Published in the San Diego Union-Tribune, November 2, 2020
This week I had a powerful he/she/they epiphany. I am not referring to LGBTQ gender pronouns per se, but rather to the puzzle of external validation. Allow me to amplify.
A client comes in for a chit chat. He is from Canada, and in Toronto he is the real deal. He knows everyone from the prime minister to the guy who makes bagels in the Jewish part of town. He is what is commonly referred to as a “mover and shaker.” Then he moves to San Diego with his bride and children, because San Diego has better weather than Toronto, and he wants to stay married. So far, this is a simple tale, because many people in San Diego are from somewhere else.
My client is in the finance business, tax, accounting and in particular, corporate maneuvering. Maneuvering is a term of art, but his execution of same is both legal and obscure. Now comes the dilemma. He tells me that in Toronto, when he goes to a meeting, there is usually a “he” in the room, another person who vouches for him, who knows the charming billionaire across the table and tells him that in fact, my client is a good guy and can do the job. The network effect is powerful and is a requirement. My client needs the imprimatur of someone else, trusted in the buyer’s network, in order to have a chance to make the deal.
This is because Canadians are more risk-averse than we are, and they depend much more on the credibility of their network. They operate on a level of trust that trumps litigation. If you want to get a deal done, you need an introduction and a level of assurance, provided by someone other than you.
Look, I have been a software CEO multiple times. I understand network effects. But this story struck me for the reason that I would like to believe that one key characteristic of the San Diego technology ecosystem is that it honors the idea that the scientist, the entrepreneur, the inventor can succeed without the barrier of a he/she/they introduction. But the truth is, I am wrong.
The open secret is that to get the meeting, to get the deal done, you still need someone to open the door and do some vouching. That is why LinkedIn has a market capitalization of $30 billion. I want to believe in a level playing field, I want to believe that the good old boy network is dead or dying, and that our door is always open to an unknown who can change the world. But it is not, and I know that I do the same thing my client does. I look for a warm introduction (this is page one in every venture capitalist playbook), I need to find a guy who knows a guy who knows the guy I need to know — he/she or they.
The dark sentence is that those barriers still exist (exponentially for women and entrepreneurs of color). Our high-tech and biotech companies need to remember that not every good idea comes with an engraved invitation from a former dinner companion. We all need to take our network and use it to expand the pool. Remember it is Metcalfe’s Law that says the power of the network is proportional to the square of the number of connected users.
And now in honor of tomorrow, which is one of those days that rolls around every four years, some thoughts:
“Don’t stop thinking about tomorrow.” — Fleetwood Mac
“The sun’ll come out tomorrow.” — Charles Strouse, “Annie”
“Tomorrow is a new day.” — Ralph Waldo Emerson
“Learn from yesterday…hope for tomorrow.” — Albert Einstein
“Tomorrow is a Long Time.” — Bob Dylan
“Cry Today, Smile Tomorrow.” — Lady Gaga
“Tomorrow is the most important thing in life.” — John Wayne
“Tomorrow it’ll all be over.” — Johnny Depp
“Get up tomorrow early in the morning…” — Joan of Arc