Ask Ralph: The Big Trend In Networking Is Influential and Niche

This article originally appeared on Inc.com where I regularly write on entrepreneurship, leadership, management and related business issues. 

Networking options have proliferated and social media platforms have democratized making connections, however, the success of your product or service may come from networking exclusively with less.

Ralph Lauren leapt on a more than fashionable trend when debuting his Spring 2016 collection. No, not the crisp whites or return to classic tan leathers or even his homage to chic sailing life. Rather, it was the unveiling of his new private members' club that is the trend to watch. Not surprisingly, Ralph's invite-only members' club is for his wealthiest clients. Spendmership has its benefits: members receive the predictable perk of previews of new collections, but also have access to a palazzo in the center of Milan, invitations to private events and yes, coveted reservations to Ralph Lauren restaurants.

Creation of a private club is a strategic business decision, banking on future growth opportunities. The fear of networking is indiscriminate as to social ranking and title. Combine that fear with universal and apparently equal access to products and services 24/7 and what happens? The customers you value most, withdraw or even evaporate. And Ralph is not alone is realizing the profit potential in addressing this human condition.

Recognizing that top business executives as much as anyone else wanted a warm introduction in an off-the-record, structured but not so formal environment, caused best-selling author (and former executive recruiter) Rick Smith to launch World 50 back in 2004. World 50 has been dubbed one of the "world's most influential networking groups" (sorry Ralph) as membership was restricted to the C-suite of global companies. The sole purpose of World 50 organization was to initiate and facilitate business conversations through private peer membership--and make a profit while World 50 members shared insights on strategic leadership issues. The annual membership fee for World 50 was reportedly $50,000.

Patricia Lizarraga is the Managing Partner at Hypatia Capital Group, a New York City based private equity fund focused exclusively on sponsoring female CEOs. Networking and sponsoring female CEOs is deal-flow for Hypatia (the fund launched in 2007). Several times a year, Hypatia conducts a one-day closed-door Private Equity Roadmap Seminar for qualified attendees interested in exploring a private equity portfolio company CEO role. Hypatia is hyper-focused on who gets into this seminar room. Invitations are extended only to CEO-level executives who have:

• Successful P&L responsibility of a $100+ million operation
• Acquisition or divestiture experience
• CEO ambition
• Interest in performance based compensation

Now, 8 years after the first Private Equity Roadmap Seminar and on the strength of a proprietary network of top female executives, Hypatia has formally launched a membership network. Not ready for the C-suite types and/or social butterflies need not apply. The Hypatia Capital Network is restricted to qualifying executives (plus private equity partners) and networking within the group remains focused on identifying acquisition opportunities.

So just what are the community takeaways from the smaller, niche is the new big networking trend?

Democratization of networking activities sometimes has its drawbacks. With large, open networking events there is a decision-making tipping point as to whether or not we will attend. Most of us have questioned why we RSVP'd for an event and have debated in our minds until the very last minute whether to actually attend, knowing attendance involves walking into a large room filled with unknowns. Will the value of the interactions or information exchanged out-weigh the uncertainty of not knowing who else is in the room? As one friend said to me years ago on why she rarely attends large, open-to-all networking events: "I don't have time to be the smartest person in the room. Before I RSVP, I check out who else is attending or likely to attend. I need to know I'm in a room with people smarter than me".

Price more often than not is an insufficient barrier to entry. Years ago I was invited to a networking evening hosted by a flash-sale e-commerce site. The event was hosted in a swanky location in midtown Manhattan and the champagne flowed. No expense was spared and only one detail was overlooked - the invitees had nothing to say to each other. Invitations were extended based on one deciding factor (I'm embarrassed to admit this): all were all avid, super-shoppers of the e-commerce site. As a proclivity to spending money in order to grab a heavily discounted designer item was all the group had in common, the networking was rather meaningless (and to my knowledge, the e-commerce site never hosted another similar event).

Recognize in spite of mobile and social platforms that you're still dealing with human beings. We're still tribal in our networking mindset and want trusted introductions to our peers. I recently organized a breakfast for women investors in New York City for the purpose of socializing deal flow. Invitations were extended exclusively to women who are angel investors, venture capitalists and strategic (corporate) investors and are investing in emerging tech startups. These women (whether they could attend or not) enthusiastically responded that this was a group they wanted to meet with. Quite simply, it was a chance to meet industry peers in an environment absent from uncertainty - and random sales pitches.