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Exponential Entrepreneurs

The 97  ›  Partnering and connections

Relational Capital

The point

Solving your problem will frequently be the solution to someone else's bigger problem, who also has the resources you need. You can take advantage of other people's infrastructure, reach, and resources that you couldn't have.

Jay Abraham · Taking Your Business Profits Beyond Exponential — Six-Hour Master Course Cued to 11:36 1 min 52 sec loading…

Why it matters

Relational capital is the account you have been paying into for years and have almost never drawn on. Every client you served properly, every supplier you paid on time when you did not have to, every audience somebody else spent a decade assembling — all of it is capital, and it behaves considerably better than money, because money buys a thing once and a relationship keeps producing.

The premise underneath the whole strategy is this: solving your problem will frequently be the solution to somebody else's bigger problem — and they already hold the resources you need. Somebody, somewhere, has excess production, idle capacity, an audience already built, a sales force nobody is using. Your job is to connect the two.

And the arithmetic changes the moment you stop buying. There are a great many things you cannot afford to do alone — but joint venture them, and pay the other side only in direct proportion to the revenue that actually arrives, and it is no longer a cost at all. It is an income stream.

The fastest withdrawal is a referral, and it is the one almost nobody makes properly, because you cannot draw on capital you have not deposited. Ask before the value has landed and you are asking somebody to lend you their reputation on the strength of a promise.

The mistake almost everyone makes

Asking "do you know anybody who could use this?" It asks the other person to search their entire memory against a criterion so vague that the brain returns nothing. They say they will have a think, and they never think.

The test: did you name one specific person and one specific situation? If the request contained the word anybody, it was a wish said out loud, not a request.

Where it shows up — 8 worked examples

WhoWhat happened
The IRI Gold CompanyStopped buying advertising, became the recommended provider inside roughly 30 financial newsletters; $300,000 to $500 million in two years
The company with 500 retail accountsFeared its two slowing products; the real asset was the retail relationships, and royalties earned many times more
LululemonMade local yoga instructors ambassadors and stores community hubs; relationships carried pricing past $10 billion
GlossierLaunched through an online community that co-designed the products, instead of fighting for shelf space
TargetBorrowed prestige rather than building it — the Missoni launch sold out and crashed the website
Red VenturesBought the decision platforms rather than renting them — Bankrate at roughly $1.4 billion, CNET at roughly $500 million
HubSpot and The HustleAcquired a trusted daily relationship with the entrepreneurs it wanted as future buyers, upstream of the sale
Displaced revenue executivesPaid for warm introductions to former clients during layoffs — decades of relationships bought in weeks

What it solves

The words a business owner uses for this before anybody has told them the name of it. If one of these is a sentence you have said out loud, this is your strategy.

  • Paying to build what somebody already owns“Every new client costs more than the last one, and we are still starting from zero with every single one.”Access to buyers who already trust somebody else, reached on that person's endorsement and paid for out of the revenue it produces.
  • Trusted and never once banked“Our clients genuinely love us and I have never asked them for anything in my life.”The specific ask that converts goodwill into introductions, without spending the goodwill.
  • The ask that goes nowhere“We ask for referrals, people say they will have a think, and that is the end of it.”A named request — a person, a situation, a next step — replacing the word 'anybody', which is what makes referrals arrive in bursts and never on demand.
  • Cannot fund the obvious move“I know exactly what we should build next and we cannot pay for it.”The structure that rents the outcome you cannot afford to build, and pays in proportion to what it produces.
  • A market we cannot get into“The buyers we want are already loyal to somebody else.”A route in through the company that already holds the relationship, rather than a campaign aimed at somebody else's loyal buyer.
  • Advisor multiplier“My clients know everybody worth knowing in their industry and none of it is producing anything.”A way to turn a client's own network — which they discount entirely — into the cheapest growth channel they have.

The challenge

Find the ones for whom it already worked

Go through your clients and mark the ones for whom the value has visibly landed — not the ones who paid recently, the ones for whom it worked and who know it worked. For three of them, find a specific person they have mentioned in passing, and ask about that person by name and situation. Then tell them exactly what you would do with the introduction.

How you will know it is done Three named asks made — a person, a situation, and what happens next. Report all three to your pod at the end of the seven days, including the declines.

The AI layer · second pass

Once this is working, here is what to multiply

Improve the system first. Then multiply it. This panel is the second run at the strategy above, and it is deliberately useless until the first run is done.

Before you point anything at this You have solved a problem for another business first, before ever asking them for their list.
What it multiplies Mapping who else your clients buy from before, during, after and instead of you, ranking each by the idle capacity or built audience it is sitting on.
The trap Generating four hundred partnership approaches to people you have never done a thing for. Relational capital is an account, and a machine can only draw on it. It cannot make the deposit, and volume of asking is how you overdraw a reputation you spent years funding.