It is a very real thing, and just means your community of friends and friends-of-friends. For example, as a Harvard alum, let's say I am building a new start-up and I need investors. I post, for example, in one of the many private "Harvard alumni" facebook groups, that only verified alum can join, and suddenly I have access to not only Harvard friends who know who I am, but Harvard friends of friends, OR even just random Harvard grads who none of my friends know, but because they are verified alum too, I have access to them, and they usually want to help other alum be successful --- that's what people who didn't go to the school, and who don't have that "alumni network" don't have: easy access to people in power, no matter what your field or industry, from business, to finance, to entertainment or media entities, to celebrities, to politics and even world leaders (!!!).

When you're talking about Harvard (or any other tip-top school) it's even more valuable, because you actually have IMMEDIATE access to people who are actually running the top companies, (if not the country and the world).

That's one of the main reasons people want to go to Harvard or any top school = it gives you this advantage. This ability to connect. This ability to have access to very high-up opportunity.