The Causes and Consequences of Churn in Entrepreneurs’ Personal Networks

Abstract

This study examines the causes and consequences of churn in technology entrepreneurs’ (ego) core personal networks. Churn refers to the change in the composition of an entrepreneur's core personal network due to the entry of new network contacts (alters) or exit of existing network contacts. We draw on recent research describing networking styles to examine how a focal entrepreneur's networking actions affects churn in his/her core personal network and thereby increases his/her venture's portfolio of exchange partners. We find that entrepreneurs whose networking actions involve establishing greater interpersonal knowledge when interacting with strangers or relationally embedding ties with existing alters experience lesser network churn. In contrast, entrepreneurs whose networking actions involved greater time pacing of interactions with existing alters experienced greater network churn. The longitudinal empirical analysis on a sample of Indian high technology entrepreneurs operating business‐to‐business ventures provides support for our theoretical framework. We contribute to the entrepreneurial networks literature by systematically examining the dynamics of technology entrepreneurs’ core personal networks and their venture‐level consequences. Copyright © 2012 Strategic Management Society.