How Do Entrepreneurs Benefit from Their Informal Networks?

Abstract

The networks of an entrepreneur constitute a key resource channel for him. This follows from the perspective of viewing social networks as a resource channel thereby giving rise to the concept of ‘Social Capital’. The relationship an entrepreneur shares with fellow beings in entrepreneurial, alumni, and ex-colleague networks can also be a source of social capital for an entrepreneur. Through these networks, an entrepreneur can immerse himself in the business/social environment and seek to exchange certain tangible and intangible benefits. There are various kinds of professional networks that an entrepreneur would interact in. We call such networks as ‘Entrepreneurial Networks’. Industry bodies, interest groups, etc., also come under this category of networks. The networks that an individual builds by virtue of belonging to his/her school /college alumni association is called ‘Alumni networks’. Many entrepreneurs have past experience in various capacities in companies. In that process they would have worked with a many colleagues. Such colleagues constitute the ‘Ex-colleague networks’ of an individual. The goal of this study is to investigate and compare the benefits that entrepreneurs derive from their entrepreneurial network, alumni network, and ex-colleague network. The benefits considered are mentoring, information, visibility, technical help, contacts, and reputational endorsements. Friedman Test and Wilcoxon Signed-Rank Test is used to compare benefits that entrepreneurs derive from their entrepreneurial network, alumni network, and ex-colleague network. The results show that ex-colleague networks of an entrepreneur are the most useful in terms of the benefits that entrepreneurs derive in the form mentoring, information, technical help, contacts, and reputational endorsements. Entrepreneurial networks are useful to entrepreneur since they provide a forum for entrepreneurs to make their companies visible to the world. Entrepreneurs rarely derived benefits from their Alumni networks.

Appendix

Entrepreneurial Ecosystem of Bangalore

A brief description of the main entrepreneurial networks, forums, and conferences that contribute to the entrepreneurial ecosystem of Bangalore is given below. The information below has been compiled from various sources on the Internet.

1.1 Open Coffee Club

Open Coffee Club (OCC) is an open forum for Entrepreneurs, aspiring Entrepreneurs and Investors, to come together and connect with each other at the grass root level. The group holds its meetings every alternate Sunday. OCC Bangalore is one of the oldest entrepreneurship un-conference styled communities in India. OCC Bangalore is a place to meet and share with your peers; mutually solve problems and share joy; learn from those you look up to (and with others in the ecosystem); especially with whom you are not able to reach and connect for whatever reasons such as lack of access, time, awareness, etc. OCC is the community to meet, find and discover your potential co-founder, mentor, investor, employee, service provider, customers/early adopters, and sensible critics. OCC Bangalore is also the forum where successful entrepreneurs and such others want to give back to the start-up ecosystem and nurture the aspiring entrepreneurs of tomorrow.

Source: Adapted from http://bangaloreocc.blogspot.com/ and http://occbangalore.org/ (accessed on 15 Oct 2011).

1.2 Startup Saturday

Startup Saturday is an initiative by Headstart to provide entrepreneurs in each city with a monthly community driven forum that is structured in agenda but open in discussions. A Startup Saturday provides a forum for entrepreneurs to discuss, present, network, and learn from peers, prospective customers, adopters, partners, and investors. The fundamental idea is to have all parts of the innovation ecosystem interact with each other with high frequency and through rich conversation.

Source: Reproduced from http://www.mybangalore.com/article/0609/startup-saturday-bangalore-online-market-e-commerce.html and http://startupsaturday.headstart.in/ (accessed on 15 Oct 2011).

1.3 NEN (National Entrepreneurship Network)

The nonprofit National Entrepreneurship Network was established in 2003 with a mission to create and support high-growth entrepreneurs, driving job-creation, and economic growth in India. NEN represents India’s largest and most dynamic community of new and future high growth entrepreneurs, with over 70,000 members in 30 cities. It provides critical support to start-ups and early-stage entrepreneurs through high-impact entrepreneurship education; access to mentors and experts; fast-track access to incubation and funding; and learning tools and materials. It partners with over 470 top-tier academic institutes in India to help them develop vibrant entrepreneurship ecosystems on campus, which develop and support new and future entrepreneurs.

Source: Reproduced from http://www.nenonline.org/aboutnen/about_nen (accessed 15 Oct 2011)

1.4 Silicon India Startup City

Silicon India Startup City is a technology showcase event wherein entrepreneurs can demonstrate the USP’s of their enterprises. It is conducted by a technology portal called ‘Silicon India’ which covers business, technology, and entrepreneurship.

Source: Adapted from http://www.siliconindia.com/events-overview/Startup-city-Bangalore-StartupcityBlore2011.html (accessed on 15 Oct 2011)

1.5 NASSCOM Product Conclave

NASSCOM is the premier trade body and the chamber of commerce of the IT-BPO industries in India. NASSCOM is a global trade body with more than 1,200 members, which include both Indian and multinational companies that have a presence in India. NASSCOM’s member and associate member companies are broadly in the business of software development, software services, software products, consulting services, BPO services, e-commerce and web services, engineering services off-shoring, and animation and gaming. They organize the event NASSCOM Product Conclave every year. This gathering of the software product ecosystem—both from India and abroad—comprises a carefully selected team of speakers who have decades of cumulative experience in nurturing, running, and growing software product businesses.

Source: Reproduced from http://www.nasscom.in/overview and http://nasscom-emerge.groupsite.com/group/npc (accessed on 15 oct 2011)

1.6 TiE (The Indus Entrepreneurs)

TiE is a global network of entrepreneurs and professionals dedicated to the advancement of entrepreneurship. The Indus Entrepreneurs (TiE) is a global not-for-profit organization focused on promoting entrepreneurship. TiE helps budding entrepreneurs through advice, guidance, and assistance from successful and experienced entrepreneurs and professionals.

Source: Adapted from http://bangalore.tie.org/chapterHome/about_tie/viewInnerPagePT (accessed on 15 oct 2011)

1.7 BNI Bangalore

BNI Bangalore is a local outfit for BNI—an international organization present in over 37 countries with 100,000+ members and about 5,000 chapters. BNI Addvantage is agency which supports all chapters in Bangalore. Members of this consists mainly business owners and professionals. Only one person per professional category is allowed. It provides a unique platform for its members to generate new businesses through referrals. BNI offers a unique platform for its members to generate new business through a structured system of referrals, week after week through a paid membership service. It also provides extensive training services to its members to enhance their various skill levels that would attract more business toward them.

Source:Adapted from http://bni-india.com/bni-india/ ( accessed on 15 Oct 2011)