The power of the business matchmaker

January 3, 2013: 10:28 AM ET

Matchmakers can connect millions of people looking to pair talent with jobs, buyers with vendors, tenants with landlords, etc. The Fortune 500 should take note.120831022306-jigsaw-puzzle-people-gallery-horizontal

By John Hagel and John Seely Brown

FORTUNE - You can find matchmakers in many different forms in just about every society. Chinese, Hindu, and Jewish cultures have institutionalized the role for several millennia. At different points in time, talented matchmakers have held positions of status, and with good reason. By connecting people for romantic or other reasons, an intermediary can dramatically expedite the connection process, decrease search costs, and help individuals find better matches than they could on their own.

When we talk about encouraging interactions between many people, it's helpful to discuss the differences between centralized and decentralized ecosystems. Both require an organizer to make interaction possible, but in centralized ecosystems, such as those run by a matchmaker, the organizer actively manages interactions and connects participants for specific purposes. In decentralized ecosystems, participants are left to govern themselves. Your local bar is a good example of a decentralized ecosystem: The owner provides tables, chairs and alcohol, but the patrons fend for themselves.

Being a skilled matchmaker in any industry requires a solid understanding of all potential parties, as well as the ability to equally represent both sides to a connection without bias. As we've studied various business ecosystems, it's become evident that matchmakers have become increasingly important when it comes to connecting millions of people looking to pair talent with jobs, buyers with vendors, tenants with landlords, etc.

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Consider the growing startup investment market, where a good fit for both entrepreneurs and investors requires much more than just a financial transaction. In addition to capital, entrepreneurs need expertise, industry connections, and support from their investors to connect to others. And in an increasingly competitive deal market, the growing number of both new start-ups and potential investors makes meeting the right person increasingly difficult, and the traditional let's-grab-a-cup-of-coffee introduction an impractical way to sort through hundreds of possible investments.

There are several platforms in the crowd funding space, most notably Kickstarter and Indiegogo. AngelList is another example of such a platform. However, AngelList's model tackles the problem by not only creating a funding platform, but also by acting as matchmaker for entrepreneurs and investors. Not dissimilar from an online dating site, entrepreneurs and investors create profiles; entrepreneurs can choose which investors can see their profiles, and investors receive a curated list of 10-20 start ups each day on their feed. AngelList provides the names of individuals and institutions that have already invested in these companies. While some see this 'social proof' as a strong indicator of the startup's viability, others think this model promotes groupthink.

By the nature of their role, matchmakers have access to a large amount of data on the people they connect. Companies like AngelList could be used as a data source for predicting the direction of the startup world, for both investors and entrepreneurs. By tracking the progress of ventures from inception to exit, such companies have the opportunity to expand their role from simply making introductions to supporting long term business relationships.

Matchmaker platforms in the startup world also have the opportunity to connect entrepreneurs with other entrepreneurs (regardless of their location) who are interested in forming new ventures, or who are looking for partners in their current projects. A matchmaker can also connect like-minded angel investors with each other.

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So, what, if anything, does this have to do with large enterprises? Industry leaders have deep visibility into the relationships between players in their industry, whether it's their customers, suppliers or thied parties that help develop new products and services. Many of these relationships today are hub and spoke – the participants interact with the large company at the center of the ecosystem, but only have random interactions with each other.  We suspect that these large companies are missing opportunities by not connecting their partners to each other.

What about connecting two customers who are wrestling with new ways to apply the company's product or service? What about pairing up suppliers who might be able to join forces to redesign their products to work better with each other? By playing a more explicit role as matchmaker, large companies could turn these ad hoc encounters into much more valuable opportunities for collaboration.

Which industries do you think can benefit the most from matchmakers? What kind of matchmakers do you see emerging in your own world?

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About These Authors
John Hagel III and John Seely Brown
John Hagel III and John Seely Brown

John Hagel III is co-chairman and John Seely Brown is independent co-chairman of the Silicon Valley-based Deloitte Center for the Edge, which conducts research to support corporate growth. Hagel has nearly 30 years experience as a management consultant, author, speaker and entrepreneur. From 1984 to 2000, Hagel was a principal at McKinsey & Co., where he was a leader of its strategy practice. Brown is a visiting scholar and advisor to the provost at the University of Southern California. He was the chief scientist of Xerox Corporation and the director of its Palo Alto Research Center. Brown holds several patents and was inducted into the Industry Hall of Fame in 2004.

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