Our October Article of the Month is Early Network Events in the Later Success of Chinese

Entrepreneurs by Ronald S. Burt and Sonja Opper. Download free for the entire month.

Abstract

We trace the social networks around Chinese entrepreneurs back to their firm’s founding to learn about the role early events play in the later success of a business. We use name generator questions paired with career history questions to identify ‘event contacts’ missed by the usual focus on current business. We draw four conclusions from interviews with a large, stratified random sample of entrepreneurs: (1) Relations with event contacts stand out for guanxi qualities of high trust relatively independent of the surrounding network structure, and are critical to distinguishing more successful entrepreneurs from the less successful. (2) The substance of a significant event matters less than the fact that the entrepreneur deems it significant. (3) When family is turned to for support it is most likely at founding, but family is not the usual source of support at founding. Rather, entrepreneurs turn to people they have known for many years, typically people beyond the entrepreneur’s family. (4) The transition from founding to first significant event stands out as distinctly consequential for later success. Entrepreneurs who turn for help on their first significant event to a person separate from, but especially close to, the founding contact are more successful in their business development. That early move is not visible in the later network around the entrepreneur.