Network Effects on Entrepreneurial Processes: Start-Ups in the Dutch Ict Industry 1990-2000

Abstract

The value of networks as an integral part of the explanation of entrepreneurial success is widely acknowledged. It is unclear, however, in what way certain networks influence the success of start-up companies. The question of this paper is: &apos'in what way does the entrepreneur&apos's network contribute to the success of his start-up.&apos' The network is important because it may contribute to three entrepreneurial processes, i.e. the ability of the entrepreneur to discover opportunities, to get resources, and to gain legitimacy. The networks of 30 ICT start-ups in the Netherlands were (re)constructed on the basis of in-depth interviews with the founders and desk research. A distinction was made between three types of initial network conditions. First, the more or less independent start-ups' secondly, spin-offs from established companies and lastly, start-ups in incubators. On the basis of the variations in the structure of the network and the type of relations we draw conclusions concerning the contribution of a particular network configuration to the ability of the start-up to survive and to grow.

Keywords: start-up firms, networks, entrepreneurial processes, ICT Industry

JEL Classification: M, M10, L2, M13