By Sasha Milam
Research on how entrepreneurs use social networks extends back for decades, but the academic literature has struggled to keep up with the recent transition to online social network sites such as Facebook and LinkedIn. Gustavson faculty members Claudia Smith and Brock Smith sought to bridge this gap with their recent paper, “Embracing Digital Networks: Entrepreneurs’ Social Capital Online,” published in Journal of Business Venturing.
“When researchers discuss social capital, they are drawing on 50 years of research conducted in the offline context,” says Claudia Smith. “One of the major contributions of this paper is to not only point out that the online context is different from the offline context—which, surprisingly, had not been done previously—but also to explore how it is different.”
Through in-depth interviews with 16 founders and integration of theories from existing entrepreneurship and computer-mediated communications literatures, the authors developed a multi-disciplinary framework with which to understand the online social networking behaviours of entrepreneurs, among others.
In addition to paving the way for research that addresses today’s more complex social capital networks, the research has some immediate implications for practitioners.
“Ultimately, the question the practitioner wants answered is, ‘is it worth it?’” says Brock. “‘Should I be spending all this time, effort and money on digital social networks?’ And putting aside the marketing answer, and talking strictly to an entrepreneur building a business, the answer is ‘probably not.’”
Of course, there are nuances: those looking to quickly and efficiently increase the number of names in their Rolodex might find social networking sites more useful than those looking for relationships that yield more substance, such as access to specialized or scarce resources.
Says Claudia, “The conceptual framework, research propositions and insights offered in this paper will hopefully act as a stepping stone to bring social capital research into today’s online context. This foundation creates a number of opportunities for additional exploration of how entrepreneurs build their networks and social capital online.”
