Getting wired for innovation: An analysis of the advice networks of software entrepreneurs

Abstract

Purpose

The purpose of this article is to examine the nature and influence of entrepreneurs' advice networks on the innovative performance of their companies from both economic and social perspectives. Specifically, it aims to address three research questions: Does information typically flow both ways in advice dyads? How important is trust in these relationships? What is the ideal structure of an advice network?

Design/methodology/approach

As part of a larger study, executives at 20 entrepreneurial software companies in the Greater Pittsburgh, Pennsylvania, region of the USA were interviewed in person to determine the nature and structure of their advice networks.

Findings

The executives reported sharing business and technical advice with their contacts, both within and outside of their own organizations. Entrepreneurs who maintained diverse, uncommonly connected advice networks led organizations that were perceived as more innovative than those with more densely connected networks.

Research limitations/implications

Future studies should examine these research questions in economic and cultural settings outside the USA, and examine the influence of advice‐network size and different network environments on advice‐network value and productivity.

Practical implications

Entrepreneurs should be careful to not take trust in these networks lightly.

Originality/value

Entrepreneurs may be able to leverage their advice networks for maximum innovation by adding new advice contacts not connected to their current advice contacts. Entrepreneurs should be careful to not take trust in these networks lightly.

Citation

McGrath, C.A., Pate, L.E., Gray, E.R. and Vance, C.M. (2006), "Getting wired for innovation: An analysis of the advice networks of software entrepreneurs", International Journal of Organizational Analysis, Vol. 14 No. 4, pp. 317-330. https://doi.org/10.1108/19348830610849727