UPDATE: We have made progress in our research, that led to a new product, LAB.
With LAB we are now able to measure how efficient a network of a startup is and how close is to the core of a given ecosystem. To find out more about LAB, please read HERE.
Building a successful startup, it’s all about great founders.
But, what makes a founder great? Surely it’s the ability to foresee the future, to imagine something that doesn’t exist but nobody will be able to live without.
But the idea is not enough, and charisma can’t do the job alone either.
So, what really makes the difference? What determines who, between two visionaries both with great ideas, is going to succeed?
Of course, we are talking about a multitude of factors, not least meeting the right person – being him/her an investor or a developer – in the right moment, or founding the business in a lively and productive ecosystem. In a nutshell, it is all about having a network which allows to access to key people.
Indeed, more and more young entrepreneurs are hitting the global startup scene, attracted by the perspective of creating a disruptive product starting from a garage or campus dormitory. While it is true that a digital startup do not need any proximity to infrastructures and lines of communication, nevertheless it has to be heavily connected
within its ecosystem.
So, no one would argue about the importance of having a good network within an ecosystem and every successful entrepreneur will tell you how important his/her connections had been.
Still, some questions remain: what means to have a good network? How can it be measured? Which are the indexes that we must take into account, what makes the Silicon Valley’s ecosystem more appealing than many others.
In short, how a founder’s network should look like to make him/her a great founder?
Network analysis is a relatively recent discipline, but arises interest of physics and business development departments of universities across the globe.
The research is currently focusing on three main aspects, which are well illustrated in The Rainforest, Greg Horowitt’s landmark in startup literature.
(1)The vibrancy [of an innovation ecosystem] correlates to
the number of people in a network and their ability to
connect with one another. (2) [Innovation ecosystem]
depends on people who actively bridge social distances
and connect disparate parties together. (3) The greater the
diversity in human specialisation, the greater the potential
value of exchange in a system.
Firstly, scholars agree with Horowitt by highlighting the importance of the capacity of people within an ecosystem to connect to each other in order to gain advantages that could not be obtained otherwise. This is being called Social Capital.
Secondly, they single out how networks can be differently structured and how they can represent different kinds of social capital. Indeed, some nodes can both operate as “brokers” and connect different groups of people together, or be “clusters” of a deeply interconnected group of people.
Finally, both Horowitt and scholars put the stress on the concept of diversity in terms of specialisation, and how it adds value to exchanges between people.
In the next weeks we will deal with all the three aspects of network analysis that are also the tools that Startup Network uses to help founders becoming great founders.