The Effect of Social Networks on Resource Access and Business Start-Ups

Social networks, patterns of lasting social relations between people, are an important part of the entrepreneur's social capital. While previous empirical research has considered the direct relationship between social networks and entrepreneurship, the authors refer specifically to the relationship between social network and entrepreneurship through resources: how the strength of ties affects resource access and how resource access determines the chance for business success in business start-ups. Data was collected from a survey in which 100 persons who tried to start new businesses in Norway were interviewed. The results indicate that the relation between social networks features and the resources provided through the networks is different from what the literature presents. Weak ties give access to information resources more often than other resources, and strong ties more often give access to motivation. The differences are not significant, and for finances there is almost no difference between weak and strong ties. The authors offer a tentative conclusion based on two arguments. First, weak ties don't seem to be more important for access to information resources for the entrepreneurs that started a business than for entrepreneurs who failed. Second, when entrepreneurs were asked to name the persons from whom they received information, they tended to remember the persons who provided valuable information. The results of the study have implications for entrepreneurial practice. It is recommended that entrepreneurs search for resources through their contacts regardless ofthe strength of the relationship. (CBS)