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Entrepreneuring In Social Networks

Entrepreneuring In Social Networks

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



Abstract
This paper 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.

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



Abstract
This paper 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.

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Entrepreneuring In Social Networks

  1. 1. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure Abstract This paper 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. Introduction 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 1 http://en.wikipedia.org/wiki/Virtual_community Page 1 of 19
  2. 2. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh 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. Theory Social networks present alert agents with entrepreneurial opportunities rooted in arbitrage.5 To reveal the entrepreneurial opportunities in online social networks, we take a socio-economic approach, which rests on two assumptions. First, the type of network value the 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. 5 The entrepreneurial opportunity rooted in arbitrage was defined by Kirzner who considers entrepreneurship to be “alertness” to, and discovery of, buy low sell high opportunities, followed by profitable action or arbitrage (1973: 31,32,67). Page 2 of 19
  3. 3. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh agent seeks to realize is a function and determinant of network structure. Network members may value any combination, and/or extent, of setting up or joining communities of interest, and increasing the number or the intensity of social relations. Network structure constraints and enables the type of value available to network members, usually in terms of content and socializing. Once value is realized, network structure may change, depending on the type of action undertaken by the agent. Second, the network members are Giddens’ reflexive agents who possess “the evaluative judgment of conduct” and monitor their own actions (Giddens 1986). Those reflexive agents who perceive and decide to pursue structural opportunities toward establishing communities of interest are the entrepreneurs of the online social networks. While not going into individual-level motivations for how the reflexive agents decide to pursue value, we keep the analysis at the level of the generic agent whose actions are observable elements of network structure. If the relative position of the network members and the type of relations between them are the sociological observable patterns in a network, and the value choices of the agent(s) determine the evolution of the network, the idea is to capture the interplay between these observables in a model recognizable in practice. This dynamic describes a structuration process between network structure and network members’ agency (Giddens 1986), as illustrated in the next figure: Advantage: Closure Network Reflexive Agent Structure agent Action Advantage: Brokerage Page 3 of 19
  4. 4. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh According to Giddens, [network] structure is the medium and outcome of the conduct it recursively organizes, while agents reflexively monitor their own actions within the structure. The recursive nature indicates a longitudinal process that can be in any state; of action prompted by value perceived in network structure, which changes or maintains network structure depending on the perception of value. For Giddens, structures are rules and resources, or process and outcome, a view similar to that of social capital. Next, we introduce the concept of network structure as it relates to social capital. Network-Structure, -Value, and -Action Borrowing from graph theory, social networks are defined as social structures made up of agents, individuals or organizations, called nodes, which are connected by one or more types of relationships, called ties. Granovetter classifies the network ties by their strength, “a (probably linear) combination of time, the emotional intensity (mutual confiding), and the reciprocal services which characterize the tie” (1973). Thus, the ties between pairs of nodes range from weak to strong according to 1) interaction opportunities, and 2) frequency of communication (Burt 2010). In turn, the types of ties among the nodes indicate patterns of connectivity; the groups whose nodes are connected by strong ties are said to have closure. The other structural category of interest in social networks is the one in which two nodes can connect through an intermediary, but not directly. This is an age-old situation that was first introduced into the sociology of networks by Georg Simmel as the tertius gaudens, or the third who benefits.6 In the entrepreneurship literature, Kirzner conceptualized it in terms of arbitrage (1973).7 Burt reframed the role of the intermediary node in terms of brokering across structural holes, or entrepreneurial opportunity, in social networks (1992). It is this structural element of social networks that explains how entrepreneurs perceive opportunity and act to change network structure. Value in social networks has been extensively theorized as social capital, which was first defined by Bourdieu as “the aggregate of the actual or potential resources which are linked to possession of a durable network of more or less institutionalized relationships of mutual 6 The reference to Simmel is from Burt, who also quotes Italian and Dutch proverbs describing the situation of the individual who benefits from the disunion of others (1992: 31). 7 Arbitrage, or Kirznerian, entrepreneurial opportunity is due to market inefficiency, and it is quickly exploited by the entrepreneur observing the discrepancy between two parties (Kirzner 1973). This type of opportunity is usually defined in contrast to innovative, or Schumpeterian, entrepreneurial opportunity that is related to creating new combinations of goods and services, raw materials, and production methods (Schumpeter 1934). In reality, these two types of opportunities are stylized facts to assist in analytical clarity. Page 4 of 19
  5. 5. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh acquaintance and recognition; [it is] made up of social obligations (‘connections’), which is convertible, in certain conditions, into economic capital” (1986).8 As such, social capital has been operationalized at individual or relational level, (e.g., Granovetter 1973; Burt 1992), and group level (e.g., Coleman 1998). For example, Granovetter looked at how individuals in a community obtained employment and observed that information about new jobs is more likely to come through “weak ties,” or ties characterized by low interaction opportunities and communication (1973). Indeed, informal personal contacts, as opposed to family or friends, who were in different occupations from the respondent, were found to be more likely sources of information leading to job changes (Granovetter 1974). Alternately, strong ties were found to improve economies of time and search (Uzzi 1997), or closure in the social structure of the New York diamond traders community decreased transaction costs among its members (Coleman 1988). Members in groups with closure tend to maintain structure due to the value of membership (Bourdieu 1986; Coleman 1988). In structures with closure, social capital protects against information decay and norm breaking (Burt 2000). Finally, the intermediary position gives its occupant benefits associated with the brokering between the two otherwise disconnected individuals who cannot connect directly despite the benefits of doing so (Burt 1992). The two types of entrepreneurial payoffs one may seek from brokering across structural holes are: 1) practices and information that are new for one’s own group, and 2) control advantage of intermediating between parties across structural holes.9 Since weak ties signal structural holes, both Granovetter and Burt relate probabilistically the chance for network agents’ success to the number of ties developed and maintained (Granovetter 1983; Burt 1992).10 As well, at aggregate network level, studies show that networks spanning structural holes are correlated with overall entrepreneurial success, e.g., innovation (Burt 2005). It follows that the entrepreneur seeking to maximize the value of the network will modify its structure by increasing the number of (weak) ties with the idea of improving chances for entrepreneurial success from brokerage, with a preference for seeking control opportunities. 8 After its introduction, social capital has been conceptualized in three major streams 1) the rational strain rooted in the works of Gary Becker and James Coleman; 2) the democratic strain rooted in the work of Robert Putnam; and 3) the critical strain rooted in the work of Pierre Bourdieu. Without going into the particularities of each stream, we can think of each one as addressing social capital at a different level of analysis. Of immediate relevance is the rational stream through the works of Coleman and Burt. 9 The control benefits are sometimes more important than information benefits, for they are a function of size of the tension between the parties that need to communicate across the structural hole (Burt 1992; 2005). 10 Granovetter made the argument that “all bridges are weak ties” (1973), and Burt consolidated the argument by observing that “the causal agent in the phenomenon is not the weakness of a tie but the structural hole it spans. Tie weakness is a correlate, not a cause” (1992). Moreover, "The task for a strategic player building an efficient- effective network is to focus resources on the maintenance of bridge ties” (Burt 1992: 31). Page 5 of 19
  6. 6. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh However, the resources of the agent limit the number entrepreneurial opportunities one can pursue.11 The agent has to balance between increasing the number of ties with outsiders and maintaining the strong ties within the agent’s group; in other words, invest in new relations with a higher yet uncertain payoff vs. reinvest in existing relations with a lower yet certain payoff. The network broker is Kirzner’s alert-, or Giddens’ reflexive-agent who pursues entrepreneurial opportunities presented by the network structure, and will also act to change the structure of the network. In the following table is the summary of the relations between structure, value and action in social networks. Weak ties Closure Structural holes Value Novelty (Granovetter) Norms, efficiency Brokerage, control, (Coleman, Uzzi) effectiveness (Burt) Locus of Embedded in the dyadic Group asset Individual asset value relation Action Create new ties Reinforce group Look for, or create structural holes and broker them In the above table, entrepreneurial action prompted by structural holes is in opposition to the action prompted by closure. However, before looking at how entrepreneuring occurs as interplay between structure and value in online social networks, it is worth reflecting on Burt’s insight about the brokerage and closure as complementary sources of value: "Brokerage is about coordinating people between whom it would be valuable, but risky, to trust. Closure is about making it safe to trust. The key to creating value is to put the two together. Bridging a structural hole can create value, but delivering value requires the closed network of a cohesive team around the bridge" (2005): 164). Despite the incompatibility between brokerage and closure, as reflected by the literature, including Burt’s own earlier accounts, the above paragraph suggests that the highest value in social networks comes from brokerage and closure. The argument I will make is that such configuration characterizes the structuration process whereby entrepreneurs build groups or communities with-in online social networks. 11 For example, the individual agent’s commitment to the agent group is a resource limitation. Page 6 of 19
  7. 7. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh An Entrepreneurship Model in Online Social Networks Network Usenet and bulletin board systems (BBS) are the earliest examples of online social networks. They are constituted round hierarchical categories of common interest. The categories are social foci “organizing social activities and interaction” (Feld 1981).12 The early networks had tree-like structures: a generic focus for the root, e.g., sci.math for the Usenet whose focus is mathematics; micro-foci with attending groups branching out, e.g., sci.math.geometry being the group adjacent to the root whose focus is geometry. The social capital in such social networks is a collective resource in the form of network content or knowledge created through social interactions—e.g., blogs, wikis, photos, video, tutorials, questions and answers, forum discussions, codes of behavior. Three observations are necessary. First, online content remains available to any member as long as the community itself. It is usually archived and retrievable upon request. Second, online content as common good is protected against decay-by-use. An additional digital copy has a near-zero marginal cost. Three, the commonwealth is protected by the norms and rules individuals accept upon joining. The codes of online behavior, or netiquette, have evolved to include a wide range of rules ranging from the use of capital letters to copyright.13 Functionally speaking, online groups of interest resemble Coleman’s social structures with closure whereby "social capital is defined by its function. It is not a single entity, but a variety of different entities, with two elements in common: they all consist of some aspect of social structures, and they facilitate certain actions of actors […] within the structure” (1988). The network content is for anyone’s benefit as long as netiquette is observed. Over time, the online social networks have become also structured around people not only interests. Taking this evolution into account, Boyd and Ellison (2007) define social network sites as “web-based services that allow individuals to (1) construct a public or semi- public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system” (p. 211). This definition centers on the individual member, and suggests that social capital in these communities is an individual resource embedded in the dyadic relation. 12 “Relevant aspects of the social environment can be seen as foci around which individuals organize their social relations. A focus is defined as a social, psychological, legal, or physical entity around which joint activities are organized (e.g., workplaces, voluntary organizations, hangouts, families, etc.). As a consequence of the interaction associated with their joint activities, individuals whose activities are organized around the same focus will tend to become interpersonally tied and form a cluster” (Feld 1981: 1016). 13 An example of a netiquette rule is: “Respect the copyright on material that you reproduce. Almost every country has copyright laws” (IETF RFC 1855). Available at: http://tools.ietf.org/html/rfc1855 Page 7 of 19
  8. 8. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh The network structure is flat and consists of several overlapping ego-networks, that is, dyadic relations with a common node. The individual member lacks the constraints and advantages associated with one’s relative position in the network. Indeed, there is nothing to prevent two members from connecting directly even though a third one might have made them aware of the structural hole in between. So, while the social capital in these networks is of the Granovetter’s weak ties type, it cannot be of Burt’s—control and brokerage of structural holes. In fact, according to Burt, on the internet, the network itself becomes the broker (2010). In today’s reality, the structure of the online social networks has evolved to the point they consists of a mix of interest groups and ego-networks, just as their social capital is both group resource and individual resource embedded in dyadic relations, respectively. Moreover, online social networks are likely to be open registration networks in which strangers can connect based on shared interest.14 As well, forms of social homophily observed in real world social networks (for review, see (McPherson, Smith-Lovin et al. 2001) have also been empirically observed in online social networks (Lewis, Kaufman et al. 2008; Huang, Shen et al. 2009). We can assert now that network members connect online in structures based on common interests and/or likeness. This is to say that people tend to connect online around value. Additionally, the network structures based on social focus are likely to be groups of strangers with various levels of closure, while the structures based on homophily are likely to be ego-networks. Creating online collective social capital, content or knowledge, has the value of drawing from a wealth and variety of individual resources otherwise fragmented by time and distance. The coordination of these resources is done in groups with closure—it is effective to aggregate round a given focus, it is efficient to achieve pro-social individual conduct within groups with norms and rules. Conversely, individual social capital is relational in nature and the more likely network structure is the dyad or ego-network. Then, given the diversity of the ways in which people can be alike, (e.g., beliefs, values, education, status, kinship, etc.), it is less of a probability that likeness characteristics are transitive across groups of people, yet one may want to invest in ties along each characteristic of likeness. If several people share a likeness characteristic and want to develop social capital, the characteristic in question becomes a social focus and chances are they form a group with closure round it. The next figure illustrates four types of action-states available to the network agent. 14 There are two types of online social networks, those adopting open registration (e.g., Flickr), and those that are invitation only (e.g., Facebook, LinkedIn). However, over time, the popular networks of the latter type have evolved towards the open registration model. For example, both Facebook and LinkedIn have turned open registration. Page 8 of 19
  9. 9. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh Group The whole network Groups with closure Potential social capital Collective social capital IV I Open Closed III II Ego network Strong ties Individual social capital Relational social capital Dyad On the vertical axis, there are the two types of network structure, groups and dyads. These are member states; one can be part of a group and/or dyadic relations. The horizontal axis, Open- Closed, represents the continuum between relative openness and closure as applied to the structural state in which a member is. For example, given two non-identical groups, the one where the member’s investment in the observance of rules and norms is higher would be placed to the right of the other group. The left-most groups would be those whose norms and rules are the default option for the overall network15 Alternatively, given two non-identical ego-networks, the one with a lower normalized sum of tie-strengths would be placed to the left of the other. We are now in a position to consider a model for the online network entrepreneur. The online network entrepreneur is the alert and reflexive agent who identifies a social focus, and creates a group round it. According to Burt, the entrepreneur is the agent that creates brokerage and closure (2005:164). The entrepreneurial resources are invested in identifying the social focus, deciding the level of closure, and creating the group, all iterative processes with uncertain outcomes. The group becomes the bridge on which strangers connect across structural holes of space and time to develop social capital on a given theme. Online network entrepreneurs create groups with closure. 15 The relation between the social capitals of the two groups is more problematic, for the value of each one is neither constant in time, nor entirely measurable on objective scales. Page 9 of 19
  10. 10. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh The actions of the agent, and chances of entrepreneurial success, depend on the pre- exiting network structure. For example, higher chances of success are associated with creating a group round a social focus not yet addressed by existing network groups—effectiveness of action. As well, differences in the level of closure can enable the existence of several groups addressing similar foci—efficiency of action. In turn, creating a group and deciding the level of closure are actions that change the structure of the network. To create a group is to increase the social capital of the group, which is precisely the type of social capital in Coleman’s or functional terms, enabler and outcome (1998). We shall leave for further study the process by which increasing social capital attracts new group members, in itself a factor for structural change in the network. Suffice it to say at this point that increasing group membership is a function of random discovery just as much as existing members’ drawing their connections into the group. Of topical relevance is the observation that the entrepreneur can be in any of the four quadrants of action-states. Following is the illustration of the updated structuration process characterizing online network entrepreneuring. New group opportunity Network Reflexive & Create group with Structure alert agent closure Increase social capital To theoretically position the sources of value motivating the entrepreneur, given that online networks cannot firmly hold the arbitrage benefits of the brokers in real life networks, we should make two observations from the extant literature on social capital. One, social capital is indeed fungible capital that can be appropriated in different ways by different people (Nahapiet Page 10 of 19
  11. 11. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh and Ghoshal 1998; Portes 1998; Lin, Cook et al. 2001; Adler and Kwon 2002). Second, even in Burt’s competitive contexts the entrepreneur can choose to maximize non-economic returns on investment in social capital (1992). Consequently, when we look for entrepreneurial returns on investments in online social capital, we should do so only if we acknowledge the many varieties in which social capital exists and is appropriated. Below is an operational definition of social capital that captures these observations, and informs the next section where the entrepreneurial process is illustrated by two examples from an online social network. Social capital is: “[1] investment in social relations by individuals through which they [2] gain access to embedded resources to [3] enhance expected returns of instrumental or expressive actions” (Lin 1999: 39). The embedded resources enhance the outcome of actions due to the following elements information, influence, social credentials and reinforcement--these are intrinsic to social capital, yet not explained by other forms of personal capital (Lin, Cook et al. 2001) We can say that it is a higher level of influence, social credentials and reinforcement that the online network entrepreneur aspires to by creating online groups with closure—higher than the levels at which regular network members obtain these forms of social capital. Flickr, Two Group Dynamics Sketches The empirical lens is applied to Flickr, the leading online social network focusing on photo sharing. There are three reasons for the choice of social network. Being a monothematic community, Flickr lends itself to insights with analytical clarity. Flickr also makes a good stand-in for the social networks whose revenue model is a combination of advertising and membership fees, the dominant model at this time.16 The fact that Flickr presents the social scientist with the option of empirically testing theoretically driven hypotheses is the third reason for the choice. Like many similar networks, Flickr makes available the application-programming interface (API) to its systems so that network data can be collected automatically. Flickr is a web service for hosting, sharing and managing image-, and video-content, and online community of based on open registration. It offers two types of membership levels: Free 16 To further support this point about choice representativeness, there is also Boyd and Ellison’s empirical observation that the “key technological features are fairly consistent” across social networking sites (2007). In Annex 1, this point is also illustrated by reference to two social networks whose themes are different, yet social schemes equivalent. Page 11 of 19
  12. 12. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh and Pro accounts. Free account members are allowed to upload 300 MB of images a month and 2 videos. Also, the non-paying members can only display the most recent 200 photos in their photostreams. Pro accounts allow users to upload an unlimited number of images and videos every month and receive unlimited bandwidth and storage. The revenue model of the overall network is a mix of advertising and membership fees. The non-paying members are exposed to advertising. From the perspective of the Flickr corporate owner and the adversities, free account members become valuable assets once they become characterized by their actions and especially group membership(s). For example, at the time of this writing, the list price of the photo camera Leica M9 is $6995.17 Advertisers are likely to pay a premium to be able to target the demographic segment of Leica enthusiasts , who are likely to be members of the Leica M9 group on Flickr. Dolphins and Artistic Street Photography18 “I like photography and dolphins. I’m also passionate about photos of dolphins” is seldom heard in our daily lives. Usually, something like this comes up prompted by a contextual element pertaining to one’s likes or dislikes, or more specifically to photography or dolphins. Moreover, since dolphin-photography is indeed my hobby, chances are that people surrounding me are not impressed, for lack of interest in photography or dolphins. On internet there are several hundreds of us, mostly strangers, to share the interest on dolphins and photography. Flickr is one of the social networks that makes grouping round this social focus possible. As illustrated in Annex 2, the group DOLPHINS bridges structural holes of space and time zones for 709 enthusiasts. This is a 6-year-old open group, with the default levels of closure. The content of this group consists of 2,975 photos and videos, and 22 conversations. Browsing through the photos reveals that there are conversations going on, but they take place along dyadic connections in what seems to be the ego-networks of the photographer. Moreover, the same photo has been submitted to several groups. This pattern of behavior suggests that members in open groups look for comments and similar content. To illustrate this perspective, I queried the Flickr database for “your comments,” and selected the first displayed photo. The member who published the photo wrote back to the community: “Thank you all my friends for your wonderful support. 17 Listing source: Amazon.com 18 The summaries of the two Flickr groups featured below are presented in Annex 3. Page 12 of 19
  13. 13. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh Fantastic moments, to read all your comments, to see your invites and to count all the faves.” If most comments are short lines praising the photo or the photographer, we can infer that the social capital created is minimal. The value of network entrepreneuring in this case seems to be not much higher than that of the regular members. In contrast to the group with little closure, the Hardcore Street Photography (HCSP) is a 6-year-old group with high closure. Being able to post only two photos a week and having no guarantee of their surviving the editorial review, which references top artist photographers as models, is a high standard. The content of the group consists of 2,713 photos, which is not a lot especially considering that this group has 42,671 members. Given that there are 2,250 discussion topics, of which the most active has received 14,864 replies in 3 years, we can infer that this group is not made only of free riders, but an active membership looking to develop knowledge through group interaction. The HCSP’s social capital develops along all four dimensions in Lin’s definition, information, influence, social credentials and reinforcement, and is likely to reward entrepreneur-founders with the benefits of associated with brokerage and closure. In the case of Flickr, the size of the brokerage component can be approximated by the number of group members, closure by the number of members divided to the number of photos. The size of the social capital is the sum of content items and conversation items. These empirical sketches, by contrast, illustrate the entrepreneurial opportunity in groups with closure, which were shown to evolve as structuration between network structure and agent action. As the investment required by maintaining closure in HCSP is much higher than in DOLPHINS, the alert and reflexive agent(s) must undergo the structuration process on a continuous basis—to enforce the editorial policy, for example. While longitudinal data is absent from the analysis at this time, this is only a temporary limitation at most. Discussion and Methodological Implications The above examples, illustrate with some specificity the idea that network entrepreneurship is rather a function of brokerage and closure. These are observable structural elements of social networks that, together with the agency towards realizing entrepreneurial Page 13 of 19
  14. 14. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh value, illustrate Giddens’ structuration process in online network entrepreneuring. Moreover, all the theoretical points brought in support of this paper place dualities of some sort on a reflexive orbit. Giddens’ structuration, Feld’s foci, social capital, and homophily are all dynamic dualities consisting of process and outcome. The research opportunity of studying online social networks has the potential to address these phenomena beyond the metaphoric. Since network entrepreneuring is likely to grow, in for profit and not for profit contexts alike, exploring and understanding the phenomenon is very timely. Recently, Ronald Burt authored a working paper in which he makes the case for the generalization of insights obtained in virtual worlds (2010). Virtual worlds offer “good-quality, time-stamped, micro-level data on social networks in large, heterogeneous populations. Models can be formulated and tested with a precision impossible to match with standard sociometric survey methods. More, social skills can be learned in virtual worlds that require years of experience in the real world, and remain in many people underdeveloped” (ibid.). To these I would only add the possibility to obtain longitudinal data, which are the only type that can illustrate structuration types of processes. It needs to be stressed once again that people invest in social networking not always with the idea of maximizing economic utility. I feel the need to make this point for a couple of reasons. For one, social capital has been employed in this work mostly from the rationalist accounts of Coleman and Burt. However, Georg Simmel (2008), the antipositivist sociologist from the beginning of the 20th century, made us aware of the “impulse to sociability in man.” Sociability is described as “associations...[through which] the solitariness of the individuals is resolved into togetherness, a union with others," and it is achieved through "the free-playing, interacting interdependence of individuals” (ibid. p. 158-163). The quantification of sociability may prove to be a fool’s errand because the amount of resources individuals pour into social networking escapes the typical equilibrium equation positivist scientists employ. The numbers of content items and conversation items relative to the group members in the two cases suggests that patterns of interaction follow anything but causal/linear paths. For those who find the online networks data an irresistible opportunity to quantify the social phenomena in such networks, self-adaptive complex systems may provide good candidates for concepts and techniques to not only help us understand social reflexivity, but also suggest patters of future behavior. To think of a mechanism accounting for the evolution of online social networks, I should observe that they are open systems, characterized by simple structures relative to their size, and consist of large numbers of agents, connected into subsystems, and potentially interconnectable at multi-level and in any combination possible. In Page 14 of 19
  15. 15. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh the view of organization theory, such structure is complex and characterized by hard to predict behavior, due to its nonlinearity associated with feedback loops (Anderson 1999). In conclusion, successful online social networks appear to behave like complex adaptive systems (CAS) in that they self-organize while continuing to import energy. In reviewing the literature on complexity and organizations, Anderson indicates that CAS“-models represent a genuinely new way of simplifying the complex. They are characterized by four key elements: agents with schemata, self-organizing networks sustained by importing energy, coevolution to the edge of chaos, and system evolution based on recombination,” (Anderson 1999).19 A limitation of this work, if not considered carefully, is the business model on which the overall networks operate. The fact that we looked at open registration networks supported by advertising and membership fees models would need to be factor in when the current work is to be extended. 19 Anderson also makes the point that CAS informed models help organization science by “merging empirical observation with computational agent-based simulation.” As there has been scant empirical evidence of actual complex adaptive systems, framing virtual social networks in CAS terms should encourage more realistic experimentation and simulation. It should also be noted that the author also indicates that the “CAS perspective opens up exploration into how ideas, initiatives, and interpretations form an internal ecology within an organization,” (ibid. p. 221). Page 15 of 19
  16. 16. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh BIBLIOGRAPHY Adler, P. S. and S.-W. Kwon (2002). "Social Capital: Prospects for a New Concept." The Academy of Management Review 27(1): 17-40. Anderson, P. (1999). "Complexity Theory and Organization Science." Organization Science 10(3): 216-232. Bourdieu, P. (1986) "The Forms of capital." Boyd, D. M. and N. B. Ellison (2007). Social Network Sites: Definition, History, and Scholarship. Journal of Computer-Mediated Communication, Wiley-Blackwell. 13: 210-230. Burt, R. S. (1992). Structural Holes: The Social Structure of Competition, Harvard University Press. Burt, R. S. (2000). "The network structure of social capital." Research in Organizational Behavior 22: 345-423. Burt, R. S. (2005). Brokerage and Closure, An Introduction to Social Capital. New York, Oxford University Press. Burt, R. S. (2010) "Structural Holes in Virtual Worlds." 83. Coleman, J. S. (1988). "Social capital in the creation of human capital." The American Journal of Sociology v94: pS95(26). Feld, S. L. (1981). "THE FOCUSED ORGANIZATION OF SOCIAL TIES." American Journal of Sociology 86(5): 1015-1035. Giddens, A. (1986). The constitution of society: outline of the theory of structuration, University of California Press. Granovetter, M. (1973). "THE STRENGTH OF WEAK TIES." American Journal of Sociology 78(6): 20. Granovetter, M. (1974). Getting A Job: A Study of Contacts and Careers. Cambridge, Mass, Harvard University. Huang, Y., C. Shen, et al. (2009). Virtually There: Exploring Proximity and Homophily in a Virtual World, NSF & Army Research Institute 6. Kirzner, I. (1973). Competition and Entrepreneurship. Chicago and London, The University of Chicago Press. Lewis, K., J. Kaufman, et al. (2008). "Tastes, ties, and time: A new social network dataset using Facebook.com." Social Networks 30(4): 330-342. Lin, N., K. Cook, et al. (2001). Building a Network Theory of Social Capital. Social capital: Theory and research, Sociology and Economics: Controversy and Integration series. New York: Aldine de Gruyter: 3-29. McPherson, M., L. Smith-Lovin, et al. (2001). BIRDS OF A FEATHER: Homophily in Social Networks. Annual Review of Sociology, Annual Reviews Inc. 27: 415. Nahapiet, J. and S. Ghoshal (1998). "Social Capital, Intellectual Capital, and the Organizational Advantage." The Academy of Management Review 23(2): 242-266. Portes, A. (1998). "Social capital: Its origins and applications in modern sociology " Annual Review of Sociology Vol. 24: pg. 0_12, 25 pgs. Simmel, G. (2008). Sociological Theory. New York, McGraw-Hill. Uzzi, B. (1997). "Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness." Administrative Science Quarterly 42(1): 35-67. Page 16 of 19
  17. 17. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh Annex 1: Definitions and schemes of technological equivalence for Flickr and LinkedIn Definitions Flickr LinkedIn “Flickr - almost certainly the best online photo “Your professional network of trusted contacts management and sharing application in the gives you an advantage in your career, and is world - has two main goals: one of your most valuable assets. LinkedIn 1. We want to help people make their photos exists to help you make better use of your available to the people who matter to them. professional network and help the people you 2. We want to enable new ways of organizing trust in return. Our mission is to connect the photos and video.”20 world’s professionals to make them more productive and successful. We believe that in a global connected economy, your success as a professional and your competitiveness as a company depends upon faster access to insight and resources you can trust.“21 Technological equivalence Flickr LinkedIn Join the overall network at no- Join the overall network at no-charge or charge or premium level premium level Social Join a group Join a group Create a group (open or with Create a group (open or with rules) rules) Connect with a member Connect with a member Mark a member as a friend Mark a member as a colleague Post a comment/mark as favorite Post a question/reply Add a member to your network Add a member to your network Write/accept a reference Write/accept/request a reference about/from a about/from a connection connection Communicate with a member Communicate with a connection Undo any of the above Undo any of the above Recommend a photo to a Introduce a connection to a job connection Control Manage presence levels Manage presence levels Report abuse/flag inappropriate Report abuse/flag inappropriate Thematic Browse/search photos Browse/search job postings Browse/search members Browse/search members Post a photo Post a resume/job Download a photo Apply for a job 20 http://www.flickr.com/about/ 21 http://press.linkedin.com/about Page 17 of 19
  18. 18. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh Annex 2: Map of the locations photos in the Flickr group DOLPHINS were taken. The red dots are the actual locations, the distances in between suggesting structural holes of space and time zone. Page 18 of 19
  19. 19. Entrepreneuring in Online Social Networks: From Brokerage vs. Closure to Brokerage and Closure via fCh Annex 3: Membership rules and norms, and stats of two Flickr groups DOLPHINS (since 2006) HCSP, Hardcore Street Photography (Since 2006) http://www.flickr.com/groups/dolphins/ http://www.flickr.com/groups/onthestreet/ Default norms and rules Norms and rules with closure Additional Information POSTING LIMIT NOW 2 PHOTOGRAPHS PER This is a public group. WEEK Accepted media types: Photos A group dedicated to candid situations that Video momentarily reveal themselves amidst the mundane Accepted content types: hustle and bustle of everyday life. An ode to all great Photos / Videos street photographers such as Winogrand, Arbus, Screenshots / Screencasts Levitt, Koudelka and many, many more. Respect the Illustration/Art / Animation/CGI past but avoid being beholden to it. Accepted safety levels: Safe BE AWARE: This group is heavily curated. Photographs will be removed without explanation. To repeat: the admins simply don't have the time to explain why a given photo was removed. Don't take it personally. What goes and what stays? Read the group description. Give us a reason to remember the photograph. Ask yourself, what makes it so special, why is it worth remembering for more than a split second? The reason why it's so hard for us to tell you why we keep or delete a photo from the pool is because we don't have a quantified set of rules. It's just a feeling that we have. Look through some of the Magnum images for starters. Check out In-public. Read Michael David Murphy's Ways of Working and Phyla of Street Photography and Nick Turpin's Undefining Street Photography 709 members 42671 members 2975 items (photos and videos) 2713 photos 6 discussion topics with 16 total replies 2250 discussion topics 1 administrator, no moderator(s) The most discussed topic was posted on July 2008 and The administrator is not among the top 5 contributors has 14864 replies. to the group 12 administrators, 5 moderators (none of whom have made most photo contributions to the group) Page 19 of 19

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