In startups, social capital is king. I’ve been seeing more and more people increasing their social capital by being nice, but not necessarily by being good. I agree that anyone in business should be nice, but I don’t see that as the factor that moves someone up. I think that is the factor that qualifies someone to play the game in the first place.

For example, let’s look at venture capital. VC is an industry that is hard to enter, and once someone does break in, no one knows if they are actually good until a decade later. This is the perfect storm for someone who is nice, but not skilled, to enter.

In an industry that is predicated on network, being nice makes people feel good. When you make someone feel good, you leave a good impression. You leave a good impression to enough people, people talk highly about you. Eventually, this leads to people trusting you. Once they trust you, then you’re in the club. Once you’re in the club, they give you money to manage. Now you’re a VC. So what if we took the opposite example? We have a very skilled investor, but one who isn’t networked in with the inner circle? Unfortunately, if you’re in tech, you know how this story ends.

Outside of venture capital, I see the social capital trap as well. For example, it benefits no one to be truly honest with a founder about their startup that may really not be ready for capital. Telling them you like their startup increases your social capital to that founder, makes the founder feel good, and the objective truth never needs to come out. If you told a founder directly how you felt about it, the founder would dislike you, may spread rumors, and your social capital goes down. This is why so many in tech don’t share the truth. It goes against their professional goals. They’d rather be nice to the founder, not good to the founder.

If this is where we are at as an industry, where does this leave people who are good, yet not as networked? People who lean on their skills versus leaning on their charm? You want the honest answer? I have no idea. And that’s a problem.