A Tale of Two: How Network Agency Influences Network Creation for Start-ups

Abstract

There is an existing consensus that networks positively impact start-ups. New ventures gain access to market information, funding, emotional support and improved legitimacy from networking. However, existing efforts at articulating network creation and impact on new ventures are skewed due to a strong focus on structural properties. Although these properties contribute to understanding network creation and impact, they often ignore the individual who is either a network beneficiary or broker. This study examines the role of the network actor’s agency in entrepreneurial network creation. Understanding agency is critical for explaining how individuals make sense of network opportunities available within their context. Network agency reveals how entrepreneurial networks are created, what influences actor motives and behaviour, and the brokerage methods adopted to meet these motives. This study explores network agency in two contexts: the interventionist incubator context and the location-induced cluster context. The Lagos Technology Ecosystem comprised of different incubator models and cluster is examined. 31 semi-structured interviews with start-ups from both contexts were conducted to get a nuanced view of how the context influences entrepreneurs' network agency. This paper reveals that network motives like personality, reciprocity, and legitimacy as the main motives for tenant firms to engage in network activities. Conversely, cluster firms listed trust, and the need to access knowledge, information and opportunity as key reasons for engaging in network action. In both contexts, direct and indirect brokerage is utilised to meet the motives triggered. However, the dynamics and nature of these brokerage methods are different across the two contexts. Tenant firms demonstrate a tertius Iugnes behaviour, while cluster firms demonstrate separation behaviour.