A study in 2000 by Iain Edmondson looked at three Cambridge companies and the benefits they gained from networking at three different stages in their development:
- Conceptualisation – the ideas
The benefits fell into two categories:
- “Harder” benefits – Leads to customers, investors, partners, suppliers, employees and technical and market knowledge/information.
- “Softer” benefits – Credibility/legitimacy, advice and problem solving, confidence and reassurance, motivation/inspiration, relaxation/interest.
At the conceptualisation stage entrepreneurs tended to cast their net widely to try and establish themselves and their ideas in the entrepreneurial community and pave the way for the development of future business relationships. The role of networking groups here is in providing the softer benefits.
At the start-up stage there is a shift towards using networks to gain more tangible benefits to develop new business relationships. Establishment of trust is crucial at this stage in sharing problems and solutions. The role of networking groups here is to provide both softer and harder benefits.