The Warm Calculus of Social Capital

In defense of my value and values.

Social capital often feels like a nebulous concept - tricky to define and even tougher to quantify. The creatively aligned find themselves inundated with requests and 'opportunities' that promise exposure or future upside, but demand significant investments of time and resources in the present. Without a clear framework for evaluating these propositions, it's all too easy to overextend and end up with an imbalanced value equation.

The truth is, everyone is creative in the right context, in the business context we call them ‘innovators’. But innovation is highly situational, and effectively leveraging social capital requires a keen understanding of which situations warrant investment. Just as that enterprising college student found a clever way to harness the reach of ESPN for some extra beer money, founders must learn to spot the opportunities that align with their strategic goals.

No Mo FOMO

The siren song of FOMO lures founders into trying to be everything to everyone. Seduced by vague promises of 'exposure' or 'synergy', they fragment their focus and dilute their impact. But the most successful leaders understand that true value creation springs from intentional, focused effort. They have the discipline to say no to distractions, and the discernment to double down on the relationships and projects that really move the needle.

The words "‘cold’ and ‘calculating’ are often coupled, as if one implies the other. But to be social is to be implicitly ‘warm’, so can social capital be calculated? Or does the act of calculating “cool down” said warmth leading to a purely transactional relationship? I don’t believe it does. But the abstract nature of social capital does make the value much more subjective and requires extra delicacy in managing.

I was having dinner with some friends a few days ago and I proceeded to subject them to a rant about how a fellow founder had been reaching out to me repeatedly over the past months want to discuss how our two companies could “partner”. My complaint was that this person’s definition of ‘partnership’ did not match my own.

On at least a monthly basis they were asking me to do things that meaningfully contributes to their business’ revenue. I consistently did as they had asked and the only thing I had asked in return was that they make an account on our mobile app and use to get an understanding of what our business did so they would have more context the next time that we discussed “partnering”.

After what had been 4 months, in came yet another ask for help with their interests. I frustratedly pointed out to them that they had not done the one small task that I had asked of them and yet were once again asking me for something…the equation had become completely out of balance. My friends told me that I was being unreasonable, and that I shouldn’t expect others to have the same definition of what partnership means to me.

Cultivating Intentional Relationships

But I disagree, that is the precisely the standard to which we should hold others, because if people and organizations are not elevating presences in your life, then they are likely limiting or worse bringing you down. The hustlebros of the world will throw phrases out like “Your network is your net worth” and “Show me who you hang out with and I will tell you who you are.” but I think that is too reductive. I prefer the way Mark Manson articulates it:

Your relationship with others is a direct reflection of your relationship with yourself. If you treat yourself poorly, then you will also unconsciously seek out and tolerate others who treat you poorly. If you treat yourself with dignity and respect, then you will only tolerate others who treat you with dignity and respect.

There is a single word in there that I think is just so valuable: tolerate. One can still simultaneously be warm AND calculating. The key is to have sense of tolerance relative to your counterparty. Do not fall into the trap of mapping out exactly what you expect in return for any action, that’s when you have regressed into being cold…simply contractual.

I am not in the business of “naming and shaming”, that never does anything but piss the person off and make others uncomfortable. I’ve never seen an instance where even when the “named” is objectively guilty that they acknowledge it and work to correct the issue after being publicly named. Rather I find it much more effective to point out what does work.

Time to Sw!tch?

There is a book a book that I revisit at least once a year: Sw!tch: How to Change When Change is Hard by Dan & Chip Heath. I consider it a seminal work on Change Management and I recommend/gift it frequently. One of the biggest lessons of the book is that rather than trying to isolate and eliminate things that don’t work, leading to an endless cycle of “whack-a-mole” futility…the most impactful change is implemented through "duplicating the bright spots”, that is to identify anomalous good outcomes, diagnose how they happened and replicate where ever possible.

In a chapter on malnutrition in Vietnam, the authors recount the transformative efforts of Jerry Sternin, who was tasked with addressing severe childhood malnutrition in rural Vietnam in the early 1990s. Faced with a daunting challenge—where nearly half of the children were malnourished due to factors like poverty, poor sanitation, and lack of education—Sternin recognized that conventional approaches would be ineffective within his limited six-month timeframe. Instead of attempting to tackle these overwhelming systemic issues, which he termed "True but Useless" (TBUs), he sought to identify bright spots—successful examples within the community that could serve as models for change. I will probably do another entry on TBUs very soon.

Sternin focused on local mothers who were successfully raising well-nourished children despite similar socioeconomic constraints. Through careful observation and engagement, he discovered key differences in their feeding practices. These mothers fed their children smaller meals more frequently and incorporated nutrient-rich foods like shrimp and crabs into their diets, which were often overlooked as "low class" options. This approach highlighted that malnutrition was not an inevitable outcome of poverty; rather, effective strategies existed within the community.

To disseminate these successful practices, Sternin implemented a mother-to-mother communication program where groups of malnourished families would gather to prepare meals together. This hands-on approach not only fostered practical skills but also built community support and trust. Within six months, this initiative led to a remarkable 65% improvement in nutritional status among children in the participating families. The program ultimately expanded to reach over 2.2 million people across 265 villages, demonstrating that small, community-driven solutions could lead to significant and lasting change.

The chapter emphasizes the importance of identifying and replicating successful behaviors rather than getting bogged down by the scale of complex problems. By focusing on bright spots, Sternin's work serves as a powerful example of how grassroots initiatives can effectively combat large-scale issues like malnutrition.

Keep on Shining

So let’s look at few bright spots from my life and career. First up is “Flip” this is someone that I consider a good friend, despite the fact we have never met in person. We bonded while we were colleagues despite being almost literally on the other side of the planet from one another. I was sharing with them the topic of this article and they had this to say: “RE: Warm Calculus, the best is where there are zero expectations and you simply exchange because it’s fun and feels nice to be of service.” I could not agree more. In an ideal world a rising tide lifts all ships.

But as Warren Buffet said: "A rising tide floats all boats….. only when the tide goes out do you discover who's been swimming naked." You don’t want to be out at sea when you find out that, you are the only one wearing swim clothes.

One of the best examples I can point to is someone that I met early in my entrepreneurial journey. I sat down to pitch to him our business. He listened attentively and when I was done he simply said: “I have no idea what the fuck you are doing.” I am not paraphrasing, he said those exact words. I’ve had variations on the same thing many times so I thought I knew what to expect next. I was waiting for the usual barrage of suggestions around what I should be doing instead. That is not what I got, instead he proceeded to ask a bunch of clarifying questions on our business, how the idea came to us, and where we see it going.

The conversation ended with him telling me he didn’t see a way for us to work together but that we should stay in touch. In a gesture of good will and appreciation for his time, I had a case of cider from Neon Ciders (a brewery I co-founded) sent to his office and thought that to be the end of it. But fate had better ideas for us both, a couple of months later, a friend posted to our group chat that someone’s debit card was taped to a light pole in Hong Kong. I recognized the surname to be his and reached out to ask if it was someone he knew…and he did. It was his son’s debit card. I had my friend grab it and we got the card back to the young man.

This series of events led to us catching up again and probably through a combination of me getting better at pitching, our product evolving, and their business changing. We found some common ground to start building a meaningful relationship. He generously offered for my cofounder and I to use a couple of desks in their office which is located in a very good spot to dash in and out to meet people in our industry.

But he foresaw more in that relationship, he saw the opportunity for knowledge transfer, and that happened almost immediately. We have since gone on to see that evolve into a meaningful collaboration that has driven real commerce for each of our businesses. Never perfectly balanced, but I cannot emphasize this enough: trying to balance your social capital is never the goal. Understanding your tolerance for imbalance is however.

Indicators of Imbalance

With that in mind, here are some reasonable guidelines for avoiding letting the power differential of your relationships slip to far out of balance.

1. Speak up! - This is #1 for a reason, most people are not malicious, just unaware. The sooner that you point out they haven’t done what you have asked the faster they will do it, and you wont reach a level of imbalance that you get frustrated like I did with the first example.

2. Listen for indicators - If a counterparty is doing alot of telling and not much asking, then they are not trying to understand your goals. Social media has turned everyone into know-it-alls or what I like to call “shallow divers” we are all too quick to conflate a superficial understanding of subjects into genuine understanding of the complexities of pretty much everything…The era of 280 characters and 90 second vignettes, there is not alot of room for nuance. This is the single biggest indicator of imbalance and it presents itself very early in relationship.

3. The unsaid also tells you alot - If a counterparty is not talking about how they will help you, it is because they probably haven’t even thought about it. “Partnership” and “community” are two words that have been overused to the point of meaninglessness because they are such fuzzy concepts. They both imply a relatively balanced value proposition from all parties. But there is nothing ‘common’ about value extraction.

4. Embrace the "give first" mentality - The most fruitful relationships often begin with generosity. Look for opportunities to add value to others without expecting anything in return. This could be as simple as making a thoughtful introduction or sharing a relevant resource. Over time, these small acts of kindness compound into a reservoir of goodwill that you can draw upon when you need support. Simply put: Be like Flip.

5. Cultivate a diverse network - Just as a healthy investment portfolio includes a mix of assets, a robust social network should include people from different industries, backgrounds, and perspectives. This diversity exposes you to fresh ideas and unexpected opportunities. Actively seek out connections beyond your immediate circle, and be open to serendipitous encounters.

6. Invest in your own growth - Ultimately, the value you bring to your network is a reflection of the value you've cultivated within yourself. Make a consistent effort to expand your knowledge, sharpen your skills, and gain new experiences. The more you grow as an individual, the more you'll have to offer in your relationships.

7. Master the art of the graceful "no" - As your social capital grows, so will the demands on your time and attention. Learning to decline requests with tact and empathy is crucial for maintaining balance and focus. Be transparent about your priorities and constraints, and whenever possible, offer an alternative way to be helpful that aligns with your capacity.
   This is especially true when it comes to events and public speaking opportunities, diverting precious energy away from your core priorities. It's all too easy to get caught up in the ego boost of being seen as an expert or thought leader.

   But as a seasoned speaker, I can tell you, crafting a truly impactful talk requires significant preparation and practice. If you're not selective about which invitations you accept, you risk spreading yourself too thin and delivering subpar performances that diminish your credibility.

   Moreover, not every event or audience will be the right fit for your message and expertise. Saying yes to misaligned opportunities can lead to frustration on both sides, as you struggle to connect with listeners who aren't primed to receive your insights. Instead, be intentional about choosing speaking engagements that align with your core mission and values. Look for events where you can add genuine value to the conversation and forge meaningful connections with like-minded individuals.

   When declining an invitation, express gratitude for the opportunity and briefly explain your reasoning. If possible, suggest an alternative speaker from your network who might be a better fit, or offer to contribute in a less time-intensive way, such as writing a blog post or participating in a short interview.

Ultimately, the true value of social capital reveals itself over time. By consistently showing up with the right combination insight and generosity, you build a reputation as someone worth investing in. And that reputational capital compounds into ever-greater opportunities to make a dent in the universe.

So while the warm calculus of social capital may never be an exact science, you can hone your intuition with practice. By staying anchored to your north star and carefully stewarding your most precious resource - your time and attention - you can crack the code of turning nebulous potential energy into game-changing kinetic force.