Is Social Capital the key to Entrepreneurship in 2017?

According to google:

So an entrepreneur is a business person; an individual willing to take risks to succeed in industry. Often certain characteristic traits are associated with an entrepreneur: problem solver, risk taker, confident, and self motivated. According to Business Dictionary, an entrepreneur puts up the capital and assumes all the risk. 

This week I came across some articles that shed new light on my idea of entrepreneurship. This aforementioned capital might not mean just dollars and cents. Dora Moscoso, a project specialist at Inter-American Development bank, argues that “social capital and access to information can in some ways substitute for the support that capital provides, and resilient entrepreneurs rely on them.” In her post on EconoMonitor, Dora makes the case that who you know is just as important as who’s investing. An entrepreneur’s friends, family, colleagues, mentors, other business relationships are all assets that add value to a start up business. At the beginning of any venture; there is tons of information to process, and being well connected to individuals in various fields can come in handy. 

Moscoso’s article is referring in particular to starting innovative and revolutionary businesses in some of the less fortunate countries of the world, specifically; Chile, Israel, Rwanda, and South Korea. She brings up this issue because in places like this, resources are scarce and local governments are less likely to help. However, her theory still rings true. Haven’t you heard in America, “it’s all about who you know?” Although social capital is so much more than that. 

Dr. Wayne Baker a professor of management and organizations at the University of Michigan, defines social capital in his Book as,”The resources available in and through personal and business networks. These resources include information, ideas, leads, business opportunities, financial capital, power and influence, emotional support, even goodwill, trust and cooperation.” Baker also goes on to explain that it’s considered social because while it is an asset to an individual, no one person can own it. A lot of building these relationships in 2017 involves social media. Whether that be through Twitter, Facebook, or LinkdIn; it is imperative that to be successful these relationships must be cultivated and maintained. You never know who you may meet in passing that can be an immense help 5 or 10 years down the road. 


Now in reality, social capital sounds good and everything. Sure everybody has friends and people who offer them advice, but the question is how to monetize this idea. How can you turn your social network or capital into a business? It’s all about making money, right? Well it’s nearly impossible to give an evaluation to a person’s relationships, so it’s all about how you use these relationships. When you come up with an idea, and yes it might be brilliant, bring in some people you can trust and get their opinion. Maybe somebody loves it. Maybe they have a cousin in Silicon Valley who could invest some money. Right there your network is extended and your social capital has grown. Potentially, even turns into real capital. 

In closing, entrepreneurship is all about the people involved. It’s about the quality of these relationships, individuals who work together to innovate and solve problems. That is how $25 billion IPO’s are started. It’s different in 2017 then it has been in years past, but the key has always been connections. In fact, in today’s social media age, it’s so much easier to connect with a vast array of people all over the globe. So remember, get out there and make friends. Somebody can always be useful to you, or you to them. Build and maintain lasting relationships, everybody loves making money and nobody hates a good idea. 

Some interesting articles for further reading:

http://www.inc.com/kimberly-weisul/why-social-capital-key-entrepreneurs-success.html

http://www.economonitor.com/blog/2017/02/is-social-capital-the-secret-ingredient-for-entrepreneurial-success/

https://ijnet.org/en/blog/how-digital-media-sites-can-monetize-their-social-capital

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