The Power of Alumni Networks - Success of Startup Companies Correlates with Online Social Network Structure of its Founders

28 Pages Posted: 13 Jan 2010  

Stefan Nann

University of Northwestern Switzerland

Jonas S. Krauss

University of Northwestern Switzerland

Michael Schober

University of Cologne

Peter A. Gloor

Massachusetts Institute of Technology (MIT)

Kai Fischbach

University of Bamberg

Hauke Führes

University of Cologne

Date Written: January 11, 2010

Abstract

In this paper we analyze the success of startups in Germany by looking at the social network structure of their founders on the German-language business-networking site XING. We address two related research questions. First we examine university-wide networks, constructing alumni networks of 12 German universities, with the goal of identifying the most successful founder networks among the 12 universities. Second, we also look at individual actor network structure, to find the social network attributes of the most successful founders. We automatically collected the publicly accessible portion of XING, filtering people by attributes indicative of their university, and roles as founders, entrepreneurs, and CEOs. We identified 51,976 alumni, out of which 14,854 have entrepreneurship attributes. We also manually evaluated the financial success of a subsample of 80 entrepreneurs for each university. We found that universities, which are more central in the German university network, provide a better environment for students to found more and more successful startups. University networks whose alumni have a stronger “old-boys-network”, i.e. a larger share of their links with other alumni of their alma mater, are more successful as founders of startups. On the individual level the same holds true: the more links founders have with alumni of their university, the more successful their startup is. Finally, the absolute amount of networking matters, i.e. the more links entrepreneurs have, and the higher their betweenness in the online network of university alumni, the more successful they are.

Keywords: entrepreneurship, online social networks, founder networks, startup success

Suggested Citation

Nann, Stefan and Krauss, Jonas S. and Schober, Michael and Gloor, Peter A. and Fischbach, Kai and Führes, Hauke, The Power of Alumni Networks - Success of Startup Companies Correlates with Online Social Network Structure of its Founders (January 11, 2010). MIT Sloan Research Paper No. 4766-10. Available at SSRN: https://ssrn.com/abstract=1534699 or http://dx.doi.org/10.2139/ssrn.1534699

Stefan Nann (Contact Author)

University of Northwestern Switzerland ( email )

Brugg
Switzerland

Jonas S. Krauss

University of Northwestern Switzerland ( email )

Brugg
Switzerland

Michael Schober

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Peter A. Gloor

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Kai Fischbach

University of Bamberg ( email )

An der Weberei 5
Bamberg, 96049
Germany

Hauke Führes

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

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