quarta-feira, 29 de agosto de 2007

Network Formulas

1.2. The Network of John x Network of Mary

Simple Formula of Networking: My Net X Your Net

Bob Metcalfe, inventor of the Ethernet, is known for pointing out that the total value of a communications network grows with the square of the number of devices or people it connects. (Metcalfe's square law ) This rule applied to telephone companies as they extended the number of subscribers to the telephone network, and now applies to the Internet in the same way. The global interconnection of networks we call the Internet has created huge and increasing value to all its participants.

The mean number of connections on LinkedIn is 5.

Three people with five connections make a network of 125 possible pathways.

5 x 5 x 5 = 125 (Metcalfe's Law)

David Read has identified another factor, the ability of people to choose the groups they belong to, and that people with similar interests will choose join similar groups. Read's Law applies to group forming behaviors in some networks. A group forming network has functionality that directly enables and supports affiliations (such as interest groups, clubs, meetings, communities) among subsets of its customers. Group tools and technologies (also called community tools) such as user-defined mailing lists, chat rooms, discussion groups, buddy lists, team rooms, trading rooms, user groups, market makers, and auction hosts, allow small or large groups of network users to coalesce and to organize their communications around a common interest, issue, or goal.

5 x 5 x 5 = 125+ a group forming value multiplier (Read's Law)

When we establish personal and professional relationships in LinkedIn, we are in the reality establishing a relationship between our network of contacts and the network of contacts of the potential partner. Obviously how well that network will be used will depend on factors such as the establishment of confidence, frequency of communication, experience of useful outcomes and cases of successful collaboration between the partners.

The relationship is not limited barely to that person specifically. The connection is much broader. Linking not only the individuals, but also the groups those individuals have joined, making the flow of information through the network possible.

The size of the group forming value multiplier depends quality, duration, confidence and reputation of members, and this value is consolidated through diverse experience of useful collaboration between the members.

Depending on the interests and needs of group members, is possible to discuss experiences with a newcomer and accelerate the relationship with that person since we already share group membership. Membership has expectation and responsibilities attached. To some extent these “rules” are made explicit by written statements, but far more powerful is the unwritten social expectation that all group members will offer support for each other. This is usually defined as being helpful to others where you can and “paying forward” meaning that you offer help not expecting anything in return, but believing that what goes around comes around. If you create positive results for others that effect will be experienced by those directly involved, that connection will be strengthened and the whole network will enhanced.

Using the force, quality and experience of that connectivity, we be able to mutually work like a catalyst or an accelerator of business inside ours respective networks. It is so important to understand the existence of the wider network behind each simple contact.

The mean number of connections on LinkedIn is 5.
If each person here had only 30 connections that would build a much bigger and stronger network. Consider the following networks of 5 people each with only 5 unique connections using Metcalfe's Law.
5 x 5 x 5 x 5 x 5 = 3125 potential pathways

If we have one very well connected person with 3000 unique connections we get:
5 x 5 x 5 x 5 x 3000 = 1,875,000 potential pathways

But if we have 5 people with 30 unique connections we get:
30 x 30 x 30 x 30 x 30 = 24,300,000 potential pathways

Notice that we have unique connections in this example. The more your network has connections that are not common to other people in the network the more value you bring to the system. So we have three principles to consider. Metcalfe's Law, the raw number of unique connections. Read's Law the quality of the connections is improved by group forming choices. Finally the way people choose to engage in the network, their willingness to pay it forward, and their willingness to develop new relationships.

Small World Theory

In fiction Hungarian writer Frigyes Karinthy (1929) and playwrite John Guare (1992) have suggested that the essential linkages between you and any other person in the world is a small number rather than a large one. Six degrees of separation is suggested. There have been attempts to build a mathematical and experimental proof of this idea, notably by American sociologist Stanley Milgram in 1967 and recently (2001) using email by Duncan Watts at Columbia University. There is quite a lot of evidence supporting the idea that the number of connections is indeed a small number like 5 or 7 and not a big number like 50 or 100.

If you have built your online connections in social networks like LinkedIn you extend your ability to quickly reach people you may need in the future. LinkedIn allows you to “reach” people within three degrees of yourself. The numbers below illustrate how the number of connections you have extends your total reach across the LinkedIn network.

5 Connections

First degree = 5 Second Degree = 248 Third Degree = 18904

30 Connections

First degree = 30 Second Degree = 1846 Third Degree = 180,908

100 Connections

First degree = 100 Second Degree = 34141 Third Degree = 3,332,000

Conclusion: Each of us can be connected many new people by online networks. We will be capable of reaching a significant population in many cities of the world. Because of the group forming behavior that occurs in these groups, if you are an established member, the people you most need to contact are quite likely already positioned within your reach.

Original by Octavio Pitaluga edited in English by John Veitch

The Importance of the Business Network Management

1.   The Importance of Business Network Management

Basic beginnings

In the vision of the author, four basic beginnings in the Business Network Management exist:

  • Expansion of your own Business Network

  • Network of John x Network of Mary

  • Formula for Wealth

  • Paying Forward

1.1. Expansion of the Business Network

By definition, all professionals, government, business and non-profit organizations in the same country belong to the Business Network. That's true whether or not the leadership is working with that understanding and applying the principles of networking or not.

All of the necessary resources for developing your business are within your reach inside the Business Network. If the business goals cannot not be reached, it is because the organization could not map to the network sufficiently. It's necessary to established an efficient and clear communication in which the relationships can develop and where the principle of paying forwards is understood and honored between the participants.

In a growing globalized economy such as this one, it makes sense to establish global connections, reaching out in a random way following the principle that from a larger number of connections many valuable people with expertise or business knowledge will be discovered.

We see ten good reasons for expand your network randomly:

  1. New job: We never know when we will need quick help for find another position in the market. It is likely that the opportunity we seek is waiting inside our existing network.

  2. Geographical Expansion of the business: The company will need competent and dependable persons to enable the growth of the business.

  3. Building teams: Where do we find those persons? How do we attract, retain and motivate our people?

  4. For new undertakings, partners, investors: who are the best qualified persons to help with my kind of business?

  5. A route can signify no route: On several occasions, if I had only a single route to someone I can't be sure that I can reach person I'm seeking. My access to that individual is blocked unless those who can link me to that person decide to act like catalysts and open the way. This may be so even if the reason for contact is advantageous to both parties.

  6. Geographical Change: Professionals today have a tendency to relocate more and more as careers develop. It is better to know someone in the neighborhood you are moving into, someone who can guide you around.

  7. Careers and unfortunate relationships: There exist moments when we need a general change in our lives. Who will bear us and will encourage us into a direction that offers a better future? We should be able to find emotional support in our network.

  8. Friends of friends: Remember, the simple connection to anyone is not as important as the extended connection with the friends of his friends.

  9. Future Generations: The connections we develop create a database for our own family to use. If they choose, they can begin to link between our contacts and their friends and reach out to the sons and daughters of those people. They will be able to build on our example and develop a lot business connections more easily and develop those over a longer period.

  10. New friends: Perhaps someone will appear in your network who shares a special understanding with you. One of the things we find most helpful is to share with people who are “like us”.

Original by Octavio Pitaluga edited in English by John Veitch


This blog is confidential. The content is of intellectual property of Octavio Pitaluga with refinement of [Osmar between Zózimo] in the elaboration of the workshop and future book about GRN – Friday Business Nets Management, 22 of June of 2007 Introduction

Facilitator Octavio Pitaluga – CNO of the Net-Bridges

International business coach, certified by the ICC – International Coaching Community, Speaker, Facilitator, Columnist, Entrepreneur and Business Networker. In the corporate world was employed by the Group Tele2 Europe as the Director of Marketing and Sales Europe of the subsidiary one of processing of electronic transaction, 3C Communications S/TO, being responsible for marketing and sales of four business units covering up to 17 Western European countries Worked also in the Harvest Sustenances (Group Cargill) and Kanematsu of Brazil.

I possess an MBA/MBI from the RSM Erasmus University, Holland and specialization in International Commerce by the UFRJ/ECEX. I possess academic knowledge and professional experience in international commerce and in the marketing of technology with international exposition of business in more of 25 countries. I have a prominent presence in the main platforms of networking online with a very broad number of contacts in Brazil and in the outside. Languages: Portuguese, English, Spanish and Japanese (intermediate). Leisure: friends, family, journeys, horses, multi-cultural questions, movies, dances, music and activities in the open air.


This workshop is destined for the executive market in general focused on professionals interested in increase his success upon managing its Nets of Business. We expect the presence of businessmen, executive, enterprising and aware liberal professionals to the opportunities created by the adoption of that unique methodology in Brazil.


  1. To understand the importance of the business network management.

  2. To use tools of networking online for manage business networks.

  3. To know the culture of the networking.

  4. Consider the formation of the Business Networks Management Team.

  5. To align the Network Management activities with the goals of the company

  6. Know the Business Network Management methodology

  7. Elaborate a calendar and plan of action.

Benefits (Expected)

  • To Build dependable partnerships with your own network.

  • To Shorten the cycles of the business.

  • Improve the internal communication and with diverse network bringing efficiency, reduction of costs and quick implementation of the projects.

  • Development of a culture mutual helping that consolidates all the networks.

  • Strengthening of the partnerships of long term.

  • Reduction in the business prospecting cost.

  • Increase of the profit value in each partnership well managed.

  • To Create good environment of work that will facilitate the appeal of talented staff and their retention.

  • Improvement in the planning and international actions.

Methodology of Training

Presentation using power point and flipchart

Open questioning and interaction with the facilitator.

Intense debates with the group and the facilitator


09.00Greeting, Objective, Programming and Benefits Expected

Check in. Presentation of the hearing

09.151)Importance of Business Networks

Basic beginnings, Use of Tools of Networking Online, Network Executive
Pages 4-19

10:30Coffee break

10:45Exercise 1Page 19


11:152)CNO and Tools of Business Network ManagementPages 22-23

11:30Exercise 2Page 23


12:003)Differences between the networksPages 26-28


13:404)Goals, Factors of Success and RisksPages 29-30

14:00Exercise 3Page 30


14:405)Mutual Assistance in Business NetworksPages 33-34

15:00Exercise 4Page 34


15:40Coffee break

16:006)Mapping Business NetworksPages 37-38

16:20Exercise 5Page 38


17:007)Defining the Plan of ActionPages 41-42

17:20Exercise 6Page 42


18:00Final considerations / End Workshop


We have two options upon carrying out these ideas:

(A) individually and

(B) in teams.

If individually, the professional will work as if he is the CNO and would assume all the too Business Network Management positions. The biggest benefit would be have the general vision of the whole network to the detriment of making a big individual effort and without the possibility of training that the team will bring him.

As regards teams, to same would be formed by professionals that are working for the same company at present. The ideal team will be about five persons chosen by the CNO and acting as Agents of the Network that will do the management of the main business network.

Original by Octavio Pitaluga edited in English by John Veitch