Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure

This work takes a structuration view of entrepreneuring in online social networks.  Social capital theory informs the idea that network entrepreneurship is a function of brokerage and closure qua agency and structure, respectively.  The purpose of this undertaking is to extend existing theory to the emerging phenomenon of network entrepreneuring as it applies to a little understood, yet rich in potential, area of social action, online networking.  The importance of this contribution is to extend existing theory to, and indicate the empirical potential of, online social networks, while revealing the entrepreneurship dynamics that are essential to the networks’ formation.


In online social networks, connecting strangers is entrepreneuring.  Wikipedia defines a virtual community as “a social network of individuals who interact through specific media, potentially crossing geographical and political boundaries in order to pursue mutual interests or goals. One of the most pervasive types of virtual community includes social networking services, which consist of various online communities.[1]”  Using the internet to enable individuals the traversal of boundaries defines network entrepreneurship; successful entrepreneuring results in online social networks.   
Online social networks have come a long way from the early days of Usenet, the worldwide-distributed discussion system organized by subject, yet we know little about how the role of the network entrepreneur.  Today’s online social networks represent the “ new era of democratic and entrepreneur networks and relations where resources flow and are shared by a large number of participants with new rules and practices” (Lin, Cook et al. 2001). Facebook, arguably the most successful online social network to date, boasts an active membership in excess of 500 million, that spends over 700 billion minutes per month on its website as reflected also by the “over 900 million objects that people interact with (pages, groups, events and community pages). [2]”  Flickr, an online network of photography enthusiasts reported on its blog that it hosted 5 billion photos as of September 19, 2010.[3]  As well, by January 2011, LinkedIn, the online networking site for professionals, has reached over 90 million members at a membership rate of one new member per second.[4]  These data points suggest that online networks are emerging as an important social phenomenon whose implications can hardly be overstated, yet we are only beginning to grasp. 
The internet, as network of networks, makes it trivial to set up networks, yet people do not seem to simply aggregate in online social networks.  This is the role of the network entrepreneur, to identify the networking opportunity round a social focus, and create the social network accordingly.  The current work is a theory driven exploration that considers the entrepreneurial opportunity in online social networks as interplay between agency and structure.  The thrust of the theoretical argument is one whereby the perception of value between brokerage and closure explains, and is explained by, the structural evolution of the social network.  The contribution is a model describing entrepreneurial opportunity in online social networks.
 This work continues by theoretically positioning network entrepreneurship as a structuration process whereby the entrepreneur is prompted by network structure and associated perceptions of value into action.  Next, the connection between network structure and value is made by means of social capital.  After a summary of the relations along network structures, types of social capital and network actions is created, the whole analysis is redone in the particular context of online social networks, which change the prior relations among structure, value and action.  Next, a couple of examples from Flickr illustrate different alignments along structure, value and action.  In closing, there is the section discussing the results and evaluation the methodological implications for future research.

[1] http://en.wikipedia.org/wiki/Virtual_community
[2] http://www.facebook.com/press/info.php?statistics  Accessed January 20, 2011. 
[3] http://blog.flickr.net/en/2010/09/19/5000000000/  Accessed January 20, 2011.
[4] http://press.linkedin.com/about/ Accessed January 20, 2011.

Setting the Stage for Empirical Research in Virtual Social Networks

This work sets the theoretical stage for future empirical investigations of the socio-economic dynamics in virtual social networks (VSN), at member and network entrepreneur levels.  In so doing, I start by identifying the empirical loci, Flickr and LinkedIn, justify and describe the choices.  A model of the utility function of the generic VSN member is followed by descriptions of the value dynamics for each VSN, which in turn create the premise for an economic model of VSN as platforms for multi-sided markets.  The model is built by considering several theoretical angles from the perspectives of microeconomics and sociology of networks.  The contribution is in extending theoretical and empirical insights across disciplines and fields with the idea of exploring and understanding the emerging VSN-phenomenon.

Complementarity of Industry-level vs. Firm-level Factors Leading to Consolidation in the ERP Industry

Three firms control now 43% of the enterprise software applications market, whose growing revenue is projected by Gartner to surpass $253.7 billion in 2011.[1]  This level of industry concentration is part of an ongoing trend that characterizes the declining stage in an industry lifecycle model (Porter 1980). As such, the research opportunity is to build a formal model to explain the industry factors leading up to such high levels of concentration, while being able to capture firm level strategies as well.  Moreover, given the magnitude of change in a relatively short period of time in this industry, the transformation that is still going on makes for a quasi-natural experiment, whereby the researcher can test theory driven hypotheses. 

It is my objective in undertaking this work to build a testable model that answers the following research question:  What are the industry-level vs. firm-level factors leading to industry consolidation in the enterprise software applications industry?  The immediate contribution would be to establish conceptual and methodological linkages between industry and firm level factors leading up to consolidation higher concentration.  In other words, a potential contribution is to expose the often-ignored ‘conduct’ part in the structure-conduct-performance paradigm.  At a later stage, the model is to be tested not only on the focal industry herein, but also on other industries.

The industry level working hypothesis is that a significant decrease in environmental munificence triggers both the emergence of a dominant design, and a shakeout in the industry (Utterback et al. 1993; Klepper et al. 2005).  The emerging dominant design in the enterprise software industry realizes platform economies—of scale, scope and skill—by vertically integrating complementary assets (Teece 1986; Rothaermel et al. 2005).  The formal model suggests that the enterprise software applications market tends to settle towards the Bertrand equilibrium around the marginal cost of the most efficient player.

[1] Gartner is one of the top information technology groups of industry analysts.  The source of this quotation is at: http://www.gartner.com/it/page.jsp?id=1535314


When the world runs short of excuses

Attending a conference on entrepreneurship, there was a contest whose finalists included a team entrepreneuring a new idea for a dating website:  Dinner for 6.

This is obviously a great idea, and that's not because there are not already too many dating sites out there, but because it gives people a plausible excuse to get together about, and round, fundamentals.

In a world debased of meaning, where people go to great lengths as if to avoid addressing the fundamentals, we need a good pretext or alibi to reengage more than ever.  

Using her sickness as a pretext

Using her sickness as a pretext

Accession Number: 1990:755
Display Title: Using her sickness as a pretext
Suite Name: 
Media & Support: Opaque watercolor and gold on paper
Creation Date: ca. 1760
Creation Place/Subject: India
State-Province: Rajasthan
Court: Kishangarh
School: Rajasthani
Display Dimensions: 6 11/16 in. x 5 7/16 in. (16.99 cm x 13.81 cm)
Credit Line: Edwin Binney 3rd Collection
Label Copy:

There is much poetry devoted to the heroine sick with love. Here three women attend a reclining maiden. One, dark of skin, stoops to embrace the stricken lady, and the two lock gazes. Is it a love game, so often played by the gopis, where, in Krishnas absence, they pretend to be him? Has the dark-skinned girl been chosen to lighten the heart of the love-sick girl by pretending to be Krishna coming to the bedside of his beloved? """