Both are true, but there's no contradiction: people are selective about who they "network" with, and they select based on ability.

But then you could miss out on more qualified people who are not in your immediate social network. It seems wrong for example that most VCs will only take you seriously if you are introduced to them via someone they know.

You don't miss out, because introductions flow so freely. It's not hard to find someone two hops from anyone you want to meet, and once you've done that (if you seem worth introducing), the two hops happen fast.

Wrong, perhaps, but a necessary wrong. Smart people that you know are perhaps the most effective filter to gauge purportedly smart people you don't know. While it would be nice if connections didn't matter, such a world would be infeasible. Thus, you enter the social network on merit: impress someone who is known to be smart, and that's your in. Eventually the line of contact reaches the VC you need to take you seriously.

BTW, this might make some interesting reading: http://www.stanford.edu/group/esrg/siliconvalley/docs/siliconvalleyedge.pdf

Can you please post what it says mainly, if it has a main point. Its too big!

Meritocracy = promotion based on what others think you can do.

Silicon Valley = create wealth based on what you can do.

There isn't a word for it yet as far as I know. Suffice it to say, it's a step above meritocracy.

I think it's called "capitalism".

I'd say the best social network to be in is one that has a bit of a meritocratic air about it. There will always be impressive company among you, no?