October 19, 2010
Social Media To Produce More Entrepreneurs?

Facebook isn't as shallow and meaningless as it seems? Social media will drive more people to network with friends and business contacts and ultimately to start their own businesses? Social media will reduce the power of big corps and empower small businesses?

Superficial contacts on Facebook, apparently unnecessary comments, and banal status updates may be more worthwhile than we think. This is shown in a new report from the National IT User Center. The report also predicts the new social media will ultimately lead to more individual entrepreneurs.

Many people are critical of those who collect hundreds of so-called friends on Facebook. Often the majority of these "friends" are old classmates, acquaintances of acquaintances, and the like, relationships that are fundamentally weak. The comments and updates of relatively banal nature that appear on Facebook have also generated a great number of snide remarks, not least in the media, in recent times. But a report compiled by Håkan Selg, a doctoral candidate at the Department of Information Technology, Uppsala University, reveals that these contacts in fact constitute highly useful networks, networks that make use of the ostensibly meaningless comments and updates.

Just the sense of being well connected might give more people the confidence to start their own business. If they spend more time relating to others this might be social skills exercise and confidence-building that emboldens people to start businesses. Seem plausible?

"The portrait, comments, and updates provide constant reminders of the existence of 'friends.' The content is not all that important, but the effect is that we perceive our Facebook friends as closer than other acquaintances who are not on Facebook," says Håkan Selg.

What I wonder: Have Facebook and other social media made us perceive to be more closer to more people than was previously the case? The internet makes one virtually closer to a far larger number of people. So are more connections formed and more interactions happening as a result?

I am curious to know whether LinkedIn causes people to change jobs more often and to try harder to get ahead. Does the ability to maintain business contact links that persist beyond the time one leaves a company cause a person to move ahead faster and do more business deals?

Share |      Randall Parker, 2010 October 19 11:50 PM  Comm Tech Society

Lono said at October 20, 2010 10:02 AM:

Yeah - I don't currently participate in Facebook or Twitter - but I like Linked In for it's utilitarian interface - and it has already helped me establish some potential job leads - and made me a little more serious/interested in business networking.

Overall social networking - like all networking - is basically a win.

It is irritating to me that Mensans can not seem to get their act together in this regard - as they don't yet - as a group - recognize its enormous collective power.

(the fact that lots of Mensans are aspies doesn't probably help in this regard)

I'm not trying to be pretentious - but I just can't stand networking with people who are constantly distracted by the bread and circuses out there...

It'd be cool if you could have some kind of effective social networking amongst those who frequent your blog here Randall - but small scale networking apps always seem to devolve into glorified chat rooms from what I have seen.

Jake Sigal said at October 20, 2010 11:54 AM:

I think that LinkedIn is a big double edged sword. I was having a conversation with a DJ and good friend of mine who is a professional headhunter during the day. He was telling me a major concern in the staffing industry is people just making up experience to try to get ahead. I think that somehow in the last 10 years Americans feel that they have to keep climbing the corporate ladder to the point where they are CEO... (in general, not in all cases)

I think it's more important to be great at what you do and become a master at that trade. For some it may be becoming a CEO or entrepreneur. However for most it's not (and can't be.)

I know many companies look on LinkedIN before hiring or just "google" people to learn more about them and it's natural. I think this is especially the case with anyone working in business development as you want to know who they know.

The problem is that LinkedIN can only show you the quantity of people that have clicked "accept", not the quality of people that someone has a meaningful relationship with. How many of you when leaving a company have "LinkedIN-ed" with everyone in the office? For me LinkedIN is a great way to find out who you know at certain companies and I usually call and ask for an introduction (inside->out). However (outside->in) LinkedIN can be very misleading and probably devalues relationships.

For the comment on confidence boost, anything that makes you feel better and doesn't hurt anyone has to be a good thing IMO.


Phillep Harding said at October 20, 2010 12:56 PM:

Social media certainly helps people pick up skills they need for future tech; they practice and learn under relaxed conditions, a great help. Even if the social media, by it's self, turns out to be useless, those skills are not.

(MENSA? I qualified for membership. Did a little research, and ran for the door. Some ideas are so dumb that only a genius can come up with a reason to believe them, and MENSA is full of geniuses.)

Randall Parker said at October 20, 2010 6:39 PM:


I've thought about creating discussion forums on this web site. But I'd need volunteer sysops to keep threads from getting into insult-fests or full of spam.

The problem is how to control quality. I see this with Facebook. I like a lot of my high school and grade school friends. But a few just post lots of trivial details about their lives. GMAFB. What's needed to make a high brow social media site? I wish I knew.


Yes, some very talented people I know have few LinkedIn connections. It tends to be ambitious glad-handers who are looking for an easy way up that try to connect with everyone they've ever met. I tend to only want to connect to people who I'd recommend or who I want to stay in touch with. But if someone I work with wants to connect what am I supposed to do? Reject them? It is awkward. Tiers are needed. But even tiers become visible.

In informal conversations the most talented people I know will talk out with each other who is good at what among all the people we know. But we aren't going to put that discussion up on a web page. Yet that's the core stuff that one needs to hear to judge someone.

Leroy Hurt said at October 21, 2010 1:57 PM:

Thanks for sharing. The challenge will be whether these new entrepreneurs can make a living wage. Since such technology will lower the barriers to entry, the increased competition will drive down costs and wages.

The opportunity comes when coupled with developments like the variously named 3D printing, desktop fabrication, and virtual manufacturing. The potential is in ad hoc multi-disciplinary teams forming virtually around a product to create an ad hoc vertically integrated enterprise that disbands when no longer needed. Or perhaps parts of the ad hoc enterprise disband as soon as that part is no longer needed. For example, when a product goes to market, the large design team disbands because not as many specialists are needed for supporting a deployed product.

Among complications to that end state, these come to mind:

Ad hoc enterprises will likely have higher transaction costs than established enterprises and therefore will have difficulty competing unless the product commands a significant premium.

How will the government view such ad hoc teams? If the practice becomes commonplace, such teams will epitomize the contingency workforce. Will the government then decide team members require protection from getting dropped from the roster so easily?

Aaron Sylvan said at October 21, 2010 2:21 PM:


Starting a small business requiresbringing together many resources of all different kinds - and often advisers, too. Facebook can allow (a) for us to SEE the untapped resources around us, and (b) to actually ACCESS those resources. It makes it easier for everyone.

Also, starting a business can be a lonely experience, since often the closest friends/family may be unsupportive. Facebook allows us to find more of our supporters from within the masses.

Wheat said at October 21, 2010 2:42 PM:

Social media may very well produce more entrepreneurs, though I would wager the vast majority will not be 'successful' entrepreneurs.

Michael Buckley said at October 21, 2010 2:48 PM:

Yes, it has in my case! Via Kickstarter and with help from Facebook ads, I
was able to raise all the funding (over $4K) I needed to turn my webcomic
into a book, which will go to press at the end of the year. Without these
two sites, I wouldn't have had the need to file for a tax ID, which I just
did this afternoon. I'm a reseller now––a real business, even!––and so
don't have to pay tax on the printing.

I love living in the 21st century.

Michael Buckley

Toil and Toil Books
PO Box 414146
Kansas City 64141

FrancisT said at October 21, 2010 11:57 PM:

>Wheat said at October 21, 2010 2:42 PM:
>Social media may very well produce more entrepreneurs, though I would wager the vast majority will not be 'successful' entrepreneurs.

The vast majority of current entrepreneurs are not successful - or at least not the first time - and many end up as total failures, the rest tend to kinda sorta limp along as almost breakeven. I don't see this changing.

What will change (is already changing) is that the upfront cost to creating a new product/service from an initial idea has dropped drastically, as has the cost of marketing it and selling it. Nowadays you can start a business with part time help from a dozen friends (or Facebook/linkedIn etc. associates) and no more than a few hundred dollars of initial investment. Most of these ideas will fail but the cost of discovering this is far lower. And that is surely an overall benefit.

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