How important is who you know in this industry?

Very important. Go to functions and mingle. Introduce yourself, but do your research. Since you can just use your smartphone to pull up whatever you want, get the person's name if you can, pull them up, and voila ... now you have something to say to them. "I saw such and such movie (give the name), and I thought the actors were great." That's a start. Just remove the fear or insecurities 'if' that is present and talk confidently and see where the conversation goes. You might be reading for them in the future and you can remind them of the time you met them. They might even ask if you have a card with your contact info on it once they know that you are an actor. Just go for it! Word of caution: Never place yourself in a compromising situation that you will regret. Network in the public and enjoy!