Social Competency and Social Networks as Predictors of Business Growth in Japanese IT and Web Startups

We examined whether entrepreneurs who actively expand their social networks achieve higher business growth, using a sample of entrepreneurs at the early stages of Web-related businesses in Tokyo. We also tested whether larger social networks mediated this relationship. Social networks were measured in terms of the number of acquaintances and business mentors. The former reflects the availability of support from a wide human network and the accessibility of information sources. The latter reflects access to direct support and advice from professionals. We confirmed that social competency and active networking were positively related to both indicators of social networks. Moreover, these two indicators were marginally related to business growth, indicated by whether the company experienced a substantial increase in the number of employees.