Does the degree of redundancy in social networks influence the success of business start‐ups?

Abstract

Entrepreneurs use their social network to start businesses. According to Burt, low redundancy in the social network promotes entrepreneurial success. In non‐redundant networks the entrepreneurs’ contacts do not know each other and rarely have the same information. Low network redundancy gives entrepreneurs better information and it allows entrepreneurs to combine resources from non‐redundant sources. In contrast, when there is high redundancy the contacts know each other and may provide the same information. However, our study cannot confirm this hypothesis. Using data on 100 entrepreneurs in Norway we find that simple measures such as the number and strength of ties are more important for entrepreneurs than redundancy because many weak and strong ties increase the entrepreneur’s access to resources. We find that much redundancy is beneficial. Entrepreneurs get information and support more easily if they have many ties with redundant relations.