Printer friendly version
Successful entrepeneurs on social networks
02 July 2012
A preliminary analysis of the online presence and activities of entrepreneurs using online social networks can have a positive or a negative effect on the success of their start-up companies. According to the report to be published in the International Journal of Organisational Design and Engineering LinkedIn use has a positive relationship with entrepreneurial survival, while Facebook has neither a positive nor a negative impact. Conversely, Twitter use by entrepeneurs for networking reveals a negative relationship.
Yang Song and Tsvi Vinig of Amsterdam Business School, at the University of Amsterdam in The Netherlands have carried out a pilot study in which they use a novel approach to collect entrepreneur online social network data from three well-known online tools. They found that many entrepreneurs use several online sites to form networks of networks. They were able to analyse the online network industry as represented by these three sites and to produce a picture of location diversity.
The general perception surrounding the LinkedIn online community is that it is driven primarily by individuals hoping to network with others in their industry with the potential for finding new business opportunities. By contrast, Facebook is often seen as a family and friends service on which brands and organisations have piggybacked. Twitter is more about sharing news and the concept of microblogging rather than building a business network.
The team sampled the activities of 184 entrepreneurs, of those 114 use LinkedIn and Facebook, and 78 use LinkedIn, Facebook, and Twitter. The dataset includes more than 58,000 members or nodes. Their statistical analysis generated a snapshot view of the networks for these 184 individuals as they interact with the 58000 connections. Intriguingly, the team found no correlation between entrepreneurial success and the diversity of members of the networks.
"An entrepreneur's use of LinkedIn, in terms of network size, has a positive impact on a venture's survival," Song explains. "However, this finding raises a question regarding the causality between network size and its impact on survival: do successful entrepreneurs establish larger network because of their success or large networks are making successful entrepreneurs?" The answer to that may emerge from follow-up research in this area.