When discussing funding, especially in the business and startup world, most people think about financial capital. However, there is another crucial type of capital that businesses and startups should consider: social capital.
Social capital does not have a precise definition but is fundamentally understood as networks built on trust between individuals, allowing for mutual support and cooperation in achieving shared goals.
Vietnam's startup market is emerging, with significant potential for rapid growth. However, to survive and thrive in this competitive environment, leveraging and building social capital is essential. Social capital not only helps startups establish and maintain important relationships but also provides the necessary information, resources, and support to overcome challenges, drive innovation, and achieve sustainable growth. Social capital can be viewed from two perspectives:
- Internal Social Capital: This is reflected in the cooperation, support, trust, and sharing of knowledge and experiences among team members, improving internal communication. This is crucial for businesses to confidently innovate their operations and embrace risks to achieve their objectives.
- External Social Capital: Well-established vertical relationships (with government levels) and horizontal relationships (with consulting organizations and strategic partners) provide valuable information and advice. This enables businesses to be proactive, innovate, and take on risks in a competitive environment without fearing adverse situations.
Building social capital involves maintaining and nurturing relationships over time to enhance mutual trust. Here are some ways to build and expand these networks:
- Maintaining Existing Relationships: Before expanding their network, founders should focus on nurturing and maintaining existing relationships. Building trust and positive interactions with these contacts makes them valuable resources for personal and professional development. People prefer to collaborate with those they trust and feel comfortable with, making a founder's network stronger through deep, lasting relationships.
- Attending Industry Events and Workshops: Founders can exchange experiences, share information, and seek collaboration opportunities in their business fields at these events. Business networking conferences also provide valuable opportunities for managers, experts, and researchers to access the latest ideas and innovations, helping startups expand their networks, find business opportunities, and stay informed about changing business environments.
- Participating in Courses and Training Programs: TThese are great opportunities to expand a founder’s network. In these sessions, they can connect and exchange with instructors and fellow participants. Engaging actively in discussions and sharing ideas and knowledge with peers is crucial. Collaborative group work or projects can help build good relationships with other members. After the course, founders can stay connected with instructors and peers through social networks or forums related to the course topic to continue developing these relationships.
For businesses, particularly startups, initiating the cultivation of social capital early on with a long-term outlook is pivotal. Emphasizing quality networks over mere quantity and leveraging this capital to generate value for oneself and the community is essential. While social capital may not possess tangible financial attributes, its transformation into financial benefits often proves feasible.
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