Understanding Social Capital and Building Trust

Not long ago, someone I had just met (an acquaintance I barely knew) asked me to introduce them to someone important in my network. > “Hey, can you introduce me to this person? I saw you're connected on LinkedIn. Thanks!” It really irritated me. I wasn’t sure why at first. I love helping people and making introductions. I usually do it instinctively. But something about this one felt off. Maybe it was how they phrased it, or maybe it was how casually they assumed I’d say yes. So I started thinking more about relationships, specifically, the difference between transactional and non-transactional ones, and how social capital plays a role. I wanted to dig into why some asks feel generous and easy, while others feel like a withdrawal from an account that was never funded in the first place. Around the same time, I came across an article called Dissecting Social Capital, which frankly inspired much of this piece and got me thinking even more. In this article, I’ll break down the theory of social capital, building trust with others in your community, and how to make sure you’re leaving every interaction with the right impression. Whether you realize it or not, every conversation is either earning you trust or costing you. Don't make the mistakes most people do. ## What is Social Capital? First, it's important to understand what social capital is. The cleanest definition I’ve seen is that it’s the accumulated goodwill, reputation, and trust you’ve built up with other people. You earn social capital by being helpful, generous, dependable, and credible. You build social capital when you help a friend land their dream job by making an introduction, prepping them for interviews, and helping them negotiate the offer, without expecting anything in return. You earn their trust, and they see you in a more positive light, which later on can be translated into reciprocity. You become someone they want to help back someday. Social capital behaves a lot like financial capital. It has three key traits: • Productive – you can convert social capital into productive benefits like introductions, favors, and even financial capital. • Durable – it retains value over time, but can also erode without maintenance • Flexible – it can be substituted for other forms of capital and be used across different benefits At the end of the day, social capital is a tangible way to measure the breadth and depth of your relationships. ## “Transactional” Relationships When people describe someone as transactional, they’re often thinking of a situation like the one I shared at the start – someone asking for a favor the moment you meet them. But here’s the truth: all relationships are transactional. Every relationship operates under a social contract between two people, though the nature of those contracts can vary. What most people label as “transactional” typically refers to relationships where the terms are explicit and conditional. Take an employer-employee relationship: the employer pays a salary, and the employee performs a defined role. The expectations are clear. There’s a direct exchange. Contrast that with a more implicit agreement, like the one between close friends. Nothing is written down, but the unspoken understanding is mutual support, trust, and time. The “contract” is looser, but still present. ## Building Trust Let’s say you just met someone and purely saw them as a means to an end – someone who can get you a job, introduce you to an investor, or promote your business. You’d probably make the ask regardless of what it might cost them or how little trust you’ve built. You’d act more transactionally. Now invert it. You meet someone you genuinely want to build a long-term relationship with over decades. You respect them and believe the lifetime value of the relationship is worth more than any short-term gain. You’d probably be more cautious and wait before asking for anything. You’d focus on building trust first. > There's something slightly paradoxical in most human relationships: people generally don't like making explicit the underlying transactional structure of relationships, but this structure is revealed when people fail to appreciate the principle of reciprocity that relationships are built on.— Vaishnav Sunil from Optima & Outliers That’s why the example I shared at the beginning irritated me. It signaled that this person saw me as a shortcut to their goal, not a human worth investing in. ## Playing Long-Term Games So how do you build social capital? You treat every relationship like it’s going to last for decades. You play long-term games with long-term people. - Build the well. Do things before people ask. Help them solve problems, share opportunities, and connect dots, even when there’s no immediate benefit to you. Build your well long before you need water. - Make introductions thoughtfully. Making an introduction is the easiest way to add value to people's lives. What takes you a minute could result in a decade of value for two other people. - Use the barbell strategy. Keep in touch with small, consistent check-ins – quick messages, reactions to wins, or sending something thoughtful. Then, occasionally, spend deep, quality time together. - Build long-term credibility. Do things that get others to say positive things about you when you're not in the room. - Don’t ask for a favor too early. Or you're signaling that you want to play short-term games. - Think in decades. What would you do differently if this person were around for the next 40 years? One last thing: some people can brute-force relationships with charisma. They charm their way into rooms and win people over with their energy to make asks. While that might work in the short term, in the long term, I always believe that relationships are built on a mutually beneficial, reciprocal nature.