The network is an entrepreneur’s best asset
Monday, February 24, 2020
Entrepreneurs have a lot to think about when building a business, and one of the most important may be strengthening and tapping their networks. More than 20 years of academic research has tied business networking to entrepreneurial success, demonstrating that networking is an important way to validate opportunities, connect to resources, and access information.
Research has suggested that entrepreneurs have on average twice the number of online network connections as nonentrepreneurs. Although the raw size of an entrepreneur’s network does not necessarily correlate with startup success, engagement with a tightly connected subset of that network does. An MIT study demonstrates that university-educated entrepreneurs who had large, active alumni networks were more successful, as measured by the number of employees at and revenue associated with the companies they started. And research done here at Chicago Booth finds that it’s not enough to just have a network; how you use your network is important, and trusted contacts can be particularly helpful at overcoming early challenges.