Do network dynamics undermine idea-based network advantages? Experimental results from an entrepreneurship bootcamp∗ Rembrand Koning Harvard Business School August 29, 2016 Abstract Do networks plentiful in ideas provide early stage startups with performance advantages? On the one hand, network positions that provide access to a multitude of ideas are thought to increase team performance. On the other hand, research on network formation argues that such positional advantages should be fleeting as entrepreneurs strategically compete over the most valuable network positions. To investigate these competing views, I embed a field experiment in a startup bootcamp to test if networks that are plentiful in ideas lead to sustainable network- based performance advantages. Leveraging data on each participant's creative potential, I use peer randomizations and detailed data on network formation to show that ties to more creative individuals improve team performance. Despite the performance benefits of such connections, I find little evidence that entrepreneurs strategically connect to others who have greater cre- ative potential. Instead, entrepreneurs seek feedback from others on dimensions that are more socially salient and verifiable. Beyond providing causal evidence for the durability of network- based performance advantages, these findings provide micro-level support to the importance of knowledge spillovers within bootcamps, accelerators, and startup ecosystems more generally. ∗Please direct correspondence to
[email protected]. This work has benefited from excellent feedback provided by sem- inar participants at Stanford GSB, Northwestern Kellogg, Chicago Booth, Michigan, Duke Fugua, HBS, Wharton, Berkeley, INSEAD, MIT's Conference on Digital Experimentation, the 2014 Conference on Computational Sociol- ogy, Airbnb, and Google. Special thanks to everyone who made the bootcamp happen, especially Ponnurangam Kumaraguru and Randy Lubin.