him get an an and ultimately solve or kind of solve the problem that. That they were having. And. And I thought it's definitely worth talking because social capital is extremely valuable, whether you're giving it or getting it.

Yes.

Love to jump into it today. Right.

Yeah. It was a. It was an interesting story that this guy Evan Rosenfield told Rosenfeld. Sorry, Evan. Mr. On Twitter. We'll put a link in the show. Notes at BusinessBrain show.

He.

Yeah, he had an app that was just removed for no reason that he could understand and they wouldn't talk with him. And he went through a lot of things before he started spending his social capital. Right. Like he crashed a 10 year old's birthday party to speak to the girl's father who was a VP at Apple, but he couldn't find anybody. And then finally he decided to. To, he says, and he used the term social capital. He says he was at the end of his rope and he asked the most connected person he knew in Silicon Valley for help. And that person brought in the most connected angel investor they knew. And an hour later, a senior manager from the Apple App Store called this guy and talked to him about it and they found out that this was all for like, it was, it was, people were, I guess people were buying his app with invalid credit cards to kill his reputation on the App Store. I mean, what a terrible thing. Yeah.

Never heard of a thing like that.

No. But you'd think if Apple saw that, they would know. Okay. There's one of several reasons why this is happening. But I digress, right? They didn't. They just assume the worst and, you know, canceled this guy until he, you know, basically had somebody call Tim Cook. It sounds like. Yeah, that's right, you know. Yeah, yeah, yeah.

And like in my definition, you know, the way you're, you, you use this capital when you need it, it starts many, many, many, many years in advance. You, you're the. I define it as these relationships that you have added value to over time.

Right.

And as you add value to these relationships, you, you kind of get a deposit in your quote bank, if you will. And you know, it's not something that you can fake and go out there to do it. And it's not something that you can expect a return on right away. It really has to be authentic, Right?

Yeah.

You really have to want to help others. Like, you know, if someone asks for your help or if you see someone that needs help, you know you're going to get a payoff later on. It's the more value that you add to people's lives or their businesses, whatever, the more you're going to get back over time. It's kind of this, it's a system which we talk about system all the time.

And I would say, you know, I'm thinking about last week because for me, CES and any conference or, or event like that is an event where Social capital is built and exchanged. Right. And I, I wound up using a little bit of social capital a little bit last week. I don't know if the person with whom I used it thinks of it this way, but I, I certainly do. And I treat it like that, that JBL Harmon, the Speaker sound company, puts on a con, a concert every year in Las Vegas. And I've seen the Foo Fighters there. This is a thousand person event. It's in a 2,000 person venue, which makes it nice and roomy and no bathroom lines and any of that, but free food, free drinks. And like I said, I've seen the Foo Fighters, Elton John, Sting, Linkin park played one year, Kiss played. Right. Yeah, it's right. And this year Def Leppard played and I had both of my co hosts from Matt Geekab with me, John and Pete. And so I asked if, if it was possible to get extra tickets. I've never been able to get extra tickets for this thing before. I've only ever gotten the one for Dave. And even some years, even that was questionable. But I asked and it turned out, day of the event, I got a text, they said, yep, we've got two extra tickets for you. Bring them down, you're good to go. Right. So I don't know if they think I spent social capital that day, but I do.

Yes.

And therefore I am always working on depositing social capital. And I mean, quite frankly, I can consider what we do with this show and my other shows a piece of that. We're offering as much as we can out into the world. It's not social capital specifically with any given person. So it's probably, you know, it's, I don't, I don't mean to diminish what we do, but it's, you know, lower stakes social capital. Yep.

Yeah. He's not, not a personal, direct relationship. You're helping someone, but in it, from a generic or general standpoint. Yeah, we'd hope that.

Yeah, you'd hope. Right. But it's, but it's. But like to me, making it a habit to help people is a way to sort of set that system in place where you're always working to build social capital, other than those moments where you have to sort of change course and, and, and, you know, ask to spend some social capital because it makes it obvious to the person that when you finally do ask them for something and you're spending some of that social capital, they know you as a person that is always contributing social capital. Right. So if you're always Asking for stuff, it's much more difficult to. I mean, maybe it's easier because you're just asking for stuff, but it's more difficult to get those things that are important to you. It's the crying wolf thing, right? You know, be careful when you choose to. To reach out for these things. But even as simple as please and thank you. I know we just had the kindergarten episode, but being polite to people is, again, I consider it a low stakes way of contributing social capital. I make people at least comfortable around me, if not feel good when I say please and thank you and I'm polite to them. And that helps when you have to say, hey, is there a favor I can ask for? You know, if you're a jerk all the time, if you never say please and thank you doesn't work. Right. So.

And I. I totally agree. I think that mindset of, you know, like we talked about the kindergarten episode is really important. The other please and thank you. Thinking about this phrase, how can I help? Hey, if there's anything I can help you with, please let me know. Just reach out. I'd be glad to help you any way I can.

Yes.

Just letting people know, how can I help? I tell my kids, I'm like, those four words are just huge. And just use it all the time. How can I help? And I've had some meetings with people that I didn't really know very well, but they ended it. So I really started to pick up on this is at the end of the meeting, it's like, hey, if there's anything I can do to help, you know, anytime, let me know. Here's my card. You need a referral, this or that. And I think it's just a great comment to make, but you have to mean it, right?

You have to be ready for someone to call you and ask for that. That's right.

Yes.

But what a great. I love this phrase. I got to start using this phrase more. I'm always happy to help people, but I don't offer that phrase. That's not part of my default lexicon. And I want it to be. I was gonna say it should be. I don't like the word should. I also don't like the word hate, which I almost said as well. So I got a lot to work on here, but it's something I want to make part of my lexicon because I mean it. I do like to help people. I'm generally happy to help. I mean, there's those scenarios where it's like, oh, man, what did I get myself into. But what a great way to open the door to allow someone to ask you to build some social capital. You ask, how can I help? They might have something they want your help with, but they weren't going to ask for it. And now you've made it that much easier. Right. How can I help?

Yep, yep. And let me, let me then put another twist on it. When you do help and you do help someone, there's a very important phrase and it's a very persuasive phrase to.

Is this something from the Godfather?

No, sorry. It might be.

The day will come, you know.

Yes, you will. I may come on you.

That's right.

Call on you, call on you. So, but when you have that conversation and someone's thanking you for helping them, right, You've done something, it's very important for you to respond with something along the lines of, I, hey, I'm glad to help and I know you will help me in return in the future when I need, when I need something. And it's not. You're not saying, I know you would, it's, oh, I know you will. I know you'll be there for me in the future as well. We gotta help each other.

No, that's right. Like if somebody says, oh, thank you so much, you really helped me, I'm happy to help. I know you do the same for me. Right. You know, you can say it in a very disarming way. Yep.

Yes.

Yep.

And, and one of the, the biggest way that I've built social capital in, in my business career, even by personal life, is being positive, being optimistic and understanding that when you walk into a room, you, you have the opportunity to lift people up or, or to bring them down. Right. Whether they're, they're partners, employees, it's a party. Whatever it is, positivity is rewarded. It attracts people to you, it attracts success. Being positive is huge. And I'll give you a good example. At one time, one of my businesses, we ship things all over the country, all over the world, and everything was like overnight. So my freight bills were super expensive. We were spending 200,000, $250,000 a month with FedEx, UPS, this kind of thing. And even though that's a lot of money for their high end events, it's pretty small. So. But I built this relationship with their, their group here in the Bay Area and I helped them. They asked me to help another customer and kind of get things going the way we had done it. And I did some things for them, but I was Always glad to see him. Hey, guys, great talk. Go to lunch. And, and it just seemed like they hung around a lot. And one day I was just like, hey, I, I hear you guys, you know, have this event coming up and I'd love to go if you ever have an opportunity. And I didn't happen that year. But the next year I got a call and said, hey, we're, we're taking you and your, your wife to the Orange bowl in Florida. And this was FedEx and we're going to fly you out and put you up at the Durrell and we're going to go do this event. It was like a whole week event.

That they had there. That's amazing.

It was awesome. And when I got there, some of the people that I was talking to, I re. This is how I realized how tiny we really were. It was like, I'm sitting next to the procurement officer for, like, General Motors and another guy, like, from the NFL that did all stuff. And I'm thinking, how did we get here? And so I asked the guy, I said, well, how do. I asked him how to get her? And he goes, well, first off, I'll never be able to get you here again. I was like, okay, that's fine. But he goes, he goes, you know, we've really enjoyed hanging out with you. You pushed new ideas on us and you're always positive and you don't call us with complaints. You call us with solutions and positive stuff. So we thought, hey, after a couple of years, let's reward this guy and send us to our premier event or whatever. So being positive, man, even in the face of when you have a problem and you're really pissed off at FedEx for screwing up or UPS or whoever, turning that when they make a mistake. I've said this before, but for new listeners, when a vendor or someone makes a mistake, it's a huge opportunity to earn a lot of social capital with them because you can go, look, let's turn this into a learning moment. Let me tell you how I feel it should have been handled. Your employee did X or didn't do Y. And it's just a great opportunity to just spin it, get on the same side of the table like we talk about all the time, and create a real positive, you know, situation that, that will pay off, will pay off in the future. So positive.

I, I'm always, generally, not always, I have my moments, but I'm, I'm generally a positive person. I think you listeners would, would, would have already figured that out. And I Never really thought about that too much as. As one of the reasons. But, yeah, being that, like you said, offering solutions instead of complaints, being productive and just being. Yeah, like you said, being a positive person. I'm thinking about. I've had the opportunity to meet and even get to know several, you know, quote unquote, very famous people. And every one of those opportunities was something like you just described. The person who introduced me to this other person, you know, to this famous person, was comfortable around me, knew I knew how to carry myself, knew I was positive I wasn't going to be some Debbie Downer and invited me to some event where I had no business being, and then was like, okay, well, now you're here. Once you're in the door of these things, the rest of the famous people, their guard is down because they know that there's a gatekeeper there. And if you're there, you're not gonna be some, you know, whack job off.

The street pulling your camera out.

Yeah.

Yeah.

Can you sign this for me? You know, whatever.

Yeah.

They know that you're just gonna carry yourself like a normal human and treat these other people like normal humans, which is what they actually want most of the time, unless they're, you know, like. Like sociopaths or something. And that's fine, whatever. But. But yeah, that's how. That's how those things work, folks. So. Yeah.

Yes.

Yeah, yeah.

And I have a couple more quick ones before we. We head out on this Friday. One is, you know, recognize your strengths and weaknesses. You know, don't promise what you can't deliver, because then you're going to kind of get egg on your face and look. Look bad. That's not a good way to build social capital. So it's okay if someone asks you for something to say, oh, wow, I don't know anything about that, or I'm not able to help you with that, or perhaps you can refer them to someone else and that could help as well.

That's the key. Be the networker. Right. Connecting other people is a fantastic way to build social capital. I know my friend Mike Dunn, who I don't know where he is now. He used to lead the investment, the M and A arm over at Hearst Media, and he's the one who convinced me to start doing podcasting years and years ago. But he is a master networker. He's got a lot of talents, and that's one of them, and it's huge. It's been great for him in addition to everything else he can do. Yeah.

Yeah, that's really cool. And then one of the last ones is being reliable. If you're reliable in what you do every single day, you naturally are going to build social capital. It just happens because people come, they just their framework and their view of you as a person has that anchor that you're reliable. When they ask for help, when they, you know, this kind of thing, you're, you're going to be there and you're not going to say, you're not going to, you know, say something that you're not going to follow up with and, but reliability, that positivity. And I have one more. But I want you to. I'm going to get it to you in a different way. So I really love this. There's a technique that. And it's the compliment sandwich. And I'd be glad to share the ingredients of that compliment sandwich to anyone that wants to send an email to feedbackusinessbrain Show. I'll give you some tips on how I've used it to build social capital and build up people in a positive manner that work for you and actually even in your personal life. So if you want to learn that, send in a message and if we talk about it on the show, you get entered to win a MacBook.

There you go. That's FeedbackusinessBrain show, folks. And yeah, if whatever you send in, if you get featured on the show, well, you get entered to win that MacBook Air 2023. It's the year of the air, Sharon.

I like that.

Keep living that charm life.

Yeah.

Have a good weekend. See you next week.