Weblike connectivity is the secret of success in many industries where people spend less of their careers in a single organization and more in short-lived, high-intensity relationships. Entertainment is certainly one such field. But this pattern, some predict, will come to typify many or most fields in the years to come.
In such a fluid reality, where virtual organizations form to do projects, then dissolve once the project is complete, the key to success is not whom you have worked for but whom you have worked with—and whom you are still in touch with.
The electronics industry offers a case study in the crucial role of human networks in entrepreneurship. One estimate of the growth in value of the personal computer industry from 1981 to 1990 puts it going from virtually nothing to nearly $100 billion an immense accumulation of wealth spurred by the alliances forged between enterprising technical wizards and equally enterprising venture capitalists.’ Two thirds of high-tech firms were backed by venture capitalists, a breed of investors that has had a symbiotic relationship with America’s high-tech industry since its earliest days, long before banks, let alone financial markets, would invest a penny.
Venture capitalists in Silicon Valley do far more than just spot a promising idea and put money into the start-up—they stay involved with the company they invest in. Their involvement typically includes giving the fledgling company access to the people they know in management, finance, and the high-tech industry itself, and even helping recruit key talent.
For example, just about all of the start-ups funded by the venture capital firm of Kleiner Perkins Caulfield and Byers were sent to them by someone they knew and trusted. John Doerr, a lead partner at the firm, talks about this rich web of relationships this way: “Think of Silicon Valley as an effective system for getting people, projects, and capital together.” Such a system of connections can spawn vast wealth and the absence of such a system can take a dire toll, especially during hard times.
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