The effect of structural hole bridging on entrepreneurial success in the founding stage : emphasis on sportswear (fashion) related start-ups

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The Effect of Structural Hole Bridging

On Entrepreneurial Success in the

Founding Stage

Emphasis on sportswear (fashion) related start-ups

2016

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Master Thesis

The effect of structural hole bridging on entrepreneurial success in the founding stage of a sportswear (fashion) related start-up.

Student:

Rinaldo Dennis Ronald Sobnath

Student number UVA:

10804994

Student number VU:

1930486

University of Amsterdam

VU University Amsterdam

Joint Degree Master of Science Entrepreneurship

Word count:

Approx. 13.000

Submission date:

15-08-2016

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Acknowledgements

First, I would like to give a special thanks to mw. dr. Yang Song for her advice, guidance and

support during the completion of my master thesis.

Furthermore, I would like to thank all the entrepreneurs included in my sample for

their effort and their willingness to cooperate despite of their busy schedules.

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Abstract

This qualitative multiple case study relied on existing literature and five standardized open-ended interviews with sportswear (fashion) related entrepreneurs in the Netherlands to gain more insights on how the bridging of structural holes by entrepreneurs influences entrepreneurial success in the founding stage. This research distinguishes two broker strategies, tertius gaudens and tertius

iugens, used by entrepreneurs when facing a structural hole to gain information and control benefits.

Both strategies have shown to be contributing in the start-up process leading towards entrepreneurial success.

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1. Introduction

In 2010 Barack Obama, president of the United States, made an important announcement concerning the Start-up America initiative stimulating entrepreneurship. As cited in Feld (2012) Obama

announced the American people the following: “Entrepreneurs embody the promise of America: the idea that if you have a good idea and are willing to work hard and see it through, you can succeed in this country. And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs”. The announcement of Barack Obama caused global attention towards entrepreneurship. Entrepreneurship became a “hot” itemand throughout the world entrepreneurship was regarded as the way to revitalize the global economy after the global financial crisis that began in 2007. This ability of entrepreneurship by creating new ventures is acknowledged by Smallbone and Welter (2006).

The upcoming popularity and stimulation of entrepreneurship over the last decades resulted in the emergence of successful high-tech start-ups in Silicon Valley like Facebook, Twitter and LinkedIn (Feld, 2012). Also on a global scale entrepreneurship is supported. A recent report of KPMG showed that the global investments in start-ups in 2015 increased with 44 percent towards 128 billion dollar in comparison to 2014. This increase also applies to the Netherlands. Oscar Knepper, founder of

Rockstart, argues that the entrepreneurial ecosystems in the Netherlands have improved over the last five years. The investments in Dutch start-up enterprises have increased in amount and in quantity. The focus of the investments is mainly on high-tech, innovation driven and globally scalable start-ups (De Voogt, 2016).

However, there are also non-tech start-ups that prove to be successful and show rapid growth. A great example is Axel Arigato a sneaker brand founded in 2014 in Sweden by Albin Johansson and Max Svärd. In a year time the start-up managed to sell their products in over more than 100 countries and their team expanded to sixteen employees. Their innovative business model which concentrates on building relationships with professionals and customers through social media and selling their products solely online through their own website made this rapid growth possible (Highsnobiety, 2016).

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1.1 Problem definition

This research focuses on the founding process of sportswear start-ups similar to Axel Arigato which also can be considered as fashion start-ups. Concerning the founding stage of sportswear start-ups in specific there is little empirical research available. Prior research regarding entrepreneurship and the founding process of enterprises mainly discusses small medium enterprises in general or high-tech start-ups (Burt, 2000; Hoang & Antoncic, 2003).

Birley (1985) studied the extent to which the entrepreneur interacts with the networks in his local environment during the process of starting a new firm. The research focused on new ventures created between 1977 and 1982 in Indiana. Data was collected by listing available source of help to then be ranked by the respondents based on the extent to which the specific source of help contributed to the assembling of resources of the firm. The research of Birley (1985) showed that main sources of help in assembling resources came from family, friends and colleagues.

Furthermore, Brüderl and Preisendörfer (1998) conducted a research trying to get more insights on the role of social contacts in the start-up phase of a new venture. Brüderl and Preisendörfer (1998)

collected data in 1990 by interviewing a random sample of 1700 new ventures which were founded five years earlier and were established in Bavaria, Germany. The respondents were asked to address how much support they received from different kinds of people based on a five point Likert scale. The research showed that network support increases the probability of survival and growth of newly founded businesses (Brüderl & Preisendörfer, 1998).

The above mentioned prior research (Birley, 1985; Brüderl & Preisendörfer, 1998) show where resources might come from and that network support is beneficial but they do not provide new knowledge with regard to the network structure of an entrepreneur.

Therefore, it is interesting to gain better understanding of how sportswear start-ups and thus

entrepreneurs use their network in the new venture creation process. Entrepreneurs are embedded in a social network which influences the entrepreneurial process (Aldrich & Zimmer, 1986). Multiple studies argue that entrepreneurs benefit from their networks to get access to valuable information for opportunity recognition and novel ideas (Birley, 1985; Aldrich & Zimmer, 1986; Smeltzer et al., 1991; Burt, 1992; Uzzi, 1996; Singh et al., 1999; Shane & Venktaraman, 2000; Burt, 2000). These

opportunities coming from relationships refer to the social capital of an entrepreneur (Burt, 1992). Furthermore Burt (1992) argues that participating in the control and diffusion of information form the basis of the social capital of structural holes. This implicates that bridging structural holes is inevitable for entrepreneurs (Burt, 2000). Burt (2000) refers to structural holes as follows:

“Structural holes create a competitive advantage for an individual whose relationships span the holes. The structural hole between two groups does not mean that people in the groups are unaware of one another. It only means that the people are focused on their own activities such that they do not attend

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to the activities of people in the other group. Holes are buffers, like an insulator in an electric circuit. People on either side of a structural hole circulate in different flows of information. Structural holes are thus an opportunity to broker the flow of information between people, and control the projects that bring together people from opposite sides of the hole. Structural holes separate non-redundant sources of information, sources that are more additive than overlapping.”

Entrepreneurs are brokers whose relationships span the structural holes leading to competitive advantage in the form of information and control benefits regarding rewarding opportunities (Burt 1992, 2000). Based on the structural holes theory developed by Burt (1992, 2000) the expectation for this research is that the bridging of structural holes by entrepreneurs positively influences the new venture creation process and thus entrepreneurial success in the founding stage of a sportswear start-up.

With the exception of a case study of Steier and Greenwood (2000), who examined how structural holes may contribute to the collection of financial resources in the founding stage of a new venture, similar research on the influence of structural holes on entrepreneurial success in the founding stage of a start-up has not been conducted before.

Data is collected in an explorative way by measuring structural hole bridging with the help of qualitative research measurements. Respondents are interviewed based on standardised open-ended interviews and multiple cases are compared in the research to gain more depth insights on how the bridging of structural holes by entrepreneurs might affect the founding process of a sportswear start-up.

1.2 Purpose

The purpose of this research is to gain more insights on the extent to which bridging structural holes influence entrepreneurial success in the founding stage of a sportswear start-up. Ultimately,

contributing to current theories on structural holes with respect to entrepreneurship and decision-taking in practice with respect to network structure and the bridging of structural holes by future entrepreneurs.

1.3 Research question

“To what extent does bridging structural holes influence entrepreneurial success in the founding stage (new venture creation process) of a sportswear (fashion) start-up in the Netherlands?”

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1.4 Relevance

The theoretical relevance of this research is that it empirically tests the structural hole theory developed by Burt (1992, 2000) regarding entrepreneurial success in the founding stage of a

sportswear start-up in the Netherlands. Prior research regarding structural holes and entrepreneurship is very limited and has not focused on these subjects in specific (Burt, 2000; Steier & Greenwood, 2000; Hoang & Antoncic, 2003). Furthermore, this research examines the influence of structural holes based on qualitative measurement. Therefore this research is explorative of character leading towards a more complete theory concerning the bridging of structural holes and entrepreneurship.

The practical relevance of this research is to provide entrepreneurs and future entrepreneurs more insights on how to effectively bridge structural holes and structure their network. Then to be able to apply this knowledge in order to more effectively collect resources and gain access towards valuable information from their network, which is crucial for the founding stage of start-ups in general in order to exploit an entrepreneurial opportunity (Aldrich, Rosen & Woodward, 1987).

1.5 Structure

In the following chapter the theoretical framework is discussed. Based on the literature research propositions are extracted from theory and formulated and the conceptual model is presented. Thereafter, the methodology used to gather and analyse data are discussed. Followed by the next chapter findings. Which presents the main findings and results of this research. In the last chapter, the emphasis is on the discussion, conclusion, limitations and suggestions for future research.

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2. Theoretical framework

2.1 Social capital & Structural holes

An actor in a social network possesses multiple types of capital. Burt (1992) distinguishes the following three: human capital, financial capital and social capital. Human and financial capital are contained by an individual (Steier & Greenwood, 2000). While social capital, “the ability of actors to secure benefits by virtue of membership in social networks or other social structures” (Portes, 2000), is based on the relationships an actor has with other actors. Social capital can only exist in a mutual acknowledged relationship. Without the participation of both actors the social capital contained by the relationship will be lost (Bourdieu, 1985; Coleman, 1988; Burt, 1992). By means of these relationships an actor receives opportunities that can be exploited to eventually gain competitive advantage. Burt (1992) addresses social capital as determining for competitive advantage since it has the ability to make human and financial capital profitable. The social networks containing social capital do not emerge organically and need to be strategically structured in order to be beneficial (Bourdieu, 1985). Within social capital the bridging of structural holes is an effective way to do so (Burt, 1992; Portes, 2000; Zaheer & Bell, 2005).

As mentioned earlier the social capital of structural holes lies within the control and brokerage of information diffusion (Burt, 1992). The structural hole theory of Burt (1992) is based on network theories that originate from sociology (Simmel, 1950; Merton, 1968; Granovetter, 1973; Freeman, 1977; Cook & Emerson, 1978; Burt, 1980). Structural holes are defined by Burt (1992) as

relationships of non-redundancy amongst two actors. Actors are non-redundant if they are

disconnected. This disconnection can entail no direct contact amongst actors or indirect contact in the sense of one actor possessing contacts that exclude the other actor (Burt, 1992).

The holes in the social structure can provide an actor competitive advantage under the condition that his or her relationships span the holes between otherwise separated groups of actors (Burt, 1992, 2000). The separated groups might be aware of each other. However, until the structural hole is bridged by an actor the separate groups are minding their own business. The actors of one group do not intervene in activities of the other group. The actors on each side of a structural hole are provided with different sources of information. This makes it possible for an actor to connect the separate groups and strategically diffuse and control information amongst them (Burt, 1992, 2000). The sources of information separated by a structural hole are non-redundant which entails that information that travels over a structural hole is rather additive than overlapping of character (Burt, 1992).

Burt (1992) distinguishes cohesion and equivalence as the two indicators of redundancy. Redundancy by cohesion is present when contacts in a network are connected with a strong relationship. Because of the strong relationship amongst them they tend to have access towards mostly the same information causing redundant information benefits. Redundancy by structural equivalence is present when an

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actor has multiple contacts leading towards the same network op people. The contacts lead towards the same source of information causing redundant information benefits. However, a contact seeming redundant by structural equivalence at first sight can still be non-redundant if he or she has connections to a non-redundant contact beyond the equivalence network of people.

The goal of structural hole bridging is to gain benefits from non-redundant contacts and avoid redundancy (Steier & Greendwood, 2000). There is no value added to a person’s network in terms novel information and opportunities by adding redundant contacts to his or her network.

Accordingly, the structural hole theory of Burt (1992, 2000) suggests that a person with a network structure rich in structural holes is alert, contributes, but is also controlling towards more rewarding opportunities. The evolution of opportunities and the way they are exploited varies from one person to another based on their decisions and actions, but they are all derived from a structural hole (Burt, 2000).

Acting as a broker building bridges over structural holes comes with social accountabilities that require more effort compared to other type of positions (Feld, 1981; Burt, 2002). This is due to the high amounts of information and resources that crosses a person in a bridging position between two network clusters (Cornwell, 2009). Furthermore, if the separate clusters agree upon different social norms within the clusters, the person in the bridging position might also be challenged on a cognitive level in the sense of adapting according to the social norms present when approaching the different clusters (Mische & White, 1998; White, 2008).

Burt (2000) elaborates on the argument by relating it towards entrepreneurship, arguing that entrepreneurial networks are networks containing entrepreneurial opportunities via structural holes. Furthermore, he argues that entrepreneurs in particular are people competent of bridging structural holes. Entrepreneurs process and distribute information more effective and towards a larger audience compared to a bureaucracy. Besides that entrepreneurs are flexible in the use of their network in order to come to solutions (Williams, 1998; Tillman & Indergaard, 1999). With regard to the bridging of structural holes it is important that an entrepreneur focusses on expanding his or her network with non-redundant clusters while at the same time minimalizing the number of ties to each cluster in order for the network to maintain effective (Burt, 1992; Steier & Greenwood, 2000).

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2.2 Structural holes & benefits

The structural hole theory of Burt (1992) elicits information and control benefits as the most significant benefits that can be gained through effective structural hole bridging. The structure of a network can empower the benefits that an entrepreneur can gain from his or her network. Burt (1992) distinguishes three forms of information benefits: access, timing and referrals.

Access entails receiving relevant information and knowing how to utilize it by passing it through to another person within your personal network that is likely to benefit from that information. This access is important because the diffusion of information in an competitive environment as those of

entrepreneurs is not always transparent. At the same time an entrepreneur and the people in his or her network are limited with regard to the amount of information they can process and use rationally (Simon, 1991). Therefore an entrepreneurs’ network is a helpful tool for gathering or receiving selective information that might be valuable (Burt, 1992). The information processed by all the people in a network can keep an entrepreneur up-to-date with regard to potential opportunities or threats. Knowing who to include with regard to the relevant information received and an opportunity is also an important aspect of access. Especially with regard to entrepreneurs who often need to coordinate people in order to be able to exploit an opportunity.

Timing is beneficial in the sense that the information apart from being received, is received in an early stage. Receiving information from a contact within your network in an early stage provides an

entrepreneur with the privilege to process and react upon the information received before it reaches the average person. An entrepreneur can also decide to pass the information to another person in his or her network if the information is more rewarding for that person (Burt, 1992).

This introduces information benefits through referrals. Next to referring someone else with regard to valuable information received there is also information regarding the entrepreneur diffused across the network contacts or even beyond the network. These referrals are described by Burt (1992) as positive future opportunities by mentioning your name, in this case of the entrepreneur, in the right place at the right time. This way the amount of potential opportunities coming to an entrepreneur is expanded. Referrals are also beneficial in the sense that they increase the perceived legitimacy of the

entrepreneur (Burt, 1992). If you are referred by a contact who is already perceived as trustworthy the person offering the information or opportunity is more likely to trust the entrepreneur based on that referral.

As mentioned before next to information benefits the bridging of structural holes provide control benefits. The most prominent way of getting control benefits is through tertius gaudens (Simmel, 1922; Coser, 1975; Burt, 1992; Burt; 2000). The meaning of tertius gaudens is the third who benefits. This relates to entrepreneurs in the sense that entrepreneurs in literature are characterised as brokers who profit from connecting different people in a way that creates value (Burt, 1992; Thornton, 1999).

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All the actors in the network of an entrepreneur have different demands of which non is compelling (Burt, 1992). This causes tension amongst the actors in the form of uncertainty regarding control. Burt (1992) argues that this uncertainty in a network allows for a tertius to show up and act as a broker. Therefore structural holes in an entrepreneurs network provide the entrepreneur the opportunity to apply tertius strategies and broker information amongst the contacts on different sides of a structural hole. An entrepreneur has control in the sense that the entrepreneur can decide what demands to connect and when to connect them while diffusing selective information strategically in order to obtain advantageous conditions (Brieger, 1995).

The information benefits of access, timing and referrals make it possible to better implement the

tertius strategy and increase the value of the tertius (Burt, 1992). In order for an entrepreneur to

successfully implement the tertius strategy an important condition is that the contacts that the entrepreneur brings together solely negotiate via the entrepreneur as the tertius. Therefore, having access to information allows the entrepreneur to gain better understanding of the resources and demands of his contact in order to identify possible value creating connections amongst them. Besides access to information the value of the tertius is further enhanced by the information benefits of timing and referrals. Having early access makes the bridging between contacts by an entrepreneur exclusive and thus more valuable. As mentioned earlier referrals can contribute to this effect by adding

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2.3 Structural holes & weak ties

Mark Granovetter (1973) wrote an influential and widely discussed article within sociology and network literature called ‘the strength of weak ties’. In his article Granovetter (1973) addresses the importance of the until then in empirical research often ignored social capital of weak ties. Weak ties are relationships with less familiar people and in which little time, emotional intensity, intimacy and reciprocal services are invested (Granovetter, 1973).

Granovetter (1973) argues that people tend to develop social relationships with people similar to themselves. Which is acknowledged in sequential research discussing the matter (Fischer, 1982; Marsden, 1987). Thus, these people tend to live in social clusters. Within these clusters everybody is likely to know each other and information is shared throughout the participating contacts (Granovetter, 1985). The contacts within a cluster and their relationships are mostly based on strong ties. Meaning that all the participants have access to the same information and resources that can be derived from the mutual cluster of contacts (Steier & Greenwoord, 2000).

Therefore, Granovetter (1973) argues that information with regard to new ideas, resources and opportunities must derive from network diversity by including weak ties. Furthermore, Granovetter (1973) argues that all bridges are weak ties. According to Granovetter (1973) it is possible for strong ties to be a bridge but only under the condition that all other ties in the connected clusters are weak. The structural hole theory of Burt (1992) elaborates upon the weak-tie theory of Granovetter (1973). Burt (1992) acknowledges the importance of weak ties to the traffic of information of otherwise disconnected clusters but also argues some shortcomings upon the weak-tie argument of Granovetter (1973).

First, Burt (1992) indicates that it is not the strength of a tie that is causing information benefits but the structural hole it relates to. Regardless of the strength of a tie, a tie will produce information benefits when the relation acts as a bridge over a structural hole (Burt, 1992). What matters is the non-redundancy of the information coming from the tie bridging the hole. This argument is illustrated in figure 2.1.

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Figure 2.1: General example of structural hole bridging.

Furthermore, putting emphasise on weak ties as the cause of information benefits neglects the control benefits which arise when connecting separated clusters. The structural hole theory of Burt (1992) takes both information and control benefits into consideration. As mentioned earlier this is necessary because control benefits enhance the information benefits coming from structural holes (Burt, 1992). Based on the above discussed theory the emphasis of an entrepreneur should not be on including weak ties to his or her network but rather on the maintenance of non-redundant ties who function as bridges across structural holes. The ties that function as bridges need to be nurtured and invested in, else the bridge will be just another weak tie (Burt, 1992). This results in the following proposition:

P1: The strength of a tie that spans the structural hole does not influence the information and control

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2.4 Structural holes & network closure

Until now this research has only discussed social capital generated through the presence of structural holes in ones network as proposed by Burt (1992). In contradiction to Burt (1992) other studies propose network closure as a crucial factor underlying social capital (Zaheer & Bell, 2005). The most influential study on social capital through network closure is developed by Coleman (1988, 1990). Closed networks can be described as dense networks meaning that everyone in the network is connected and exit behaviour is noted by the network (Burt, 2000).

Coleman (1988, 1990) argues that actors nourishing a dense network receive more benefits. In the first place it positively influences the access to information (Coleman, 1988, 1990). An actor can save time gathering information on interesting or relevant matters thanks to his or her close contacts who are following the specific matter and can provide quick updates. In addition, dense networks assist the progress of emerging sanctions that increase the trust amongst the contacts in the network

(Granovetter, 1985; Coleman, 1988, 1990; Granovetter, 1992). Thus, actors in a closed network can depend on shared norms and sanctions towards opportunism and consequently feel free to share information amongst the network (Coleman, 1988, 1990).

Burt (2000) elicits on the subject by noticing that network closure bears transparency amongst the contacts in the network and their actions. All the contacts know each other or have common contacts which makes the interaction between them observable (Burt, 2000). This transparency further enhances trust amongst the contacts in a dense network (Burt, 2000) because the contacts tend to expose socially desirable behaviour instead of opportunism (Lynch, 2002).

Zaheer and Bell (2005) conducted a research testing both the influence of structural holes as well as the influence of network closure on firm performance. The hypotheses formulated by Zaheer and Bell (2005) suggested a positive relationship of both factors on firm performance. The research supported the structural holes hypothesis and rejected the network closure hypothesis. Although the results of Zaheer and Bell (2005) are in the advantage of Burt’s structural hole argument (1992) the emphasis is on a different stage of entrepreneurial success than is the focus of this research.

Considering the founding stage it is very unlikely that an entrepreneur can rely solely on familiar contacts within his direct personal network cluster to gather sufficient resources and information to start a company. The building of bridges is necessary to complement the resources and information available in the dense network. Vice versa it is very unlikely that an entrepreneur relies solely on a structural holes bridging strategy when founding a company. An entrepreneur is inevitably embedded in a personal or dense network. Thus, relying solely on a structural holes bridging strategy would entail overlooking information and resources at hand in the dense network. There is no incentive for an entrepreneur to behave accordingly as it is inefficient.

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The structural holes bridging strategy and network closure strategy complement each other and need to be balanced (Burt, 2009).

This reasoning is supported by Shi, Markoczy and Dess (2009). Shi et al. (2009) state that tertius

gaudens and tertius iugens strategies are complementary rather than being in conflict. Tertius iugens

refers to an union strategy which entails assembling disconnected parties (Obstfeld, 2005). However, in contradiction to tertius gaudens which connects parties indirect via a broker by bridging a structural hole, tertius iugens closes a structural hole via the broker who connects the disconnected parties directly (Shi et al., 2009). The tertius iugens strategy shows resemblance with network closure in the sense of creating direct connections increasing trust, information and knowledge sharing amongst the involved parties (Shi et al., 2009). For example, an entrepreneur can carry out a tertius iugens strategy amongst disconnected fellow entrepreneurs to share knowledge and increase efficiency similar to the brokerage role of a coordinator as described in Shi et al. (2009). So, when facing a structural hole an entrepreneur has the option to close a structural hole through tertius iugens or bridge a structural hole through tertius gaudens. Since, this research views entrepreneurs as brokers with regards to structural holes the tertius iugens strategy is included in the conceptual model. It is relevant to also discuss network closure strategies and moreover to include tertius iugens to this research, as they prevent this research from ignoring the cooperative aspects of competition (Ghemawat & Rivkin, 1998).

Based on the theories of Burt (1992) and Coleman (1988, 1990) with regard to entrepreneurial success in the founding stage of a venture, this research expects an entrepreneur to benefit from both the bridging of structural holes as well as network closure. This results in the following proposition: P2: During the founding stage entrepreneurs rely on both network closure strategies as well as

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2.5 Structural holes & entrepreneurial success

In order to better understand the influences structural holes might have on entrepreneurial success in the founding stage it is necessary to gain more insights on what entrepreneurship entails before relating it towards entrepreneurial success. Theories and literature regarding entrepreneurship are still relatively young and have not reached the mature stage yet. This translates in the many definitions of entrepreneurship that are formulated in prior literature. A brief selection is made of definitions suitable to the view of entrepreneurs in this research.

An early definition is that of Schumpeter (1934): “An entrepreneur is a person who carries out new combinations that may take the form of new products, processes, markets, organizational forms and sources of supply. Entrepreneurship is then the process of carrying out new combinations”. This definition views the entrepreneur as someone who creates value as an innovator. The lack of Schumpeters’ view on entrepreneurship is that he does not acknowledge an entrepreneur as a risk bearer. In prior literature (Cantillon, 1979 (1755); Say, 1971 (1803)) as well as later literature the bearing of risk is noticed as inherent to an entrepreneur as an entrepreneur deals with uncertainty (Knight, 1971; Kirzner, 1973). Kirzner (1973) defines entrepreneurship as “the alertness to previously unnoticed changes in circumstances that may make it possible to get far more in exchange for

whatever they have to offer than was hitherto possible”. This definition is interesting because it highlights the alertness of an entrepreneur to relevant developments and an entrepreneurs’ ability to maximize benefits. Alertness is crucial for an entrepreneur in order to stay ahead of competition. In more recent literature Shane and Venkatamaran (2000) describe entrepreneurship as a process that focuses on the discovery, evaluation and exploitation of opportunities to create new products and services. This definition seems to contain the most relevant aspects of entrepreneurship and is in accordance with the positive aspects of the earlier discussed definitions. What is important with regard to the innovation and value creation resulting from entrepreneurship is that it needs to be innovative or valuable within the specific environment targeted. Something can already exist but can be innovative towards a different environment. Moreover, the value of a venture can only emerge if it connects people that were before disconnected (Burt, 2000).

The essence of entrepreneurship is connecting the separate parts which together lead to the creation of a new venture (Nohria, 1992). This applies to both high-tech start-ups as well as less technology intensive start-ups like a sportswear start-up (Burt, 2000). According to Burt (2000) when creating a new venture entrepreneurs automatically become network entrepreneurs by linking the dots and building bridges over structural holes. In order to build bridges over structural holes an entrepreneur needs to identify differences of evaluation (Stewart, 1990). This requires information from both sides of the holes. As mentioned before an entrepreneur can do this by utilizing his or her network (Burt, 1992). Thus, as noticed by Stewart (1990) entrepreneurs need to invest time, energy, sociability and travel in order to develop a rewarding personal network. A diverse and well spread personal network is

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often perceived by entrepreneurs as their most valuable asset (Stewart, 1990). The bridging of structural holes can contribute to the personal network of an entrepreneur by adding non-redundant contacts (Burt, 1992, 2000; Steier & Greenwood, 2000). This refers to the information and control benefits as discussed before where the entrepreneur acts as a tertius and bridges the structural holes. Now that entrepreneurship and the role of an entrepreneur with regard to the bridging of structural holes are discussed it can be related towards entrepreneurial success. There are multiple ways of measuring entrepreneurial success. The way entrepreneurial success is determined as dependent variable depends heavily on the stage of a new venture within the founding process that a research is aiming to investigate (Brush & Vanderwerf, 1992; Chandler & Hanks, 1993). One of the success measurement possibilities distinguished by Peter Witt (2004) is the completion of the idea and planning phase. As is made clear in the introduction this research aims at measuring entrepreneurial success of sportswear start-ups in the founding stage. Entrepreneurial success with respect to this research is obtained when an entrepreneur decides to realize his or her business idea and has gathered sufficient information and resources to actually thrive the business along the start-up phase. The likelihood of entrepreneurial success is then examined through the influences of structural holes bridging by an entrepreneur towards success. Based on the information and control benefits deriving from structural holes bridging (Burt, 1992) this research expects the bridging of structural holes to influence entrepreneurial success in the founding stage as formulated in the following propositions inspired by Burt (2000):

P3: Entrepreneurs bridging structural holes are associated with faster learning to identify the holes in

new situations.

P4: The bridging of structural holes by entrepreneurs provides a broad base of referrals to customers,

suppliers, alliances and employees.

P5: The bridging of structural holes by entrepreneurs contributes to the identification of promising

opportunities with respect to customers, suppliers, alliances, employees, financing, and alternative business models.

P6: The bridging of structural holes by entrepreneurs increases the probability that the entrepreneur

knows which of alternative ways to pitch the venture will most appeal to specific potential customers, suppliers, or other sources of revenue.

P7: The bridging of structural holes makes entrepreneurs aware of trouble sooner, more flexible in

re-shaping the venture to adapt to change, and more able to control the interpretation others give to information about the venture.

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2.6 Conceptual model

.

The independent variable in this research is structural holes bridging. The bridging of structural holes in this research concerns entrepreneurs exercising broker strategies. When facing a structural hole the expectation is that an entrepreneur either performs a tertius iugens or a tertius gaudens broker strategy. When performing a tertius iugens strategy the structural hole is closed and information is shared freely amongst the parties that involved the structural hole. This results in information benefits that

positively influence the dependent variable entrepreneurial success in the founding stage.

When performing a tertius gaudens strategy the structural hole remains and is bridged. Information is diffused strategically amongst the parties that involve the structural hole. Leading towards information as well as control benefits. Ultimately, the information and control benefits that emerge are expected to positively influence the dependent variable entrepreneurial success in the founding stage.

STRUCTURAL HOLES BRIDGING (BROKER) ENTREPRENEURIAL SUCCESS FOUNDING STAGE TERTIUS IUGENS TERTIUS GAUDENS INFORMATION BENEFITS CONTROL BENEFITS

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3. Methodology

In the previous chapter the theoretical framework alongside with the conceptual model are presented. The theoretical expectations that emerged from the literature research concerning the relationship between the independent variable and the dependent variable will be tested. In the current chapter the execution of this research will be discussed. First, the chosen research design will be stated.

Thereafter, the choices concerning data collection, the setting, sampling, data analysis, the operationalization and the quality of the research will be explained in more detail.

3.1 Research design

The research design that will be used for this research is a qualitative multiple case study. Until now, prior research regarding the bridging of structural holes and entrepreneurship is limited and has mainly focused on quantitative research. When prior research is limited it is best to apply a qualitative

research method (Edmondson & McManus, 2007). Vennix (2010) argues that it is the function of a case study to explore a phenomenon in depth. This is in accordance with the goal of this research. In this research the goal is to get more detailed insights and in depth knowledge on how structural holes are actually bridged by entrepreneurs in practice, and how they contribute to successfully founding a sportswear start-up. Case studies in particular are suited to examine how certain processes take place in a real-life context (Yin, 1989). This research relies for a large basis on the structural hole theory of Burt (1992). When testing a theory, as is the case in this research, the usage of multiple cases contributes to a stronger research (Vennix, 2010). The context in which entrepreneurs found their business is unique to every single entrepreneur. This also counts for the variety of information and resources they have at hand at the beginning of the foundation process. Therefore, it is necessary to involve multiple cases in this research in order to get more insights of how structural hole bridging is applied within a similar branch by different entrepreneurs.

Furthermore, this research will be conducted through an iterative process. A qualitative multiple case study lends itself to a holistic view (Vennix, 2010). This entails that the context must be well interpret by the researcher (Vennix, 2010). By implementing an iterative process the reliance on the common sense and interpretation of solely the researcher is reduced. After each interview the information gathered is analysed. If needed further literature research is held and possible adaptions to the

questionnaire are made. This iterative process prevents from excluding possible relevant factors from the research domain (Vennix, 2010).

Based on the above mentioned reasons a qualitative multiple case study seems most suitable for answering the research question.

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3.2 Data collection

This research makes use of two information sources. The first source of information are written sources. The theoretical framework derives mainly from literature produced by academic studies. Additional information is derived from fashion blogs and supporting websites.

The second source of information are individuals. In order to get more in depth knowledge regarding the research subject, the views of entrepreneurs in practice are relevant. An interview is an adequate method of data collection to capture the opinion of an individual (Vennix, 2010). In this research the standardised open-ended interview is applied. The questions are formulated beforehand and the sequence in which the questions are asked is also determined in advance. This way the respondents are guided towards providing relevant information concerning the research question, but still have the freedom to construct their own answers. The open-ended character of the questions contributes to the iterative process and holistic view of this research. Respondents can add information to their answers that suggests a revision of the explorative questionnaire. In contradiction, if a respondent adds to little information or is not answering the question probing is used to get the desired input from the

respondent (Vennix, 2010). Finally, all the interviews are face-to-face and recorded. This prevents possible relevant data from being lost.

3.3 Sampling

The sampling technique that is applied in this research is convenience sampling. The reason to choose for convenience sampling is that it is a fast an inexpensive way to gather respondents (Vennix, 2010). This is because of the accessibility and willingness to participate of the potential respondents. The potential respondents refer solely to sportswear or fashion related entrepreneurs in attempt to include entrepreneurs in the sample with a rather similar start-up process to that of a sportswear start-up. All the entrepreneurs in the sample have successfully realized their start-up and thus are able to share relevant content regarding this process. Convenience sampling is applied with the help of structural hole bridging (Burt, 1992). The network of the researcher with potential respondents and the

connections leading towards them was drawn. Based on the drawn network the contacts leading to the most qualified respondents were approached, regardless of the strength of the relationship. In the sociogram below, the sample of this research is illustrated.

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Figure 3.1: Sociogram of the sample distracted from network of the researcher

The respondents were reached through referrals from contacts of the dense network of the researcher. Eventually this has leaded towards three qualified respondents who were willing to cooperate. Some potential respondents distracted from the dense network of the researcher did not reply to the request or were unavailable at the time.

The other two respondents came from a structural hole bridged by a strong tie. Melvin van Leeuwaarde, marketing director at Belkin, is a strong tie of the researcher. However Melvin van Leeuwaarde is disconnected with regard to the researchers dense network. Melvin provided access towards his network resulting in three potential respondents. Eventually, two of the three potential respondents were included in the sample. The excluded respondent concerned an entrepreneur who took over the company and argued to have missed the initial start-up phase of the company.

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3.4 Operationalization

The theoretical definitions of the research variables are discussed in chapter 2. This section is concerned with the measurement of the variables translated into interview questions. The theoretical reasoning behind the interview questions is presented below.

Introduction

Hello, my name is Rinaldo Sobnath. I am a master student of the joint degree master entrepreneurship at the VU university and the University of Amsterdam. For the completion of my master thesis I need to collect data from successful entrepreneurs who have founded a sportswear (fashion) related start-up. My research question is as follows:

“To what extent does bridging structural holes influence entrepreneurial success in the founding stage (new venture creation process) of a sportswear (fashion) start-up in the Netherlands?”

The respondent is provided with a brief explanation of the structural hole bridging concept to get a better understanding of the goal of this research.

Background entrepreneur:

What is your age?

What is your highest level of education?

Can you tell me something about your working experience before becoming an entrepreneur? What is the name of your company?

What is the core business of your company? What are the characteristics of your product(s)? For how long are you in business?

Through these questions I can get more insights on the experience and expert level of an entrepreneur. Theoretical questions:

How did you come from your business idea to business realization? And how long did this process take?

How did you recognize the opportunity?

How did you make use of your network to gather resources during the founding process? How did you make use of your network to gather information during the founding process?

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With the help of these questions I hope to get more insights in the new venture creation process that leaded towards business realization. Emphasizing on the role that an entrepreneurs network played in the foundation process. First I ask a more general question to get a good picture of the new venture creation process.

Furthermore, so that I can better interpret the role of the network with regard to gathering information and resources. Ultimately this information needs to contribute to discovering the structural holes bridged during the founding stage by an entrepreneur. Since, the explorative character of this research, measuring structural hole bridging in a qualitative way, the goal of this question is to avoid from receiving too little input and context from the entrepreneur to discover structural holes.

Which network contacts were most beneficial during the foundation stage? (max. 5 contacts) How would you describe your relationship with them? How often do you have contact with them?

With the help of these questions I can understand which contacts of the network were valuable during the foundation and whether the contacts were based on a strong or weak tie relationship (Granovetter, 1973).

What is the connection between these contacts? Could you distinguish the contacts that are disconnected?

If so, do these disconnected contacts provide complementary information?

Disconnection between these contacts implies non-redundancy (Aldrich et al., 1986; McEvily & Zaheer, 1999). If the disconnected contact also provides non-redundant information than this might be a relationship bridging a structural hole. The more disconnected an entrepreneurs contacts, the more likely structural holes are present in his or her network (Burt, 2009).

What benefits (e.g., early access to skills, perspectives and resources) did you gain from this disconnected relationship?

With this question I measure whether the possible structural hole bridging relationship leaded towards information benefits as suggested by Burt (1992). If necessary, I will provide the respond with the following examples of information benefits extracted from theory (Burt, 2000).

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2. broad base of referrals to customers, suppliers, alliances and employees.

3. identification of promising opportunities with respect to customers, suppliers, alliances, employees, financing, and alternative business models.

4. increases the probability that the entrepreneur knows which of alternative ways to pitch the

venture will most appeal to specific potential customers, suppliers, or other sources of revenue.

5. aware of trouble sooner

6. more flexible in re-shaping the venture to adapt to change

7. more able to control the interpretation others give to information about the venture

Did you act as a broker with regard to information diffusion between you and the disconnected contact? Tertius gaudens (disunion) or tertius iugens (union)?

With this question I examine the broker strategy the entrepreneur used to gather information and (or) control benefits (Burt, 1992) from the structural hole.

3.5 Data analysis

In order to analyse the data in a meaningful way it is necessary to structure the data and reduce it (Vennix, 2010). All the interviews are recorded and then put on paper word by word. This results in data that contains redundant information. During the interviews it was noticed that the respondents provided long answers that sometimes answered multiple questions at once. Therefore, the answers provided by the respondents are first structured based on the question it answers. This makes it easier to code the answers since the questions represent measuring instruments of the variables. Coding refers to labelling the data based on the theoretical framework (Vennix, 2010). The codes used in this research are all derived from theory or relevant research findings. Therefore, the data analysis is a directed content analysis (Hsieh & Shannon, 2005). The coding of the data is then applied in thematic way which entails directed coding (Vennix, 2010). Thereafter, pattern coding is applied as this research attempts to discover similarities amongst the data gathered from the different entrepreneurs (Vennix, 2010).

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3.6 Quality of the research

In this section the quality of this research is discussed. The quality of the research is determined by discussing the reliability and validity of the research.

The reliability refers to the ability of the research method to reproduce the same data when this research is repeated (Vennix, 2010). In order to ensure the reproducibility of this research a standardized open-ended questionnaire is used. This brings structure in the interviews and reduces the bias of the interviewer. The interviewer has to follow the structure of questionnaire and is only allowed to use probing when insufficient data is provided by the respondent to answer the question. The interpretation of the researcher is constrained to the necessity for the use of probing while interviewing. To further reduce the bias of the researcher interpreting the data, member check is implemented. At the end of each interview the researcher provides the respondent with a quick summary of the most relevant findings at first sight. The respondent is then asked whether he or she agrees with the interpretations made by the researcher. If the researcher interpreted a structural hole to be present the respondent is asked whether he or she agrees with the presence and brokerage of the structural hole. Due to limited resources of time and money the sample did not contain as much respondents as desired. However, the entrepreneurs included in the sample have proven to be successful with regard to their business realization and have all started their business in recent years. Therefore, the five entrepreneurs represent a sufficient sample with enough experience and knowledge to extract in-depth qualitative data concerning structural hole bridging. At last, the quality of this research is enhanced due to triangulation. This research relies on written sources as well as interviews. If the multiple sources of data are in congruence then the propositions and findings of this research are empowered (Vennix, 2010). The validity of the research can be divided in internal validity and external validity. Internal validity refers to whether the research measures what is intended to measure. External validity refers to the ability to generalize the results derived from the sample (Vennix, 2010). To enhance the internal validity literature research is held. All the questions are derived from prior literature trying to measure structural hole bridging or are based on theories underlying structural hole bridging. After each interview the data provided by the respondents through answering the questionnaire was analyzed in order to check whether the questionnaire was accurate in measuring the variables. This holistic approach was necessary with regard to ensuring the validity of this research (Vennix, 2010). Prior research measuring structural hole bridging in qualitative way is extremely limited and the researcher did not have access to qualitative questionnaires used in prior research. Furthermore, after introducing the research question all the respondents were provided with a short explanation of what structural hole bridging entails. This was necessary because the respondents were not familiar with the concept and gained better understanding of the goal of this research. The external validity of the results emerging from this research is focused on entrepreneurs with fashion related start-ups that are founded in the Netherlands. Even though, this is a rather specific group, this

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still represents relatively large group of entrepreneurs and nascent entrepreneurs to which the results are applicable.

4. Findings

In this chapter the main findings of this research based on the data collection shall be discussed. First, the structural holes discovered in each case of the cases will be presented with the help of a simplified sociogram of the entrepreneurs network structure with regard to the structural holes being bridged. Of each case the influences emerging from structural hole bridging by the specific entrepreneur with the emphasis on the new venture creation process will be discussed. Thereafter, the results are compared with the emphasis on the propositions that are developed in the theoretical framework.

4.1 Daily Paper

Daily Paper is an Amsterdam based menswear label that offers ready-to-wear garments inspired by the African heritage of the founders. An interview was conducted with the co-founder and also designer of the brand, Abderrahmane Trabsini. During the interview three relevant structural holes that

contributed to the entrepreneurial success of Daily Paper were discovered.

The first structural hole was bridged because of the visit to a fashion fair in Germany without having a tangible product. Here Abderrahmane met Stephane Ashpool who owns a shop in Paris called Pigalle and was a potential retailer. The tertius strategy performed by Abderrahmane with regard to structural hole was tertius iugens. They shared information freely and were supportive towards each other as entrepreneurs. “If you like each other, you help each other”(R1). Later on when Daily Paper needed their products to be stocked by retailers Stephane immediately stocked them which

simultaneously created awareness of the brand Daily Paper on an international level. “We went to

Paris with our samples and Stephane immediately wanted to stock our products” (R1). Being stocked

is crucial in the start-up phase of a fashion brand. The structural hole was closed due to tertius iugens. Abderrahmane metions: “At that moment he became a direct contact” (R1).

The second structural hole in the social network of Abderrahmane is also closed with the help of a tertius iugens brokerage strategy. A music artist, YellowClaw, approached Daily Paper with the question to borrow a shirt for a video shoot. This provided Daily Paper a lot of publicity leading towards potential customers and other artist that wanted to be dressed by them. Besides that, the until then disconnected contacts decided to cooperate and create a collection together. “We sat down for a

meeting and the artist proposed a collaboration” (R1). Since, the collaboration proved to be a success

the collaborative clothing line is now a permanent part of the Daily Paper collection based on a tertius

gaudens strategy. As Abderrahmane mentions: “We could have also decided to left the opportunity to waste after the first time” (R1). The structural hole bridging in this case provided Daily Paper with

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referrals and the exploitation of an opportunity during the start-up phase that accelerated their entrepreneurial success with regard to this stage.

The third structural hole bridged in the network of Abderrahmane emerged through a referral by a weak tie called Kennedy that lived in Jakarta and had interviewed Abderrahmane for his

magazine once. While on holiday in Jakarta, Kennedy met up with Abderrahmane and referred him to woman who was an expert with regard to distribution in Asia. “He knew someone who was familiar

with distribution in Asia” (R1). Kennedy provided access towards his network and set up a facetime

meeting. “I had a facetime meeting with her. It was really short” (R1). This has provided

Abderrahmane with non-redundant information with regard to warehousing in Asia and referrals to potential customers. “She was able to help with potential customers in Asia” (R1). Furthermore, Abderrahmane said: “She provided us with a lot of insights and logistic tricks” (R1) and “She asked us

why don’t you guys have a warehouse in Hongkong? Since, our production is done in Asia this would be way more efficient with regard to the Asian market” (R1). Abderrahmane relied on a tertius

gaudens strategy as he was able to benefit from the access to the network of Kennedy while remaining

the structural hole between him, Kennedy and the expert. In the sociogram below the structural holes are illustrated.

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Figure 4.1: Structural hole bridging by Abderrahmane Trabsini (Daily Paper)

4.2 JamJam PR

JamJam PR is a public relations agency with an physical and online showroom that needs to generate free publicity for their customers, in this case brands. JamJam PR is founded by Danny le Bruyn. When founding his business Danny relied heavy on his dense network and applied network closure. “I

have chartered everyone that might have been helpful” (P2). Elaborating on the argument Danny

mentioned: “PR is networking. I got my first customers through my personal network. This gave me

the confidence to start” (P2).

However, Danny also applied structural hole bridging during the foundation of his start-up. With regard to his business plan he used the help of co-writer who he had met at an conference for people who received an unemployment benefit and were interested in entrepreneurship. “The person

that helped writing my business plan I just met at an unemployment conference” (P2). As Danny did

not wanted to do research and relied on his idea he performed a tertius gaudens brokerage strategy to get the job done. The co-writer provided Danny with non-redundant information complementing his business plan. As Danny mentions: “Where I lacked the effort, she put in the work and did thorough

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research resulting in complementary information” (P2).

Furthermore, Danny benefitted from structural hole bridging in the founding stage through a

tertius iugens broker strategy. Danny saw the opportunity to benefit from the network of JamJam

Marketing and aimed at collaboration.“From start I was looking for a collaboration. Since my PR

agency had to potential to be an extension to JamJam Marketing” (P2). The tertius iugens strategy

resulted in a collaboration, where Danny could fully benefit of their knowledge, contacts and clientele. Besides that, Danny managed to make use of the reputation good reputation of JamJam Marketing by starting on their name which positively influences referrals. “And that is why I started under their

name. So, I fully benefitted from their knowledge” (P2). In the figure below the brokerage with regard

to structural holes is illustrated.

Figure 4.2: Structural hole bridging by Danny le Bruyn (JamJam PR)

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The Dutch Hatter is a brand specialized in high quality hats for men. The Dutch Hatter is founded by Armando Kitoko. With regard to founding stage of this start-up, two structural holes bridged by Armando can be distinguished.

The first structural hole bridged was bridged through the help of social media. “Social media

played a huge role. Through social media people saw my work” (R3). Armando used to post

customized hats online. And at a certain point he got approached by an agent called Jennifer. Jennifer was a disconnected contact until then. “Jennifer approached me that she wanted to help launch my

work on a global level. At the time I did not know her at all” (R3). Armando decided to work with her

and relied on a tertius iugens broker strategy with regard to structural hole. “We had an immediate

click and I would describe her as family” (R3). Thus, the structural hole is closed. Jennifer provided

Armando with a lot of nun-redundant information that pushed Armando and his start-up in the right direction during the founding stage. As Armando mentions: “She was very helpful and shared her

refreshing knowledge. Also she brought me in contact with large companies and suppliers” (R3).

Another benefit that emerged from the relationship was guidance on how to pitch The Dutch Hatter.

“She told me on which marketing aspects I should focus, and how I need to present my brand and to who. This was very beneficial for my brand” (R3). Furthermore, Jennifer helped Armando to organize

an event which have led to bridging of the second structural hole.

The second structural hole is based on a weak tie relationship developed with a shoe supplier at the opening of his concept store were Armando showed samples. “We organized an opening where

bloggers and international guests attended to. Here I came in contact with a shoe supplier who knew one of the best hat suppliers located in Spain” (R3). The weak tie provided Armando with a relevant

referral. After a call Armando visited the supplier and got full tour through the production process. “Until now everything is going fine and I still work with the same supplier”. A tertius iugens strategy was applied by Armando closing the structural hole between him and the supplier. The structural holes are presented below.

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Figure 4.3: Structural hole bridging by Armando Kitoko (The Dutch Hatter)

4.4 BoldLabels

BoldLabels is a distributer in lifestyle watches. BoldLabels distributes eight brands of which one brand is founded by the owner of BoldLabels Ashwin Blauw. When founding BoldLabels Ashwin relied heavily on his dense network. For example: “I hired a friend for a friendly offer who was good

at PR and I gathered legal advice from friends with a legal background” (R4). Furthermore, he was

introduced to the opportunity of distributing watches by a colleague and got information from his brother who is also an entrepreneur.

However, with regard to the brand BoldLabels developed themselves Ashwin bridged a structural hole with the man behind a familiar Swiss brand. Ashwin was aware of the fact that this man was a production expert in China. Ashwin applied a tertius iugens strategy to broker the structural

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hole. The entire production process is outsourced to the production expert which requires transparent diffusion of information. “We have a guy over there who handles everything” (R4). Furthermore, Ashwin mentions: “I asked him can you take care of the production process? He is still doing the job” (R4). Ashwin had developed a lasting relationship with the production expert that proved to be

beneficial as the production expert handles the gathering of resources to produce the watches. This structural hole that is closed is illustrated in the sociogram below.

Figure 4.4: Structural hole bridging by Ashwin Blauw (BoldLabels)

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4.5 Distinct Cotton

Distinct Cotton is fashion start-up focused on upper wear for men. For this research one of the co-founders Sven Klaassen was interviewed. Two structural holes that were relevant in the founding stage can be distinguished.

The first structural hole being bridged is based on a tertius iugens brokerage role. Sven

Klaassen came in contact with a fellow experienced entrepreneur. “While working at Suit Supply I had

a chat with Guillaume Philibert the founder of Filling Pieces. He noticed my interest and invited me at his office” (R5). Thus, a tertius iugens broker strategy was applied. Guillaume provided Sven with

nun-redundant information. “That has been very valuable, because I have heard and learned a lot at

that meeting” (R5). Sven was especially informed on the potential obstacles and problems that might

appear during the founding process. “Guillaume told me that at a certain point he had a gap of

200.000 euros because stalled payments of retailers.” (R5). Furthermore, Sven gained information on

re-shaping and the importance of flexibility of a venture. “He also did not know how to make his

company grow. So, he hired a commercial director who further developed this business to what it is today” (R5). Sven confirmed this as being nun-redundant information by saying: “That is something I have learned. You can’t do everything on your own. Sometimes it is worth it to invest” (R5).

The second structural hole being bridged during the new venture creation process by Sven Klaassen refers to the acquisition of a supplier. In order to find a supplier Sven had to look beyond his dense network by placing a request on AliExpress, a platform witch connect entrepreneurs with suppliers all over the world. “We just placed a request, with what we intended to do with the product

alongside with our demands. And within one day 180 suppliers responded” (R5). This allowed Sven

to perform a tertius gaudens strategy to select the best option. “In the end, four potential suppliers

remained. We ordered samples and elaborated on the best option” (R5). The structural holes bridged

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Figure 4.5: Structural hole bridging by Sven Klaassen (Distinct Cotton)

4.6 Similarities

The figures illustrating the structural holes bridged by the multiple entrepreneurs during the founding stage show that the strength of a tie has no influence on the benefits derived from the structural hole. The strength of the relationship that spans the structural hole and the benefits coming from it varies consistently. So, there is no clear implication that it effects the benefits emerging from the hole which is in line with the first proposition (P1).

With regard to the second proposition (P2) the findings of this research are also supportive. As can be viewed in Appendix C, which provides an structured overview of the codes of all the

respondents, all the entrepreneurs rely on both network closure as well as structural hole bridging strategies during the founding stage of their start-up.

However with regard to the third proposition (P3) no supportive evidence was found. Entrepreneurs proved to learn faster due to knowledge sharing and the diffusion on nun-redundant information over the bridges. But the entrepreneurs in this sample did not showed faster learning with

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regard to identifying structural holes in new situations. In the case of BoldLabels for example Ashwin Blauw relied solely on network closure when discovering the option to bridge the structural presented in figure 4.4. So, the faster identification of structural holes and the bridging of structural holes do not seem to be a linear causality.

With regard to the other propositions (P4, P5, P6 & P7), which all refer to information benefits, every proposition is supported by evidence of at least one case. As mentioned before all entrepreneurs start in a different context with different resources available at hand. This leads to varying benefits amongst the entrepreneurs as structural hole bridging is done complementary to the resources coming from the dense network due to network closure. Given the scope of this research the presence of evidence in at least one case is sufficient as evidence supporting the proposition.

The effect of structural hole bridging on entrepreneurial success in the founding stage : emphasis on sportswear (fashion) related start-ups