Spring
2013
ENTREPRENEURIAL
NETWORK
Lien Nguyen, Antonela Thoma and Valdonė Kupšytė
Supervisor: Flemming Sørensen
Master in
Economics and
Business
Administration
Entrepreneurial network 2013
Abstract
Network has become more and more indispensable in the entrepreneurial world. Especially in
startup businesses, network is crucial for new entrepreneurs. This project looks at how
entrepreneurs in different sectors use network to become successful. We chose to work with three
entrepreneurs from three companies that have been operational for a few years and conducted
face to face interviews with them. Through the data from the interviews, we analyzed firstly what
type of entrepreneurs they are, secondly what kind of network activities, what kind of relations
from network that have influenced them most and thirdly how they get access to resources,
identify opportunities and gain legitimacy to their businesses through the use of network.
Applying the interpretivism philosophy of science, we interpreted the level of weak and strong
relations of the real entrepereneurial network, the way entrepreneurs benefit from network and
how success is achieved. The cases we have constructed in this project are exemplary cases of
real successful entrepreneurs whom we want to learn from.
Our findings show that there is no difference in the way entrepreneurs benefit from network no
matter what type of entrepreneurs they are and no matter how they use network. They all have
gained lots of benefits for their business and could not become as successful as they are today
without the use of network.
Introductory Chapter
Key words: Entrepreneurs, entrepreneurship, network, success, startup
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Table of Contents
1
INTRODUCTORY CHAPTER ............................................................................................. 5
1.1 INTRODUCTION ................................................................................................................ 5
1.2 PROBLEM FORMULATION ............................................................................................. 6
1.3 INTERPRETATION AND DEMARCATION .................................................................... 6
2
METHODOLOGY CHAPTER ............................................................................................. 8
2.1 RESEARCH PHILOSOPHY, RESEARCH APPROACH .................................................. 8
2.2 METHODOLOGY AND THEORIES APPLIED ............................................................. 10
2.3 RESEARCH DESIGN, DATA COLLECTION, VALIDITY AND RELIABILITY OF
SOURCES .................................................................................................................................. 11
2.4 CASE STUDY SELECTION ............................................................................................. 12
3
THEORY CHAPTER ........................................................................................................... 13
3.1 ENTREPRENEUR THEORIES ........................................................................................... 13
3.1.1 Schumpeter‘s entrepreneur ......................................................................................... 14
3.1.2 Kirzner‘s entrepreneur ................................................................................................ 15
3.1.3 Casson‘s entrepreneur ................................................................................................ 15
3.1.4 Timmons entrepreneur ................................................................................................ 16
3.2 NETWORK THEORIES .................................................................................................... 17
3.2.1 Importance of network, network activity and structure .............................................. 18
3.2.2 Network activity ........................................................................................................... 18
3.2.3 Network structure ........................................................................................................ 18
3.3 ENTREPRENEUR’S SUCCESS THROUGH NETWORK ............................................. 21
3.4 SUMMARY ....................................................................................................................... 25
4
THE CASES AND ANALYSES .......................................................................................... 26
4.1 MOND OF COPENHAGEN.............................................................................................. 26
4.1.1 Analysis of Mond of Copenhagen ................................................................................ 29
4.2.1 Analysis of SpotOn marketing ..................................................................................... 37
4.3 CIRCAL ............................................................................................................................. 43
4.3.1 Analysis of CirCal ....................................................................................................... 45
5
DISCUSSION ........................................................................................................................ 49
Introductory Chapter
4.2 SPOTON MARKETING ................................................................................................... 34
2
6
CONCLUSION ..................................................................................................................... 52
7
ACKNOWLEDGEMENT .................................................................................................... 55
8
REFERENCES ...................................................................................................................... 56
9
APPENDIX ........................................................................................................................................ 60
Introductory Chapter
Entrepreneurial network 2013
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Table of Figures
Figure 1. Timmons model of entrepreneurship .............................................................................. 17
Figure 2. The entrepreneur and network ties.................................................................................. 19
Figure 3. Our generic model to analyze the type and the network of the entrepreneurs................ 26
Figure 4. Entrepreneurs of Mond of Copenhagen‘s network ......................................................... 33
Figure 5. Entrepreneurs of SpotOnmarketing‘s network ............................................................... 42
Figure 6. Entrepreneurs of Circal‘s network .................................................................................. 48
Introductory Chapter
Figure 7. 0verview of entrepreneurs and the use of networks ....................................................... 52
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1
Introductory Chapter
1.1 Introduction
Entrepreneurship is an important phenomenon for the economic growth, productivity innovation
and employment. In the current economic crisis, entrepreneurship has gained additional attention
because new economic conditions require new methods and new guidelines for the companies, in
order to create sustainable economic growth (OECD, 2009).
Entrepreneurship literature developed in time has not that much detail on how to be a successful
entrepreneur (Swedberg, 1998). Also, the traditional literature on entrepreneurship has an
academic character and is less engaged in the practical dimension of entrepreneurship (Casson,
2005). One of the reasons this happen is because only a few of the scholars enrolled themselves
in business activities (Swedberg, 1998).When we ask questions such as “how to be a successful
entrepreneur?” and “which are the means that make an entrepreneur successful” we need specific
answers.
The term “entrepreneur” is still a vague concept. Literature have provided us with a lot of
entrepreneurial theories. Theories which are based on the personality traits of the entrepreneur,
socio-cultural factors, population and ecology factors, economic perspective and some based on
the network perspective (Low and MacMillan as cited in Amit, Glosten, Muller, 1993: 819).
Moreover, entrepreneurial literature involves a combination of fields such as economics,
management, sociology and psychology.
On the other hand, the network of entrepreneurs has a significant impact in the context of
entrepreneurship. An entrepreneur whether he or she is a new or experienced one can be
described as a “networking man” (Johannisson, 1988). This means that the entrepreneur can not
be perceived outside of his social network, but instead must be part of a general context and
therefore must be studied in that way.
Networks, both metaphorically and concretely (Johanisson, 1988), are helpful tools in the start-up
phase of a firm and during the process of growing. The network perspective of the entrepreneur is
described as a scheme comprised of dyadic ties and linkages which is formed of formal and
constantly changing according to the stages and the needs of the venture (Elfring, Hulsink, 2001).
The entrepreneurial network can contain suppliers, potential customers, governmental agencies
and other stakeholders but can also contain friends, family and acquitances which have
Introductory Chapter
informal relations, weak and some are strong ties incorporated in a dynamic scheme that it
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norelations with the business network. There is a constant interaction between the entrepreneur
and his network.
But how can entrepreneurs use networks and in which phase of the venture's life does network
have strong influence? How is this information being implemented by the entrepreneur in
practice? How can the use of these network impact their success? Do different entrepreneurs
benefit from network in different way? Is there any relation or connection in the type of
entrepreneurs and the benefit he gets from network? These issues have motivated us to
investigate not only because we find them interesting, but also due to our personal vision as
entrepreneurs-to-be.
1.2 Problem formulation
“How do entrepreneurs use network to become successful?”
Sub questions:
1)How can we define entrepreneurs and network?
2)What are the benefits of network for entrepreneurs?
3) Do different entrepreneurs benefit from network in different way?
1.3 Interpretation and demarcation
-Entrepreneurs: There are many definitions and theories about entrepreneurs. The study of
entrepreneurship spans a wide range of fields including decision in sciences, economics,
management, sociology and psychology. Most researchers have defined the field solely in terms
of entrepreneurship and the role of entrepreneurs, therefore there is no consensus as to the exact
meaning (Shane, Venkataraman, 2007: 171). In this section we only talk about the definitions of
entrepreneurship and entrepreneurs. Different entrepreneur theories will be presented more
deeply in our theory chapter below.
In a business setting, entrepreneurship can be defined as the process of extracting profits from
new, unique, and valuable combinations of resources in an uncertain and ambiguous environment
way of thinking that is opportunity-focused, innovative, and growth-oriented”. It can be found
within large organizations, in socially responsible non-profit organizations or anywhere that
individuals and teams desire to differentiate themselves from the crowd and apply their passion
and drive to executing a business opportunity. Generally, according to Low and MacMillan (as
cited in Amit, Glosten, Muller, 1993: 816) defined entrepreneurship as „the creation of new
Introductory Chapter
(Amit, Glosten, Muller, 1993: 816). Allen (2009) argues that entrepreneurship is “a mindset or
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enterprise“. Amit, Glosten, Muller (1993) defines entrepreneurs as individuals who innovate,
identify and create business opportunities, assemble and coordinate new combinations of
resources, so as to extract the most profits from their innovations in an uncertain environment.
Bygrave’s (2003) defines entrepreneur as “Someone who perceives an opportunity and creates an
organization to pursue it. The entrepreneurial process involves all the functions, activities, and
actions associated with perceiving opportunities and creating organizations to pursue them”.
-Network: In this section we only want to define network based on the definition of previous
studies. Different network theories will be presented more deeply in our theory chapter below.
In the network literature a distinction is made between weak and strong ties and in this project we
also want to define network as the strong, weak ties that help entrepreneurs obtain resources,
opportunities and legitimacy. Strong ties are built on a history of past dealings and in these
relationships a degree of trust can play a role (Aldrich & Zimmer, 1986, as cited in Elfring and
Hulsink, 2001). Weak ties refer to a diverse group of persons with whom one has some business
connection. Strong ties are associated with close friends, while weak ties can be connected to
acquaintances (Granovetter, 1973). Weak ties tend to be formed by people who work in different
contexts, and therefore these people may have access to different sources of information,
resources and opportunities. Weak ties are considered to lead to a more varied set of information
and resources than the strong ties can (Bloodgood et al., 1995) and consequently weak ties
enhance the ability of entrepreneurs tospot opportunities. Weak ties may raise the alertness of
entrepreneurs and therefore the network of weak ties of an entrepreneur may set into motion a
chain of events, started by spotting of an opportunity and leading to a new business start-up
(Elfring, Hulsink, 2003)
-Successful: There are many definitions about success. To name a few: Oxford dictionary defines
success as “the accomplishment of an aim or purpose”. Google dictionary defines success as “the
accomplishment of an aim or purpose“ and „the attainment of popularity or profit“. Business
dictionary defines success as „1.achievement of an action within a specified period of time or
within a specified parameter. Success can also mean completing an objective or reaching a goal.
Success can be expanded to encompass an entire project or be restricted to a single component of
example, if an individual's personal goal is to be accepted in a new career, success would occur
after the individual has been officially accepted into his or her new place of employment. 2.
Colloquial term used to describe a person that has achieved his or her personal, financial or career
goals. It could also be used to describe an individual that has more objects (money or any other
Introductory Chapter
a project or task. It can be achieved within the workplace, or in an individual's personal life. For
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desirable item) relative to another individual. For example, a professional athlete can be called „a
success“.
Since we have the interpretivism philosophy (see our methodology chapter below), according to
our meaning, successful is rather subjective, everyone has their own definition of success. In this
project, we can define success as the sustainability of the company in the long run, i.e. the degree
to which the company can balance its triple bottom line Profit, People and Environment. But due
to the limited time to implement this project, we will focus on the Profit bottom line as an
element of success of the entrepreneurs’ ventures. The profit here can also be understood as a
healthy growth of the business venture without making a specific amount of turnover or profit.
Furthermore, we refered to the success variables of Brüderl and Preisendörfer (1998) in their
study about Network Support and the Success of newly founded businesses. They investigated
the success hypothesis through
measures of “organizational success”, particularly three
measures: survival, employment growth, and sales growth. Survival can be seen as minimum
criterion of success. Survival means that the firm did not stop its operation within the first three
years after founding. Employment growth is important because of the widespread hope that new
businesses create new jobs and sales growth highly correlates with other, more sophisticated
measures of the financial development of a new firm.
In this project we only focus on the entrepreneurs in Denmark or have businesses in Denmark so
that we can have direct access to the face to face interview. Furthermore, the level of “weak” and
“strong” of network ties can not be precisely measured and it is rather subjective and will depend
on how we interpret as weak and strong. It will also be imposible to analyze the entire networks
of the entrepreneurs, so we only focus on the important ones and/or the ones that the
entrepreneurs remember to tell us in the interviews.
2
Methodology Chapter
2.1 Research philosophy, research approach
The development of our knowledge about the research problem will start with our research
we view the problem.
As Johnson and Clark (2006) note, it is important to be aware of the philosophical commitments
we make through our choice of research strategy since this has significant impact not only on
what we do but we understand what it is we are investigating. Consideration of the philosophy of
research helps to contribute a deeper and wider perspective of research so that our research
Methodology Chapter
philosophy, ontology and epistemology since they contain important assumptions about the way
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project can have a clearer purpose in the wider context. (Carson et al, 2001: 1) In this project, our
research philosophy is interpretivism where we try to understand differences between humans’
roles as social actors. Particularly, we interpret our role as researchers with the meaning we give
to this role and interpret the entrepreneurs’ roles in accordance with our own set of meanings
(Saunder et al. 2009, p.117). Since we want to understand how entrepreneurs use network to
become successful, our role as researchers is to seek to understand the subjective reality of these
entrepreneurs in order to be able to make sense of and understand their motives, actions and
intentions in a way that is meaningful. (Saunder et al. 2009: 111) We see ourselves as
subjectivists who view that the use of network from entrepreneurs is produced through the social
interaction between entrepreneurs and their network. This interaction is not a definitive, i.e. it is
continually being revised and is constantly changing. As being subjective, the axiological aspect
will be value bound and we value personal interaction with the respondents more highly than
other types of data collections.
On the other hand, ontology is about reality, epistemology is the relationship between that reality
and the researcher, and the methodology is the techniques used by the researcher to discover that
reality (Perry et al. 1999). Given the interpretivism philosophy in this project, our ontology will
thus be seen as individual do not have direct access to the real world but that their knowledge to
the perceived world is meaningful in its own terms and can be understood through careful use of
appropriate interpretivist and relativist procedures. Our epistemology will be the understanding of
reality through perceived knowledge (Carson et al 2001: 4).
Talking in a more tangible sense, given our research question, our ontology is that we view the
world as the multiple links of networks. Furthermore, we cannot define network perfectly since
everyone has their own perception of network. In this project, we view the networking approach
as a way to first of all, facilitate and constrain the entrepreneur to find lucrative opportunities.
Secondly, entrepreneurs draw on their network to pursue opportunities as they provide access to
resources. Thirdly, networking is helpful when the emerging firm of the entrepreneur requires
legitimacy (Elfring and Hulsink, 2001). Our epistemology will then be the knowledge about
network we gained. And our technique/methodology is by studying through entrepreneurs,
the start-up phase to become successful. By successful we mean profitability of the venture. And
thus we will focus on the network ties that bring profit to their ventures.
How we approach the data collection will depend on how we reason the things we do. Reasoning
is the process of using existing knowledge to draw conclusions, make predictions, or construct
Methodology Chapter
studying and interpreting how they use their network, particularly strong ties and/or weak ties in
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explanations. In this research we neither use deductive reasoning where we would test theories or
ideas using data collected, nor inductive reasoning where we would use data collected to develop
theories (Saunder et al. 2009: 61). We think that the most appropriate approach would be
abductive reasoning since it is a reasoning in which explanatory hypotheses are formed and
evaluated (Thagard, Shelley, 1997). It typically begins with an incomplete set of observations or
empirical data which entail trying to identify what lies behind what one has observed,
categorized, typologized, etc. Thus one can make a qualitative leap from the data to the
determining principle that can explain the data’s structure and correlations (Olsen & Pedersen
2006: 136) and proceeds to the likeliest possible explanation for the set (Butte College, (2008). In
other words, we try to give the best explanation for our set of data collected from the interviews
with the entrepreneurs to see how they can use network to become successful.
2.2 Methodology and theories applied
After the problem formulation was defined, we searched for a lot of secondary data about
entrepreneurship, entrepreneurs and network theories to have information, knowledge and
inspiration. Then a research with a number of semi-structured interviews with three entrepreneurs
of three successful businesses was implemented to find out how they use their network in the
start-up phase to become successful as they are today.
The next step is to apply the relevant theories of network and entrepreneurship in general on the
data collected to analyse how these different entrepreneurs use their network. After the analysis,
we will have a discussion where we compare the types of different entrepreneurs and their ways
of using network to run their business to see if there is a connection or differences. We will also
give our comments about how we think the use of network contribute to their success and how
we can learn from that success. The conclusion will answer our research question based on our
findings in the whole project.
The theories used in this project are different theories about entrepreneurs and network theories
Entrepreneur theories are from Casson, Timmon, Schumpeter and Kirner. Network theories are
from different authors, mainly from Granovetter (1973), Jack (2005) and Witt (2004). The
about entrepreneurs. And the reasons for choosing these network theories is because Granovetter
(1973) and Jack (2005) explain the structure and operation of networks strong and weak ties. The
effect of a mix of strong and weak ties in entrepreneurial networks helps us understand the depth
and width of the entrepreneur‘s relationships. Witt (2004) clarifies how entrepreneurial network
activities can be measured and which indicators exist to quantify start-up success.
Methodology Chapter
reasons for choosing these entrepreneur theories are because they give us different perspectives
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We also assess and apply other researchers’ studies about entrepreneurial networks, especially
Tom Elfring and Willem Hulsink (2003). Our project is inspired by the study about networks in
entrepreneurship of Elfring and Hulsen, 2001. They examine how entrepreneurial processes are
influenced by strong and/or weak ties and whether the degree of innovation acts as a contingency
factor in the way network ties support entrepreneurial processes. They argued that network ties
enhance the ability of entrepreneurs, such as spotting opportunities, acquiring resources and
gaining legitimacy (Elfring and Hulsink, 2007: 1849). These processes may be seen as
intervening processes that regulate the key performance outcomes and are labelled as
entrepreneurial processes.Both of them are professors in the Netherlands whose specialty is
entrepreneurship. In the study, the authors advocate the mix of weak and strong network ties to be
most beneficial in the entrepreneurial process. We find their study inspiring because their
research area is very similar to ours. The main difference is that they used cases study of Hightechnology firms in the Netherlands, where ours are three different companies in three different
sectors in Denmark.
2.3 Research design, data collection, validity and reliability of sources
Given our abductive reasoning, our research is designed in a explanatory method where we
interpret and explain how entrepreneurs use network to become successful. The chosen
methodology also builds the cross-curriculum in the project with different subjects into
perspective, namely: marketing, economic, supply chain, organization and leadership. The
research technique is qualitative and non-standardized due to the explanatory nature of the
project. We think it is necessary to understand the opinions and attitudes of the entrepreneurs and
this technique would fit best. We will thus not use predetermined set of questions, but rather the
questions will be complex and open-ended, and the order of logic of questioning may need to be
varied.
Since we plan to interview three different entrepreneurs, we think the best type of interview is
semi-structured where we will have a list of themes and questions to be covered, although these
may vary from interview to interview. The order of questions can also be varied depending on the
flow of the conversation, and additional questions may be required to explore the research
al. 2009: 320).
Data collection are included both secondary and primary data. Secondary data are including text
books, websites, academic articles and internal reports and documents regarding entrepreneurs
and networking in order to answer the research question, and therefore these data are considered
Methodology Chapter
question due to different contexts within particular ventures of these entrepreneurs (Saunders et
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to have a high level of validity/relevance. The text books used are from academic institutes and
thus believed to have a high degree of reliability/quality. Furthermore, a lot of other reliable
internet sources are used. The official websites from the companies of the entrepreneurs are
considered relevant/valid, however, they are subjective and thus have low level of reliability.
Primary data are collected from the face to face interviews with three different entrepreneurs in
three companies that we perceive successful in terms of profit or with healthy growth of the
business ventures. The data is analyzed by qualitative content analysis where coded categories
discovered in the interview transcripts are abductively developed. The validity of data is
concerned with whether the findings are really about what they appear to be about (Saunders et
al. 2009: 157). So in this case when we interview the entrepreneurs directly in order to find out
how they themselves use their network for their ventures would have high level of relevance. The
high level of validity will be dependent on if they provide the right information we need to
answer our problem formulation.
Reliability refers to the extent to which the data collection techniques or analysis procedures will
yield consistent findings. Whether we have the same findings on other occasions? Whether
similar observations be reached by other observers and so on.(Saunders et al. 2009: 156) In our
study, it is important to note that the primary data are subjective from the entrepreneurs’ point of
view. It would be ideal to also interview people from these entrepreneurs’ network to see if they
have the same opinions, but since we do not have the resources for that so we accept the limited
degree of reliability.
2.4 Case study selection
Given our research design, the use of case studies would be most relevant since the type of
research question deals with operational links needing to be traced over time, rather than mere
frequencies or incidence and it would be less likely to rely on a survey. The study will examine
how the entrepreneurs use their networks, why network is important and how network has
benefited their businesses. The case study is suitable to use when “a how or why question is
being asked about a contemporary set of events over which the investigator has little or no
As we defined above, the entrepreneurs in this project will be people who organize and manage
any enterprise, especially a business, usually with considerable initiative and risk and are
profitably successful. It would be ideal but impossible to interview all entrepreneurs who meet
that requirement. Therefore we selected three entrepreneurs whose businesses are operational for
Methodology Chapter
control”. (Yin, 1994: 6,8)
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some years that we consider successful in terms of profit or have a healthy growth financially.
These entrepreneurs all have businesses in Denmark, or particularly Copenhagen for practical
reasons, as it gave direct access to the cases and made it possible to carry out face to face
interviews. We will then build three case studies about the entrepreneurs’ companies and then
analyse later on in this project.
The three entrepreneurs whom we made case studies in this project are from three companies,
namely Mond of Copenhagen, Spotonmarketing and Circal. The reason we chose these
entrepreneurs are firstly because they match with our definition of entrepreneurs. Secondly the
cases about them are exemplary cases since they all reflect strong, positive examples of the
phenomenon of interest (Yin, 2003: 13), i.e. successful entrepreneurs. The cases of these
entrepreneurs yielded exemplary results that we want to learn from. By choosing different types
of entrepreneurs, we are able to discuss whether there are similarities or differences between how
different entrepreneurs benefit from network.
3
Theory Chapter
This chapter is devided into two main sections of theories: the entrepreneur theories and network
theories so that it is clear for the readers. Under the entrepreneur theory section, we will present
theories about entrepreneurship and entrepreneurs from different authors. Under the network
theory section, we will present theories about the benefit of network and network structure,
resources, opportunities and legitimacy. We summarize the chapter by making our own “model”
of all the theories we use in order to analyze the three cases of entrepreneurs in this project.
3.1 Entrepreneur theories
The theories of entrepreneurship can act as an integrating framework in which other theories can
take place (Casson, 2005: 327). We chose Joseph Schumpeter and Israel Kirzner, who are notable
twentieth-century Austrian economists. These two theorists have contributed the most valuable
insights to entrepreneurship research and refined the academic understanding of it (Chiles,
Bluedorn, Gupta, 2007: 468). Schumpeter supports radical innovation and Kirzner is incremental
innovation theorist. Moreover, we chose other two theorists, Mark Casson and Jeffrey Timmons.
reflected relations between entrepreneur, resources and opportunities.
Theory Chapter
Casson revealed characteristics of entrepreneur, while Timmons presents model, in which is
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3.1.1 Schumpeter‘s entrepreneur
As the first modern scholar to contribute significantly to entrepreneurship theory is Schumpeter.
By Shumpeter, “entrepreneurs are heroic figures uniquely possessing the will to introduce
revolutionary „new combinations“ of products, production techniques, markets, supply sources,
or organizational forms” (Chiles, Bluedorn, Gupta, 2007: 470). In other words, it is Shumpeterian
innovator-entrepreneur, who follows radical view to creat something new. According to
Schumpeter, the entrepreneur succeeds in the maket that can offer entirely new thing (Foss,
Klein, 2002: 90).
According to McDaniel (2010), “Schumpeters’ innovation is a new product or production process
that is offered for sale and/or use in the market, while an invention as a new idea or new device
may lie idle and never be used”. This definition draw a distinction between the inventor and
innovator. However, an invention becomes an innovation, when it appears in the market place as
a new product or new production process by Shumpeter (McDaniel, 2010: 62).
Moreover, Schumpeter developed the concept of “creative destruction”. Entrepreneur, who
innovates and offers new products in the market, creates the temporary monopoly control in the
market place. This monopoly control is not long lived in the market since new entrepreneur
develop new products or new production processes and replace the previous products and
processes from previous entrepreneur (McDaniel, 2009: 63). Sobel (2008) states that entrepreneur
is a disruptive force in an economy by Schumpeter. Schumpeter emphasized the beneficial
process of creative destruction, because the introduction of new products results the obsolescence
or failure of other products. For instance, the introduction of the compact disc and the
corresponding disappearance of the vinyl record is one of many examples of creative destruction
(Sobel, 2008).
McDaniel (2009) adds that Schumpeter viewes the entrepreneur, who takes advantage of the
components of his social and cultural environment such as money and individual freedom to
enhance the material welfare of society. Schumpeter emphasised that the entrepreneurial
innovation is a creative act which deviated from the bourgeois culture by changing the status of
the economically and socially disadvantaged in society (McDaniel, 2009: 64).
not fit in Shumpeterian entrepreneur. Foss, Klein, 2002 state that Shumpeterian entrepreneur is
two types of different persons – “the calculating economic man and the visionary entrepreneur
without any link”.
Theory Chapter
There are a lot of attributes as managerial abilities, flexibility, risk-taking and others, which do
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3.1.2 Kirzner‘s entrepreneur
In contrast to Schumpeter’s view, Kirzner focuses on entrepreneurship as a process of discovery
and the basic concept of entrepreneurship is „alertness“. Alertness is the entrepreneur’s ability to
perceive new economic opportunities that no prior economic actor has recognized (Sobel, 2008).
This feature leads individuals to make discoveries that are valuable in the satisfaction of human
wants and to notice new chances to exploit. The role of entrepreneurs is based in the alertness to
„hitherto unnoticed opportunities“ by Kizner (Foss, Klein, 2002: 95). It means that entrepreneurs
can discover and exploit situations in the market. For instance, entrepreneurs can buy for low
prices and later are able to sell for high prices. Kirzner argues that the existence of disequilibrium
situations in the market implies profit opportunities. Entrepreneurs have to exploit these
opportunities, thus eliminating errors, that the economy moves towards equilibrium (Yu, 2001:
48).
Briefly Shaffer (2011) describes Kirznerian entrepreneur, who is a leader of a different form. He
has superior command over information and simply knows more, utilitize alertness, innovates by
exploiting knowledge specifically to extract profit. On the whole, Kirznerian entrepreneur is an
imitator or arbitrageur (Shaffer, 2011: 43), therefore he creates incremental innovations, which
are less innovative and tend to replicate existing forms (Jong, Marsili, 2010: 7).
Sobel (2008) presents an example of such an entrepreneur can be someone in a college town who
discovers that a recent increase in college enrolment has created a profit opportunity in
renovating houses and turning them into rental apartments.
3.1.3 Casson‘s entrepreneur
Casson pictured „his entrepreneur” and presented several features of entrepreneur by his point of
view. Casson (1982) defines that “an entrepreneur is someone who specialises in taking
judgmental decisions about the coordination of resources”. He explains that everyone makes
judgmental decisions from time to time, but only entrepreneurs focus on in this activity (Casson,
1982: 20). Judgemental decision-making is closely related with risk and uncertainty. When an
entrepreneur takes a decision based on information that is not available to other people, the other
people may perceive the decision to be risky. The entrepreneur perceives the risk as much lower,
In that way, the entrepreneur may feel confident about the accuracy of his information, but there
is possibility that not all information is correct. Casson (2005) argues, that „no item of
information comes accompanied by a cast-iron endorsement of its truth“. The perception of lower
Theory Chapter
because he has more information about it (Casson, 2005: 329).
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level of risk is an opportunity for entrepreneur to invest profitably, because other people’s
perceptions will discourage them from competing against him. On the other hand, if
entrepreneur’s perception is wrong, then investments will bring unprofitability (Casson, 2005:
330). The theory of Cason (2005) reveals that individuals are different in risk-aversion. Assessing
the risk, it can provide different access to information and subjective probabilities for the
entrepreneur.
Casson (1982) emphasises that one of the key characteristics of an entrepreneur to be optimistic
than other people and he believes that the chances of success of a new venture are higher than
other people think. Casson (2005) noted that “optimistic entrepreneurs are more self-confident,
because they believe that the additional information that they are using is correct”. This feature
reveals the comprehension of entrepreneurs that other people’s subjective probabilities are
different than their own andtheir own subjective probabilities assessment is correct (Casson,
2005: 336).
However, optimism and self-confidence reflect different aspects of personality to risk aversion by
Casson. Casson (2005) emphasises that optimism and self-confidence can be influenced in a way
that risk aversion cannot. For instance, successful entrepreneur can influence customers,
employees, suppliers that they will be more optimistic. Thus, they can become more
entrepreneurial themselves. As a consequence, influencing environment in this way, they can
improve the performance of their enterprise and, under certain conditions, the performance of the
economy as well (Casson, 2005: 331).
Generally, the „entrepreneur of Casson” is an optimistic and risk-aversive person who acts in a
volatile environment. He has self-confidence and is specialized in judgmental decision-taking
which derives from privileged information he has in his disposal.
3.1.4 Timmons entrepreneur
Jeffery Timmons with his Timmons model of entrepreneurship (Nayab, 2013) believes that
entrepreneurship is opportunity driven, or that the market shapes the opportunity. A good idea is
not necessarily a good business opportunity and the underlying market demand determines the
potential of the idea. An idea becomes viable only when it remains anchored in products or
model considers opportunities, teams, and resources as the three critical factors available to an
entrepreneur and holds that success depends on the ability of the entrepreneur to balance these
critical factors (Nayab, 2013).
Theory Chapter
services that create or add value to customers, and remains attractive, durable, and timely. The
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Entrepreneurial network 2013
Figure 1. Timmons model of entrepreneurship
(Timmons, Neck, Spinelli (in Minniti, 2007: 4))
We are well aware that the Timmon’s model holds on to three factors: opportunity, good team
and resources. These three critical factors are interlinked, with any change in one factor having an
impact on the other two and the success of the business venture depends on the ability of the
entrepreneur to ensure balance by applying creativity and leadership, and by maintaining
effective communications by Timmons, Neck, Spinelli (as cited in Minniti, 2007: 4) In this
project, we will use two factors that entrepreneurs will gain through the use of network, namely
opportunities and resources and will go in depth about that later on in the network theory section.
However, the last factor – the “entrepreneurial team” will not be looked at since we do not have
all information about the team, and we only want to focus on the entrepreneurs themselves.
We have now gone through different entrepreneur theories of Schumpter, Kirner, Casson and
Timmons. The theories fit well into our definitions about entrepreneurs and have given us
different perspectives and understanding about entrepreneurs. With this repertoire of entrepreneur
theories, we will use them to analyze the entrepreneurs we interviewed later on in this project.
We do not use all these theories in every analysis but will analyze which traits our entrepreneurs
have as described in the theories or which theory describe them best.
3.2 Network theories
up ventures since we see it as a good tool for us to analyze the networks of the entrepreneurs,
how they use them and the benefits they get from network. In order to test this hypothesis, Witt
Theory Chapter
We base on Witt’s (2004) development of “network success hypothesis” empirically for the start-
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developed three measures: The network activity, the network structure and benefits from
network.
3.2.1 Importance of network, network activity and structure
The use and popularity of the network concept by social science researchers has intensified in
recent years as the relevance of relations for business activity becomes increasingly recognized.
Network theory reveals the social links which facilitate and constrain entrepreneurs (Amit,
Glosten, Muller, 1993: 819). In the past fifteen years, entrepreneurs were no longer viewed by
scholars as economic actors isolated by other social phenomena. Instead, they were viewed as a
part of a broader context which consisted of vital social activity among the actors (Antoncic,
Hoang, 2003). Furthermore, Aldrich and Zimmer (1986) argued that the entrepreneur is
incorporated in a social network and this social network plays a crucial role in the entrepreneurial
process. The research on entrepreneurial network owes a lot to the field of sociology and more
specifically, to the findings of Granovetter (1973). Granovetter (1973) was one of the first to
vision the potentials that network research would offer on bridging micro-level interactions with
macro level patterns.
3.2.2 Network activity
Jack., S. L. (2005: 1251) argued “Network activity is a process, taking place over time, a dynamic
relationship that involves shifting; networking is a latent contacts to manifest ties, transferring
relationships to the entrepreneurial situation, identifying entrepreneurial requirements and
locating an individual within the network who can help with the actual need. It also involves a
two way process of give and take, a degree of exchange, the trading of information and resources
but only when trust is established through knowledge and experience. „
On the other hand, Witt (2004) offers three criteria to measure networking activities were:

the size of the subset of people from the entrepreneur’s network who had been involved in
founding the new organization (active network);

the density of the entrepreneur’s network;

and the frequency of communication within the network.
3.2.3 Network structure
context, nodes can be replaced with actors which can be individuals, and connections can be
replaced with social ties and bonds. The network therefore consists of a series of direct and
indirect ties from one actor to a collection of others (O‘Donnell et al, 2001: 749).
Theory Chapter
The fundamental components of a network are nodes and connections. In a social sciences
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Networks are made of strong ties (close friends and family) and weak ties (acquaintances).
Granovetter (1973) makes a categorization of the interpersonal relations or as he argues
interpersonal “ties”. The “strength” of an interpersonal tie would depend on a combination of
time, the emotional intensity, the intimacy and the reciprocal services among the ties. Based
roughly on these features there was a distinction between a strong, weak or absent tie. A network
of weak ties constitutes a low density network with greater reachability in which the entrepreneur
has informal ties to a larger number of people. In contrast, a network of strong ties is small, but
dense. Successful entrepreneurs are found to have large networks of casual acquaintance who can
provide timely and accurate information, provide access to potential customers, and introduce
them to potential investors (Amit, Glosten, Muller, 1993: 819).
Jack et al. (2010) state that networks are constituted from the constellation of dyadic, triadic and
multiplex ties between members. Networks are some sort of intermediate form, located
somewhere between markets and hierarchies, or are an entirely new form of organization.
Similarly work on social bonds of trust and commitment between ties has shed considerable light
on network interaction. The potential network partners can be other individual persons, e.g.
family members, friends, business partners, other founders, but also contact persons at
institutions such as universities, large companies, and authorities (Jack at el., 2010: 316). Figure 2
presents the form or the structure of network, also called a map of network.
Figure 2. The entrepreneur and network ties
(Jack, 2005: 1252)
Theory Chapter
ma
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Jack et al. (2010) add that the membership of the network changes over time, because the
members were not homogeneous, they had different expectations and needs and it is dependent
on the stage of life cycle, therefore the requirements of the person who has already started may be
very different from the pre-start hopeful. What starts to emerge is a tension in the network
centred round the conflict of needs or interests.There is a shift, from needing and wanting more
than motivation and business ideas, to improving communication skills, building confidence and
creating an emotional support network (Jack et al. 2010, 328).
A special part of the entrepreneurial network except from friend, family, acquaintances, business
colleagues, employees, customers is also social media. Some popularsocial applications are
Facebook, Twitter, LinkedIn, My Space, You Tube, Flickr, blogs, wikis etc. Among them, social
networking sites, in which end users create a personal profile and share and disclose information,
photos and other form of medias which allow friends, colleagues and other to have access to
those profiles, are Facebook, Twitter and LinkedIn (Kaplan, Haenlein, 2010).
Just on October 2012 Facebook social media application reached one billion users (CNN Money,
2012), which is the approximate population of the Republic of India. This index is indicative of
the massive use of this application. Social networking sites are of such high popularity,
specifically among younger Internet users. Several companies are using social networking to
support the creation of brand communities (Muniz & O`Guinn, 2001 as citied at Kaplan et al,
2010: 64) or for marketing research (Kozinets, 2002 as cited at Kaplan et al, 2010: 64). Also,
some firms even go further using Facebook as a distribution channel.
Social media allow firms to involve in constant and direct end-consumer contact at a relatively
low cost and higher efficiency than the traditional means. This makes social media not only
relevant for big multinational companies but also for small and medium size companies as well.
Using social media requires a kind of engagement and specific strategies but its gains are far from
being negligible. (Kaplan, Haenlein, 2010).
DiMicco et al. (2008-as cited in Kaplan, Haenlein, 2010) researching in technology firms found
some interesting findings about the application of social software to a corporate environment.
Contrary to individual use of Facebook-like-applications to connect with friends and family
Facebook business pages are free and have been capitalized by many small businesses by making
a fan page and “campaigning” their product and services to the wide public. The adoption of
social media in small firms has a big impact in the entrepreneurial network. Internet and the
Theory Chapter
business users tend to use these applications for connecting with weak ties. Furthermore,
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Entrepreneurial network 2013
Social media are giving birth to a new type of entrepreneur and also augmenting businesses to
developtheir services and products in a new way.
3.3 Entrepreneur’s success through network
The last one of Witt’s (2004) three measures to test the “network success hypothesis” is the
benefits from network. As Elfring, Hulsink (2004) stated, the benefit from network ties enhance
the ability of entrepreneurs in key entrepreneurial processes, such as spotting opportunities,
acquiring resources and gaining legitimacy. We understood “spotting opportunities, acquiring
resources and gaining legitimacy” through the use of network is the way to become successful
and therefore we want to use to use Elfring, Hulsink’s theory to analyze our entrepreneurs’
situations. We will also use the fraction of the Timmons model, namely the opportunity and
resources factors since they go in line with the resources and opportuinities of Elfring and
Hulsink’s theory. Though we don’t use the Timmons model to analyze the type of entrepreneurs
because it depends on if the entrepreneurs have the traits of Timmons or not, we will use the
resources and opportunity factors of the model in every analysis of our project, together with
Elfring and Hulsink’s theory to analyze about the success of entrepreneurs.
- Resources
Acquiring and securing resources is one of the crucial tasks of the entrepreneurs. An important
contribution of networks to the venturing process is providing access to resources. Entrepreneurs
rarely possess all the resources required to seize an opportunity. To access, mobilize and deploy
resources is a difficult task in the start-up stage withlimited financial resources and hardly any
ability to generate internal resources and revenues (Elfring and Hulsink, 2003: 413).
According to Brüderl and Preisendörfer (1998), social support networks as spouse or family ties
may provide an entrepreneur with thefinancial and human capital resources, which are lacking,
and consequently provide stability to the new venture in its early stages. Chrisman et al. (as cited
in Elfring and Hulsink, 2003: 412) state that sparse networks facilitate the search for critical asset
providers as investment partners and key customers, who may offer the start-up further access to
financial resources, distribution channels, production know-how and so on. However, there is
initial uncertainty about the growth of the venture and the resources it requires.
required resources need to be secured at minimum cost. It is important for start-up ventures to
maintain minimum cost for required resources, because paying the market price for resources,
such as labour, materials, advice and commitment is often too expensive. Social transactions
Theory Chapter
One of the key survival strategies is “asset parsimony” (Hambrick, MacMillan, 1984). The
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through network ties play a critical role in the acquisition of venture resources. These resources
can be acquired far below the market price, the entrepreneurs employ social assets such as
friendship, trust and obligation (Elfring and Hulsink, 2003: 412). Elfring and Hulsink (2003)
emphasise that network members maintaining strong ties are more motivated to help the
entrepreneur than those with whom the entrepreneur has weak ties. Potential entrepreneurs assess
their ability to obtain the required resources at relatively low cost on the basis of their strong ties.
The Resources Factor of the Timmon’s model
As mentioned, we will also use the fraction of the Timmons model, namely the opportunity and
resources factors since they go in line with the resources and opportuinities of Elfring and
Hulsink’s theory.
The Timmons model discounts the popular notion than extensive resources reduce the risk of
starting a venture and encourages bootstrapping or starting with the bare minimal requirements as
a way to attain competitive advantages. The advantages of bootstrapping include:

Drives down market cost

Installs discipline and leanness in the organization

Encourages creative resources to achieve more with the limited amount of money and
other resources available (Nayab, 2013)
Some of the practical applications of bootstrapping include leasing instead of buying equipment,
working out of a garage instead of rented space, and the like.
Nayab (2013) explains that the size and type of opportunity determine the level and extent of
resources required. While good resources remain scarce, businesses with high potential
opportunities and a good management team will have no problem attracting money and other
resources.
The entrepreneur works to “minimize and control” rather than “maximize and own”. The role of
the entrepreneur in managing resources includes building a good resource base to draw from
when required and drawing up a business plan through a “fit and balance” method that balances
the available resources with the opportunity and the potential of the team (Timmons, Neck,
- Opportunity
Hills et al. (as cited in Ardichvili, Cardozo, Ray, 2003: 115) indicate that entrepreneurs’ networks
are important to opportunity recognition. They proved that entrepreneurs who have extended
Theory Chapter
Spinelli, 2007: 8).
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Entrepreneurial network 2013
networks identify significantly more opportunities than solo entrepreneurs. According to Fiet (as
cited in Elfring and Hulsink, 2003: 412) use of networks may be viewed as a way of tapping into
an information channel to obtain risk-reducing signals about a venture opportunity. Therefore
network relations are seen as ways to gain access to knowledge and information. The network of
the start-up gives access to relevant information about markets, ways to serve these markets and
ways to deal with customers (Elfring and Hulsink, 2003: 410). Granovetter (1973) argues that
weak ties (including casual acquaintances) are ‘‘bridges’’ to information sources not necessarily
contained within an individual’s strong-tie network (including friends and family). Granovetter
(1973) states that casual acquaintances are more likely to provide unique information than are
close friends, because most people have more weak ties than strong (Elfring and Hulsink, 2003:
410).
Birley (as cited in Elfring and Hulsink, 2003: 412) explains in details about lucrative
opportunities. He states, that the start-up is as an iterative process in which the numbers of
informal and formal ties affect the success of the entrepreneur in finding a lucrative opportunity.
The environment and the opportunities it contains are diverse and uncertain. The network of an
entrepreneur is a source of information helping the entrepreneur to locate and evaluate
opportunities. Networks and in particular weak ties provide access regarding a diverse set of
topics, ranging from potential markets for goods and services to innovations and promising new
business practices. Weak ties are supposed to lead to a more varied set of information and
resources than strong ties can, and consequently weak ties enhance the ability of entrepreneurs to
spot opportunities (Elfring and Hulsink, 2003: 412).
De Koning (1999) (as sited in Ardichvili, Cardozo, Ray, 2003) suggests a sociocognitive
framework of opportunity recognition. This framework presents through active interaction with
an extensive network of people, entrepreneurs evolve opportunities by pursuing three
cognitiveactivities: information gathering, thinking through talking, and resource assessing. This
network includes the entrepreneur’s inner circle (the set of people with whom an entrepreneur has
long-term, stable relationships, they are not partners in the venture), ‘‘action set’’ (people
recruited by the entrepreneur to provide necessary resources for the opportunity), partnerships
(start-up team members), and a network of weak ties (a network used to gather general
(Ardichvili, Cardozo, Ray, 2003: 115).
The Opportunity Factor of the Timmon‘s model
Theory Chapter
information that could lead to identifying an opportunity or to answering a general question)
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Entrepreneurial network 2013
Timmons also appreciate of opportunities in entrepreneurship just like Elfring and Hulsink.
Though the perspective are different, but they all contribute to a better understanding of how the
entrepreneur seizes his business opportunities.
At the heart of the entrepreneurship’s model is the opportunity. The main theoretical advances
regarding opportunity are sourced from Hayek on the dispersed nature of knowledge and Kirzner
on entrepreneurial alertness. Successful entrepreneurs and investors know that a good idea is not
necessarily a good business opportunity and the underlying market demand determines the
potential of the idea (Timmons, Neck, Spinelli, 2007: 5). Opportunities have the qualities of
being attractive, durable, and timely and are anchored in products or services that create or add
value for costumers or end users. The most successful entrepreneurs, venture capitalists, and
private investors (business angels) are opportunity focused and maintain a keen understanding of
the customer and market. The size of an opportunity is determined by the depth of its impact.
Thus, market structure and size are necessary antecedants of high potential opportunities
(Timmons, Neck, Spinelli, S. 2007: 6).
In short, Timmons model starts with a market opportunity. The business plan and the financing
receive secondary importance, and come only after identification of a viable opportunity. The
model holds that a sound business opportunity would readily receive financing, and identification
of the opportunity first makes the business plan failure-proof.
- Legitimacy
The third contribution of a network to the success of a start-up is the way it opens possibilities to
gain legitimacy. Suchman (1995) defines, that “Legitimacy is a generalized perception or
assumption that the actions of an entity are desirable, proper, or appropriate within some
socially constructed system of norms, values, beliefs, and definitions..”. Aldrich and Fiol (as
cited in Elfring and Hulsink, 2003: 13) draw a distinction between cognitive and socio-political
legitimacy. Understanding the nature of the new venture is referred to as cognitive legitimacy. It
has to do with the spread of knowledge regarding the new business concept. To overcome this
legitimacy barrier, network actors, such as competitors, distributors and universities, must be
mobilized to create partnerships in order to achieve a wider understanding of the new concepts.
The second, and related, type of legitimacy is labelled socio-political legitimacy and refers to the
accepted rules and standards. Achieving socio-political legitimacy is particularly difficult when
the new venture is very innovative and challenges existing industry boundaries. In those cases
changes in the institutional framework are often required. Organizing socio-political legitimacy
Theory Chapter
extent to which key stakeholders accept the new venture as appropriate and conforming to
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Entrepreneurial network 2013
requires collective action, negotiations with other industrial constituents and joint marketing and
lobbying efforts (Elfring and Hulsink, 2003: 13).
The concept “the liability of newness”, which refers to greater risks of failure that new firms face
compared with older ones (Danes at el. 2012: 4). Established ventures have a set of
institutionalized roles and tasks, experienced constituents, stable customer ties, a surplus of
capital and slack creativity, and a shared normative framework at their disposal, all of which
contribute to an effective provision of goods and services and their ultimate survival (Danes at el.
2012: 5). On the other hand, Elfring, Hulsink (2003) notes that new ventures are more likely to
fail just because they still have to develop and acquire those prerequisites. Faced with the concept
“liability of newness”, a new venture has to organise institutional support, legitimacy and seek to
obtain a prestigious business affiliate to build up a strong link. Through this key contact, they will
have access to new customers and partners.
3.4 Summary
All the theories mentioned in this theory chapter will help us significantly in analyzing what type
of an entrepreneur the entrepreneurs we interviewed are, what kind of network structure they use
and how can these networks contribute to the success of their businesses. For the analysis of the
entrepreneurs’ network, we will apply the three steps that Witt (2004) used when he wanted to
test his “network success hypothesis”: the network activity, the network structure and benefits
from network.

The network actitivites will be the important activities of the entrepreneurs from the
startup phase to seek for network or use network to support their businesses.

The network structure will be analyzed using the concepts of “weak” and “strong ties”
from Granovetter(1973) and Jack (2005). Network structure is analyzed within the limit
that the entrepreneur has described. This means that the network structure due to the
limitations that qualitative method offers can not be pictured in its full extent.
Finally, for the third measure, i.e. benefit from network we will use the three factors of
entrepreneurial process which are the discovery of opportunities, gaining resources and
acquiring legitimacy, from both Elfring & Hulsink (2007) and the opportunities and
resources factors from Timmons (2004) because the theories are closely related, and see
how entrepreneurs are benefited from networks due to these three attributes.Therefore, we
draw this standard frame based on the links of all theories mentioned, and apply to each
analysis of the three cases as follows:
Theory Chapter

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Entrepreneurial network 2013
Figure 3. Our generic model to analyze the type and the network of the entrepreneurs
The „bubbles“ in the top of the model indicate the name and type of entrepreneurs where all the
theoriests about entrepreneurs in the theory chapter are stated. From then we will analyze and see
which entrepreneur in our project has the traits of which theorists. The network activity row
includes different activities of that the entrepreneurs, throughout the operation of their ventures,
seek for and/or maintain their network. The structure of network row includes the categorizations
of network ties, which can be either weak ties or strong ties or the combination of both. The
benefits of network row includes resources, opportunities and legitimacy which the entrepreneurs
get access, secure and gain through the use of network. The top down arrows in the left illustrate
a cause-effect relation, in which the third one is the result of the first two.
4
The cases and analyses
4.1 Mond of Copenhagen
Mond of Copenhagen is a 100% Danish brand whose primary products are tailor-made suits and
shirts for individuals as well as businesses. Their products are made based on the idea that
everyone should be able to afford the luxury of owning a customized product. The concept was
launched in early 2009 under another name, and Mond of Copenhagen was not born until 2 years
ago. The name Mond of Copenhagen comes from different words such as Mondæn, which is
The cases and analyses
What is Mond of Copenhagen?
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Entrepreneurial network 2013
fashionable or stylish, Diamond and Richmond. Since the start, Mond of Copenhagen has made
and delivered suits to some of the largest companies in the banking, insurance, audit and legal
advice. Mond of Copenhagen is also the sponsors of tailored suits and shirts for Football Club
Nordsjælland FNC. Since February 2012, the Mond of Copenhagen delivered over 70 tailored
suits for players, coaches and administration for the Danish champions and FCN since then has
become an important partner of Mond.
When the customers want to have a tailored made suit or shirt, they come to Mond and choose
the fabric and styles within the company’s standard frames. The samples of fabric are numbered
and they have the same fabric with same numbers in India in the production center. The
customers’ body will be measured by the ‘revolutionary’ 3D body scanning technology which is
firstly used in Europe. With the 3D scanner, the company is able to map the client's body shape,
and extract over 400 different targets with a precision that even the most experienced tailor
cannot do. The scan itself is harmless, and takes approx. 30 seconds to complete. The result is a
complete reproduction of the customer's body measurements, posture and possible flaws or weak
points. The 3D pictures with customers’ choice of style and fabric will be sent to the company’s
designers and production in India. The product will then be made according to all the information
and then sent to Denmark after 6-8 weeks. The whole process is to insure a tailored suit of high
quality, both in terms of materials and fit. By outsourcing the production in India, the company
can focus on marketing and sales in Denmark.
For further ensure the perfect fit, Mond of Copenhagen offers adjustment warranty on all tailored
suits. That is, in the case of the product must be fixed, it will be done at the company’s Danish
tailor with no further expense for customers. Mond of Copenhagen guarantees a suit with a
perfect fit, and 100% customer satisfaction.
The entrepreneurs and company’s history
The company was started by two young entrepreneurs Michael, 27 years old, and his brother
Martin 24 years old. Michael studied at Niels Brock AP degree innovation line for 2 years, then
Bachelor’s degree at Roskilde University, and dropped out of CBS candidate degree after just 3
with a business background in HHX and CBS, is in charge of the company’s development and
back office activities.
Even though with only under 2 years of operations, Mond of Copenhagen has seen its healthy
growth. In the first year of business they made roughly 800,000kr in turnover and breakeven in
terms of profit, which according to Michael is a very good result since they invested in the 3D
The cases and analyses
classes due to lack of time. He’s in charge of finance and sales at Mond while his brother Martin
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Entrepreneurial network 2013
scanner and other facilities to run the business. Even though with the recent un-ideal location,
which is hidden in a building behind the post office in Frederiksberg, the two were surprised by
how much sales they made in the first year. This year they expect 1.8 to 2 million kroner in
turnover. And with the new location that they are moving to, the sales will be expected to grow 3
to 4 times as much.
Financially, the brothers did not ask for any help from external sources. They want to invest in
the company in an “organic” way, i.e. invest by their own money and do not want to borrow a lot
from banks. They want to expand while they are making money and are not so worried about
growing so fast. Michael revealed that they are not too worried about building brand at the
moment either as the brand will come eventually and brand will associate with the product. So
right now they focus more on the satisfaction of the customers. The key success factor of Mond
according to Michael is to be nice to people. “Being nice to people has opened an amazing door,
when people like you, they will come back to you”. By that motto, many customers were very
supportive and showed sympathy even through tough times, such as delay of delivery or when
the product has not yet met the satisfaction of customers. But since “I like you guys”, some
customers have even become their friends.
The business idea was started by 3 partners under another name, the two brothers and one friend
with the “push” marketing strategy. They would go to big B2B customers, offer discount,
measure and sell directly to the customers at their businesses. But due to the level of services
provided was not enough and though they go to the shop but the customers still need to come to
the shop to try the product anyway, the push strategy was not effective. And the sales was not
stable, sometimes they could spend the whole day at the big companies and made no sales. And
even the target was to sell to B2B, sometimes they ended up selling to some employees of those
businesses. They then decided to change the marketing strategy to “pull” by opening a shop,
investing in the 3D scanner and got the B2C customers to come to them. And with the
disagreement between the partners, Mond of Copenhagen was born by only the two brothers. The
company had another employee who was in charge in marketing activities, especially with FCN
and a student intern for 6 months who took care of different projects, among other with KEA
the two brothers.
Network means everything for Mond, especially in the start-upphase, the entire business was
based on network. In the very start, families and friends were most important. There were only
friends and family members who bought suits and shirts and helped with setting up at first. Little
The cases and analyses
(KøbenhavnsErhvervsAcademy). But at the moment, allbusiness activities are taken care of by
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Entrepreneurial network 2013
by little, the two brothers created network with business people. They attended different business
forums, one of them was Business network International which had meetings once every week.
There they met a person named Jacob and he introduced the two to other networks of his, which
in turn brought major of advantages to Mond. Also through Jacob, they got the partnership and
sponsorship with FCN, which marked a milestone to the business.
FCN has been the key important network of Mond and they have built brand with this club.
Through FCN, they are allowed to talk with the most influential people in the Danish Businesses,
owners of all the big businesses, make agreements with them, come to a lot of events. By asking
“Can we come there”? “Can we come there?” they made friends and expanded their network with
business people significantly. Gradually, some of the business associate people have also become
their friends.
The two brothers have researched in different Asian countries for their outsourcing production for
instance Thailand, Vietnam, China and India. But due to the matter of communications, quality
and costs, they decided to choose India. The two contacted the Danish trade office in India to ask
for help. This office then helped make the research and found different production places.
Social media has also been important tool of networking. Facebook, Linkedin are used to be
promotional tools, but Linkedin has another important function of creating professional network
and actually can help making a lot of money for them. Michael revealed that families, friends and
business associate are of equal importance for their business. While families and friends are
always there to support them, business associate brings turnover to the business. Due to the
matter of time and resources, the two brothers mostly talk, contact and spend time with families
and friends while maintain the network with business associate through Linkedin.
4.1.1 Analysis of Mond of Copenhagen
Type of entrepreneur
The type of Mond of Copenhagen entrepreneurs will be analyzed based on the entrepreneurs
theories above. Mond of Copenhagen entrepreneurs have some characteristics of the Casson
the future as they mention in the interview. They are “acting” in a volatile environment of
competition and instable economic environment. Furthermore, a feature of the Casson (2005)
entrepreneur which is “the judgmental decision making” can be distinguished to them while they
had to make a determinative change in the early stage of the firm when they had to convince
clients to come to their shop instead of themselves pointing out the high level of service provided
The cases and analyses
(2005) entrepreneur. Both of them are confident and optimistic since they have a clear vision for
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Entrepreneurial network 2013
(Pull marketing strategy). Also, we can distinguish technological innovation of an incremental
style (Kirznerian) in this company, while they use a revolutionary 3D body scanner machine for
more precise measurements, which is innovative in the field of tailored clothes and the first
company in Denmark to use this technology.
The Mond entrepreneurs are successful in terms of the success variables of Brüderl and
Preisendörfer (1998). In terms of sales growth, the first year of the operation of Mond in
themarket they had in terms of profit 800,000 DKK,while the future seems brighter in terms of
sales since the shop will move to a more frequent and commercial area and this is expected to
bring an increase on sales up to three-four times. In terms of the survival variable, in their third
year of operating Mond not only managed to survive but also grow in terms of sales and profit.
Finally, in terms of employment growth Mond which initially began with only two people had
previously two other employees. However, their relocation will demand a raise in terms of
employees.
As we mentioned above, we will focus in the entrepreneurial network in three dimensions.
Network activity, network structure and benefits from network.
Network activity
Firstly, we look at the creation of entrepreneurial networks and the efforts done to create and
develop the network which we understood as “the network activity”. In the very beginning phase
the network activity started within the closest environment and relations of the entrepreneurs. In
the startup phase, these entrepreneurs used their closest network by taking support from friends
and family. Friends and family were the first who supported them emotionally and also
financially, not in the sense that they helped lend money, but buy shirts and suits. Then, the
founders of “Mond of Copenhagen” turned then to some “professional” help in order to build a
network from an organization called BNI Connect. This organization gives the new entrepreneurs
the opportunity to connect to a group of 40 business members by organizing weekly meetings and
events with the aim of creating new connections and business partners (BNI Connect, 2013). This
was a significant move because it helped them meet and be introduced to new people and
in his networks and helped to connect with FCN has turned himself from a business associate to a
friend or a “weak” to a “strong” tie. The “networking activity” through BNI was very active in
the startup phase. They participated several times in these weekly meetings and met some people
and as Michael says “you know someone and they introduce you to someone else and then you
get to their network”. The “networking activity” is declining as Mond is growing, perhaps
The cases and analyses
potential clients from this “community”. Jacob, the key person that recommended Mond to others
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because they have already sustained a specific network and a clientele and they are occupied with
other activities of the venture such as the imperfection of client services, market research,
marketing tools etc. As Michael says “right now we are so busy that might be some of the thing
we tone down a little bit“ Nonetheless, growing the entrepreneurial network is still a priority and
the entrepreneurs keep on developing their entrepreneurial network to other directions : “maybe
we‘ll focus more on getting famous people as a network… and actually quite of our focus right
now, because it draws and draws more people in that way.“
Network structure
Second step of analysis is the “network structure” or the structural characteristics of a network in
a specific time. For this purpose we will use the categorization of “weak” and “strong” ties which
Granovetter (1973) has made. In the startup phase the entrepreneurial network was consisting of
its majority of “strong” ties such as family members and friends but also from some
acquaintances which were aware of their activity (weak ties). Afterwards, when the entrepreneurs
met BNI Connect, which proved to be a significant partner, which helped Mond expand its group
of weak ties relations. Some business members of BNI in the future of the venture were
transformed from “weak” to “strong” ties. Customers as well, are part of Mond’s network.
Customers who initially were considered as weak ties in the future were also, turned to strong
ties. As Michael says “It happens Sometimes people just dropped by, before when we were not
this busy, Fridays would normally be a day where we would have a beer or relax.” Later on,
when Mond had earned some confidence and recognition the use of social media turned to be
also, useful to them. Social media are considered to be a weak tie for Mond of Copenhagen but
especially Facebook became a powerful professional tool for them. As Michael says “we are very
professional with Facebook and very careful in the way we use it, we wouldn’t do anything to
damage us”. Also, LinkedIn is another social media means, although it is less used than
Facebook and can be considered as a weak tie. Generally, the use of social media is an integral
part of the network of “Mond” since they have developed profiles of the company and they are
very strategic on using it. Social media are considered as weak ties because they are characterized
Benefit from network
Third, the economic benefit that comes from different network partners is the last step of
analysis. In order to “measure” somehow the economic benefit as we have mentioned, we will
extend through the benefit the entrepreneurial network has on discovering opportunities, gaining
resources and acquiring legitimacy for the entrepreneur.
The cases and analyses
of formal relations with little emotional engagement.
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Entrepreneurial network 2013
Opportunities
In terms of opportunity, getting acquaintance to BNI and especially Jacob and the business
Associates from this network turned to be a smart move since the connections made there led
Mond to gain access and knowledge for potential clients or cooperations. One of them was also
FCN. Now Mond of Copenhagen” is a proud sponsor of tailored suits and shirts for FCN premier
league.” (Mond, 2013). The social media (weak ties) due to the massive use of them currently,
has helped also in discovering opportunities. Colleagues and employees (strong ties) have also
assisted on searching for opportunities. While in the startup phase, when Mond was seeking for
new suppliers in India the Danish Trade Office (weak tie) contributed in their effort to find new
opportunities in production facilities and professionals of the clothing industry. Moreover, in
terms of finding new practices in the market, the internship of a student from KEA( Copenhagen
School of Design and Technology) , which is a weak tie, has opened a new opportunity for Mond
to a cooperation with KEA, and it could lead to finding lucrative opportunities for them. For
Mond the recognition of opportunities came from information gathering from BNI, thinking
through talking with the business associates and through resource assessing (De Konning, 1999)
Resources
In the beginning phase of the company it was crucial for the entrepreneurs to operate through the
“asset parsimony” (Hambrick and McMillan, 1984, as cited by Elfring and Hulsink) level and
work with the minimum cost of resources. It is also called the “bootstrapping” strategy from
Timmons. That is also the case at Mond where they use the student intern to save costs and
outsourced the production to India to avoid the huge production costs and make the company
viable, especially since they are a small company. In terms of securing resources, their personal
social network consisting of friends of family, not only contributed directly in the firm by being
the first clients of Mond but also their presence were more supportive and encouraging when the
firm most needed it. According the financial resources, they were supplied by the founders
themselves. Due to the fact that they are brothers and consequently their relation is characterized
as “strong tie” we can say that in this case the fundamental financial resources were required by
the strong ties of the entrepreneurial network. However, literature emphasizes that weak ties are
in terms of finding key customers and distribution channels of their product Business associates
from the BNI network, which are considered as weak ties, were very helpful according to the
entrepreneur.
The cases and analyses
more effective for the entrepreneurs in terms of finding resources (Jack, 2005: 1238). In this case,
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Legitimacy
Stinchcombe (1965: 148-150) has initially mentioned the term “liability of newness” which can
be rephrased as young organizations face higher risks of failure than older ones (Elfring, Hulsing,
2002). This means that the new entrepreneur have to be acknowledged for his work and therefore
supported by another organization which is widely recognizable and prestigious. Danish Trade
Office in India (weak tie) opened too many doors in India. The Danish Trade Office in Indiais
considered to be aprestigious organizationbecause it is a diplomatic representative institution of a
country which has a great economic-political-diplomatic dimension such as Denmark. That can
serve as a guarantee for the quality of the entrepreneurs that the craftsmen of India are dealing
with. Also, FC Nordsjælland (weak tie that further become strongtie), the football club that Mond
is the sponsor, may serve as asocio-political legitimacy tool while this football club is widely
popular to the public.
Since network benefited in these three processes, we can roughly say that it have benifitedMond
in having positive economic outcomes and therefore have influenced in the success of the firm.
The type of entrepreneur of Mond of Copenhagen and his use of network will be viasualized in
Figure 4. Entrepreneurs of Mond of Copenhagen‘s network
The cases and analyses
the graph below:
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Entrepreneurial network 2013
4.2 SpotOn marketing
What is SpotOn marketing?
Spoton marketing is an online maketing agency, who through the internet, strategizes and
strengthens the customers‘ businesses (B2B) by connecting the customers with relevant end users
from their local areas. Their customers are typically the service providers that have high and long
time value for end users such as dentists, plumbers, cartenpers, lawyers, accountants and so on.
At the moment, Spoton marketing offers three solutions to the customers:
Pay per call – or pay per lead, an effective and transparentperformance base model where a call
tracking method is used, where the company uses the meter to track calls for the customers.
Customers only have to pay when they get something of value, i.e. they get charged only when
Spoton marketing brings them customers or potential customers. Customers will get relevant calls
from the end users who are interested in their businesses from their local areas. With the concept
„No cure = No pay“, customers can control how many calls they want to buy every month. In this
way the budget is adjusted 100% to their wishes. This concept was changed just last September
from a subscription model, where customers pay about 2500-5000 kr for a total online
management package. Though it was a succesful model, it was hard for the small businesses to
pay such amount. Spoton marketing offers the visible measurement for the results of the
customers‘ marketing so they know exactly how much they get out of their investment.Since
Spoton marketing is the only company in Denmark that provides this service and has experienced
great customer approach, we even have to reduce Pay Per. Calls to the nich market, including:
carpenter, dentists, masseurs, cleaning, plumbers, and psychologists.
Build websites for local businesses
When customers need a professional website that is built to give their local business many new
customers, they can come to Spoton. Spoton can design a beautiful website which is guaranteed
to generate calls, e-mails and visitors into customers. The infatuated website designed by Spoton
will make sure visitors stay longer on the website. The website is user-friendly and convenient so
that mobile phone users can benefit from it. The website is also visible so Spoton will make sure
are.
LocalBooster
Localbooster contains everything customers need to get many new customers for their local
business. With the LocalBooster package, customers will get a website completely free of charge.
The cases and analyses
that the customers‘businesses come out on top in Google and will be shown where the end-users
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Customers are also provided with monthly statistics on all the visitors who have been on their
website and how many visitors we have converted into paying customers. Customers will no longer
need to guess where their calls come from. With an advanced tracking system from Spoton,
customers can see exactly from which parts of their website the calls are from, for exapmle if
people come from Google or Facebook. Based on these data, Spoton will optimize their website
so customers get even more calls. The statistics will also show exactly what customers pay for and
how much value Spoton has created for their business in terms of new customers.
The entrepreneur and the company‘s history
The company was founded by Simon Salomonsson in 2011. Simon is originally from Jylland. He
studied the gymnasym at Niels Brock for 3 years and then Philosophy and Economics at
Copenhagen Business School. Before starting the company, Simon traveled the world working
online and making websites. When he was „tired of working in his bedroom and with suitcases“,
Simon decided to start something „for real“. At that time Simon saw that nowadays people are
using lots of smart phones and internet to search for things, globally and locally rather than using
the„yellow pages“. He saw the small local businesses have a lot of problems adapting to this
change of environment and technology. With his experience of working with affiliate marketing,
he knew there are lots of opportunities online, but local businesses donot know how totake them
and that is how he decided to start Spotonmarketing to help the local businesses.
Simon spontaneously saw on the internet that the Incubator at Niels Brock was helping young
entrepreneurs to start businesses free of charge where the entrepreneurs got a free office and get
help professionally. He started the business there for a year. By that time he was still a student. In
the first year, he didnot have a lot of money but didnot spend a lot either. He decided to grow
organically, he would not spend if he did not make money. He had his own computer, the office
was free, he wrote his own business plan and got free advice at the incubator. He didnot pay
himself salary in the first year. When the business was at 7 months old, Simon started to hire the
first employee. Two months afterwards, Spoton hired some interns to save money and get more
resources for the business.
Spotonmarketing has been working for 400 local companies (Spotonmarketing website). In terms
of turnover, the company earned roughly 200,000 Kr at the first year of operation. In the second
year, it jumped ten times to 2 million Kr. This year they expect 6 million and next year about 10
to 12 million Kr. The number of employees also had to increase to adapt to the level of growth.
After 1,5 years of operation, the company has employed 10 full time and 4 part time employees.
The cases and analyses
The company has been growing amazingly fast. Although only in operational for two years,
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The company also plan to grow even faster and broader to foreign countries like England,
Germany, Sweden in very near future.
Network means alot to Simon and Spotonmarketing. At the startup, he got a lot of professional
connections at the incubator that helped him through all the obstacles of his business, from legal
problems, problems with authority, accounting, administration, morality, and even in bad times
where people are sour. Through the network of entrepreneurs there, he got introduced to their
professional network. He also got a chance to talk in many conferences, where he could brand
himself and the company. He has a lot of friends in the incubator where he often contacts and
spends time with.
Then he started to have the first dentist client, Peter, which later on became a very good friend.
Peter was very good at recommending Simon, especially to his dentist network, and from then
Spoton has got a lot of dentist clients. Peter was even making a video saying how much he
earned, and talked all the rosy words about Spoton. More importantly, Peter is a very welknown
dentist in Denmark, everybody knows him. So everytime Simon is at a conference or out
speaking, instead of talking good about himself and the company, he just turns the video on. Peter
and Simon talks often, they sometimes have a cup coffee, and Peter has become a friend other
than merely business associate.
From his social network, Simon knows a person named Barbar who is famous in app/mobile
environement. Barbar has helped a lot in bringing customers to Spoton, namely Winne the Pooh,
transformers, my little pony, Egmont, Vivino. Through Barbar‘s network, Simon also got
outsourcing contacts in Philippines and Pakistan. His business partner at the moment, Rasmus
Hoeks, who has responsibility for product development and with the overall responsibility for
technology in the company was happened to be a person Simon met 6 years ago in Thailand.
Rasmus has previous experience as owner of 3 various online businesses, but has now sold them
off to focus 100% on SpotOn.
Interesting enough, though Spoton marketing offers online marketing and helps customers
connect to end-users on their websites and social media, they do not use so much for their own
Simon personally uses social media and get some out of it but not so much for the business. He
doesnot focus or emphasize on it because it requires resources. He connects with people on
LinkedIn when they add him, he updates relevant news on Twitter for business and upload videos
of himself on You Tube, but not so much of using social media.
The cases and analyses
company.
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4.2.1 Analysis of SpotOn marketing
The analysis of SpotOn marketing will also be inline with our generic model of entrepreneurs and
network above, i.e. we will also analyze the type of entrepreneur, his network activities, his
structure of network and the benefits he achieved from using network.
Type of entrepreneur
Simon Salomonsson has the entrepreneural characteristics that are described in the Timmon
model. (See p.16 above) For Simon, the market has shaped the opportunities where he realized
that people nowadays are using a lot of smart phones, APPs and Internet to search for things they
need instead of the „yellow pages“, while the local businesses do not know how to seize the
opportunities or do not know how to do online marketing. With his expertise and experience of
many years in affiliate marketing, he turned the business idea to a service that creates and adds
tremendous value to the customers. Simon revealed „one of our customers earned 200,000
dollars within 8 months and they only had to invest 6000 dollars on us, so it is a very good return
on investment“. On SpotOn marketing website, there are a lot of references from their customers
where they talk about how SpotOn helped them earn more money, get more customers, save
money or get more visitors to their website. The customers get more customers for themselves,
and it is also a lot easier for the end-users to find the business providers they need by just a few
clicks.
Simon is seen as a very succesful entrepreneur. Looking at the three measures of success from
Brüderl and Preisendörfer (1998) which we mentioned in the „Interpretation and demarcation“
section, we can see that SpotOn marketing is not only survival but also achieving employment
growth and sales growth. Within the one and a half years of operation, the number of employees
increased to ten employees. As a service company with no heavy investment in machines or
infrastructure as Simon said „the only thing we invest in the business is employees“. The company
grows organically and does not have any debts. SpotOn marketing is actually growing dizzily
fast. The company made ten times as much in turnover just from the first to the second year, and
it keeps on growing 3-5 folds as high in the coming years. When asked if he was afraid of
planning to grow even faster and going outbound in European market in the near future. When
we asked if it would be a problem if customers can learn to do online marketing themselves such
as how to use SEO and Google Analytic tool, Simon was not afraid and said „people should focus
on what they‘re best at. The whole society depends on people who have expertise and we work
The cases and analyses
growing too fast, Simon said he was not afraid and in fact was very excited. The company is
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Entrepreneurial network 2013
24/7 to study about this field“. So he is very optimistic about the business and the growth of the
business.
Simon‘s company is a very innovative business, but in an incremental way as described in
Kirzner theory. Even though they have created high value to customers and according to
Spotonmarketing, they are the only company in Denmark that provides the pay per call service, it
is not a disruptive innovation as if people invented airplane or telephone or similar. There are
many online marketing service providers in the world, as well as in Denmark. What Spoton
marketing is offering is a „change“ from the usual businesses or/and adds more value than other
players on the market can do. This „change is generated from inside the economic system”.
Network activities
We will base on Witt (2004) three criteria to measure networking activities, i.e. the size of the
subset of people from the entrepreneur’s network who had been involved in founding the new
organization (active network); the density of the entrepreneur’s network; and the frequency of
communication within the network to analyze the network activities of SpotOn marketing. Right
in the startup phase of the business, Simon searched for a network that could provide professional
help. He found out the incubator at Niels brock on the internet and started to build and develop a
very strong relationship with this network. Being among many young entrepreneurs just like
himself, Simon made friends with them, frequently communicate and shared knowledge, used
their support and network to get through all the obstacles from the startup. Simon said „They
know people, and introduced their network to me, like „I found my lawyer“. So when you‘re new
to a network as I am, when you work with yearly report, that can be a lot of unknowns, through
my network I get introduced to the people that they trust. Through that I get qualified help,
instead of going over myself.“ He also maintains this network by seeing the incubator friends
quite often, as they are growing together from the start.
Simon also uses his clients network – the dentist network to access to the network of this
customer. „ I was lucky to get introduced by Peter. He recommended me and has done a lot for
me“said Simon.This is surely a matter of luck that he got recommended from a kind customer,
With other customers in general, Simon builds and maintains a good relationship with them by
providing them good services, having good communication and be there when they need support.
In his social network, Simon also uses Barbar‘s, a friend of his, network to get connect with other
big customers such as Egmont, Vivino, Winnie the Pooh etc. Simon also used Barbar‘s network
The cases and analyses
but it was also a smart move that he actually uses it and build a strong network with this dentist.
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to findthe outsourcing contacts in Philippines and Pakistan. Then later on in the business process,
Simon partnered with Rasmus Hoeks, a person he met in Thailand. This is another utilization of
Simon‘s connection in his social network.
Simon also uses social media for his business. Though not so much, but the use of Linkedin and
Tweeter has brought business connections and customers to Spotonmarketing. He said „We admit
that we are weak on the inbound marketing but that‘s fine as we don‘t focus or emphasize on it. I
use Linkedin when people add me, I also update status on Twitter for the business with relevant
news and I get customers from there“. He uses social media to brand his name so that when
people search Simon and there are lots of videos on You Tube.
Network structure
Not like other startup entrepreneurs, Simon didnot use the network of family and friends to start
the business. His family, girlfriend and friends were supportive but they couldnot really help him
start the business. Simon said „They were helpful and supportive, that‘s important but they did
not really help with the business. When you‘re committed and really wanna do something, it‘s
hard for other people to give advice because they don‘t have the whole spectrum“. But later on in
the interview, he was drawing his network ties, he mentioned that he got some contacts from
some lawyers and accountants from some of his family‘s network. So in accordance with our
definition and theories about network, we can interpret that generally, Simon did not use his
strong ties for the startup phase of his business.
On the other hand, as Amit, Glosten, Muller (1993: 819) argues, „a network of weak ties
constitutes a low density network with greater reachability in which the entrepreneur has
informal ties to a larger number of people. Successful entrepreneurs are found to have large
networks of casual acquaintance who can provide timely and accurate information, provide
access to potential customers, and introduce them to potential investors“, that is the case of
Simon. He has used and exploit positively his business network or casual accquaintance, which
can be interpreted as weak ties.
members were not homogeneous, they had different expectations and needs and it is dependent
on the stage of life cycle“ many people in Simon‘s weak ties have become strong ties.
Particularly, from the entrepreneur friends in the incubator; to the dentist customer Peter who
from the business relation became a friend where they talk and meet for a cup of coffee; a person
he met by chance became business partner and then Barbar; a person who he did not mention as
The cases and analyses
As Jack et al. (2010) mentions „the membership of the network changes over time, because the
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Entrepreneurial network 2013
close friend since he said „Barbar, a guy I know“; all of these people according to us have turned
from weak ties to strong ties, some are very strong ties such as with the network in the incubator.
Simon shared „We just came home from America, in Miami. A friend of mine got married to an
American girl and we were 5 from the incubator who went there. We‘re very close, we still talk
together and that‘s very important. That‘s the network I trust a lot, we speak a lot about economy
and everything“.
The use of social media such as Linkedin, Tweeter, Facebook and Youtube, even though not
critical but they are considered as weak ties network that have also contributed in the success of
the business.
Benefit from network
The benefit from network is again analyzed to see how network has helped the company gain
resources, opportunities and legitimacy, based on the study of Husink & Elfring and Timmons‘
model.
Resources
The resources of SpotOn marketing came mainly from the entrepreneur himself. It is one of the
„asset parsimony“ (Hambrick and MacMillan, 1984, cited by Hulsink & Elbring, 2003) and the
„bootstrapping“ strategies, mentioned in the resources factor of the Timmons‘ model where
Simon tried to operate the business with minimum costs. At the startup phase, Simon worked to
“minimize and control” rather than “maximize and own”. His role in managing resources
includes building a good resource base to draw from when required”. He wrote the business
model himself, he read a lot of books about how to do business and he has experience and
expertise from working with online marketing. The network from the incubator has also brought
a lot of resources to Spotonmarketing. Since first of all he got a free office, free advice and
professional helps with all the obstacles of startup business such as legal problems, accounting,
administration and so on. Later on he used the work of interns to get free resources. The plan to
grow organically also proves that Simon tries to manage and control the resources effectively.
fulltime employees instead, but that kind of resources he of course needs to pay. While Simon is
the managing director of Spotonmarketing where his takes reponsibility in all the daily issues
with employees, partners and customers of the business; his business partner, Rasmus, is also a
big resource of the company where he is responsible for the product development and technical
part of the company. But again, this kind of resources is not free either.
The cases and analyses
As the company grows, the use of interns diminished since the business leveraged and he hired
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Entrepreneurial network 2013
Opportunity
Applying the opportunity factors of Timmons, we can see that Simon aware of the business
opportunity when he saw local businesses didnot know how to market and manage their business
so he realized the opportunity into a service that adds value to customers. Timmons argues
“Opportunities have the qualities of being attractive, durable, and timely and are anchored in
products or services that create or add value for costumers or end users.”
In finding out how he developed that opportunity further by using network, we will apply the
opportunities factor of Hulsink and Elfring.
“The network of an entrepreneur is a source of information helping the entrepreneur to locate
and evaluate opportunities. Networks and in particular weak ties provide access regarding a
diverse set of topics, ranging from potential markets for goods and services to innovations and
promising new business practices. Weak ties are supposed to lead to a more varied set of
information and resources than strong ties can” (Elfring and Hulsink, 2003: 412). Granovetter
(1973) also argues that weak ties are ‘‘bridges’’ to information sources not necessarily contained
within an individual’s strong-tie network and that also proves to be true at SpotOn. The network
of the incubator has, supposedly, given Simon access to relevant information about markets,
ways to serve markets and ways to deal with customers” (Elfring and Hulsink, 2003: 410). It is
an extremely important network that helped Simon locate and evaluate business oportunities.
Through the network of entrepreneurs in the incubators, Simon got to know the relevant and
professional business contacts that helped his business. Also through the incubator, he got to talk
about his business to first of all the students at Niels Brock and other entrepreneurship
conferences.
Other weak ties (which later became strong) that have given Simon access to information about
markets, ways to serve market and customers are his dentist customer/friend, Peter who gave him
information and introduction about the dentist network and Barbar, his acquaintance, who gave
him information about some big customers for SpotOn.
Network has opened possibilities for Simon to gain legitimacy. Aldrich and Fiol (as cited in
Elfring and Hulsink, 2003: 13) mentioned a distinction between cognitive and socio-political
legitimacy. In which Understanding the nature of the new venture is referred to as cognitive
legitimacy and socio-political legitimacy and refers to the extent to which key stakeholders
accept the new venture as appropriate and conforming to accepted rules and standards. In the case
The cases and analyses
Legitimacy
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Entrepreneurial network 2013
of SpotOn, we can see that network has benefited them in gaining cognitive legitimacy.
Particularly, through the incubator, Simon can „spread of knowledge regarding the new business
concept” and created “partnerships in order to achieve a wider understanding of the new
concepts”.
In the startup phase, faced with the concept “liability of newness”, SpotOn had to organise
institutional support, legitimacy and seek to obtain a prestigious business affiliate to build up a
strong link. Through these key contact, they have access to new customers and partners. (Elfring,
Hulsink, 2003). Paticularly, through the support of the incubator, Simon could build brand about
himself and Spoton marketing. He got to present his company to a wider network of
entrepreneurs and academic people. Furthermore, using the popularity of his dentist
friend/customer, since he is a very welknown dentist in DK is also a smart move. Through Peter
and through the video where he talked about how much more he earned using the service of
SpotOn and gave all the rosy words about Spoton, Simon has gained legitimacy for his business.
Besides, all the references of customers on Spotonmarketing website are also a good source that
Simon and his company can get legitimacy from. The type of entrepreneur of SpotOn marketing
Figure 5. Entrepreneurs of SpotOnmarketing‘s network
The cases and analyses
and his use of network will be viasualized in the graph below:
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Entrepreneurial network 2013
4.3 CirCal
What is Circal?
CirCal is a Danish company which owes a calendar application (CirCal App). The company was
founded in 2009 and was based in Ballerup, but now is located at Aalborg University, where has
made an agreement with the University to rent the facility in quite a low rent and also with the
help of students the company gains input for the product.
Customers using CirCal App enable to create private and public events and to share their plans
with the ones they like. CirCal’s applications make it easy to keep, for instance, track of
university schedule, appointments with friends, family and upcoming events in their social
networks. It is like “Future Timeline” and an innovative product in the market. This application is
different than other Apps i.e. Google Calendar, because the customer has the possibility not to
share the full calendar. Normally, customers can see all others calendars as they are shared, but
privately not everyone is willing to share his or her events.
However, the company has not only this App but also got full infrastructure of the calendar. Their
own calendar infrastructure, which is the hard thing to build, has business products. The business
product is a way for businesses and organizations to make people remember their events and they
can do it in two ways. CirCal Partner program or Remember Button enables for companies or
organizations to promote their events both online and on-site. At all times they are able to tap in
specific target audience and monitor the spread of content, in that way, customers always
remember these events. CirCal Partner program allows to maximize companies and organizations
revenues by showing relevant event based ads in website as well. Along companies or
organizations own content, CirCal allows to promote similar content which can generate
revenues.
The entrepreneurs and company’s history.
CirCal was founded by two entrepreneurs Esben Damborg and Vagn Nielsen. They met in
Ericsson where they worked and became good friends. Esben Damborg has Master in Economics
years in a French company named Gemalto. After a failed attempt of Vagn to found a company
Esben and Vagn established CirCal Aps.
Co-founders understand the success, which is getting the company running, making a product,
which actually works and getting somebody interested and customers uses the products. Network
is a very important thing in their business, but the most difficult thing to have the network, to find
The cases and analyses
and experience working in international sales in IBM and Ericsson. He had been working many
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Entrepreneurial network 2013
the “right” person and to find out how to fund the company. Funding was the biggest challenge of
CirCal in the start-up stage.
Co-founders started their business without loans and with their own personal capital. Friends and
family helped in the beginning by funding and pertaining a partial ownership of the company.
The company did not bring any revenue in the first year, because the cost of developing and
maintaining the platform was huge. In the first year the entrepreneurs was working on the
prototype of the App and second year Circal Calendar was operating in a Beta version. The
prototype was tested in the market and the company could get feedback from users and potential
customers on the usability and the price that they could pay.
Later the company received financial support from some “business angels” which are individual
investors which fund high risked start-up ventures. The most significant funding was pertained by
North Zone Ventures, a Danish venture funding which had also funded the famous media
downloading platform, Spotify. North Zone invested 1 million US dollar on Circal. Circal also
received funds from a Danish government through services like Vaeksthuset and Vaekstfunden.
These services provide loans with special terms to highly innovative start-up companies with up
to three million DKK.
CirCal used these investments into building a complete and state of the art infrastructure. After
about one year, co-founders started to mark their products and implemented business model.
They focused on the marketing a lot, because the product was proved and worked in the market.
It did not have the technology risk that whether it does not work. CirCal product is innovative
and different than others and many wanted to use it. Now CirCal profitable customers are
companies and organizations whom the company sells Reminder Bottoms. CirCal main customer
is Scandinavia's leading media company Egmont. Also, Circal previously had an agreement with
a handset company and some corporations with a Telecommunication Company.
In terms of indexes, in the first year of the operation the company had absent revenues. In the
second year they had revenues approximately of 50,000 US dollars while this year they are
Now there are seven employees in CirCal. The company vision is to be a global leader in their
field. Co-founders in the present time are also trying to expand globally and especially in the
USA and the companies of the Silicon Valley.
The cases and analyses
expecting cost flow positive results.
44
Entrepreneurial network 2013
4.3.1 Analysis of CirCal
Type of entrepreneurs
When we visualize the entrepreneurs of Circal then we automatically think of the description that
Casson (2005) gave for him. He has traits of a more optimistic person than others which derives
from special information he has in his possession. We can conclude to that due to the vision that
the entrepreneur have for the company: “we have high demand and we want to go globally”
Furthermore, he is self-confidant and, as we would characterize the economic environment the
past three years, we can say these entrepreneurs act in a volatile environment. This environment
is characterized by a high competition and a declining purchasing power (Index Mundi 2012)
however; in those three years Circal entrepreneurs have proven to be quite risk-aversive rejecting
financial offers something that could jeopardize the life of Circal.
Circal is characterized as an innovative company.The innovative factor comes from the product
itself; however, it is a Kirznerian innovation and not a Schumpeterian one.On the other hand the
emphasis to the opportunity is a high priority for the entrepreneurs. Wherever opportunities are
possible, either that is an international technology conference or a product presentation to a
telecommunication company, their presence is very active. Thereby, we can conclude that Circal
has the characterstis of the Timmons model. His model, which considers opportunity, resources
and the team factor as critical to the entrepreneurial process in the basis which success is defined.
Circal have realized that the combination to these factors is a path to success. Furthermore, Circal
shares the insight that in order for the company to be viable the product must be attractive and
durable timely.
Circal is successful in terms of the three variables of Brüderl and Preisendörfer (1998) about
success.

They have maintained their company for the period of three years, which is part of the
survival parameter of the success, and the future seems promising.

The second parameter is the employment growth. Starting with only the two founders of
Circal now the company have other seven employees and have their own infrastructure

Although, the previous year Circal was in a Beta version* this year the product was
released in the market in its final version. Last year Circal got a venture funding of 1
million US dollars (5.78 million DKK) by the Danish venture funding company called
Northzone and also got special loans by Vaekstfunden and Vaeksthuset. In terms of
The cases and analyses
and platform for the development-supporting of product.
45
Entrepreneurial network 2013
revenues the previous year Circal had 50.000 US dollars (290.000 DKK) while this year
they are expect to be more cost flow positive. Regarding the third parameter of success,
which is the sales growth, Circal have a positive course.
The next step is having a focus in the network activity, network structure and benefits from
network.
Network activity
In this case we have to deal with an already established business network before the existence of
Circal. Our entrepreneurs have a significant professional experience having worked before in
some big companies such as IBM, Ericsson, Gemalto etc. They had a professional network
activity with also helped in the creation of Circal since Esben and Vagn are colleagues from
Ericsson. The already existing business network (weak ties) of both of the entrepreneurs would
also help after Circal were created. This is maybe an interesting outcome because it shows that a
pre-existing network could benefit entrepreneurs that would start up in a similar professional
domain. The network activity in the start-up phase was also consisting of the existing friends and
family (strong ties) which except for the supportive contribution would also take part in the
funding of the company. Network activity was intensive in the startup phase and it is still in the
growing phase because the engagement to expand it is as serious and focused as in the beginning.
In the startup phase the network activity would focus in finding investors for the company while
in the growing phase in finding customers and potential cooperation with other companies to use
their application.
Network structure
The network structure of Circal is also comprised of strong and weak ties. Strong ties are the
family and the friends of the entrepreneurs. As in the Mond case the company is comprised of
two people which had a strong relationship and for both of them this relationship was a strong tie.
The other major subset of the network structure is comprised of weak ties such as employees,
colleagues, investors, ex business partners of the previous jobs (such as Ericsson, IBM, Gemalto),
Aalborg University employees, customers, cooperating companies, competitive companies’
There is diversity in the weak ties of the entrepreneurs. As Esben says it is difficult to move these
“weak ties” relationships to the “strong ties” category. There are some weak ties which are
definitely stronger now, some customers, business associates but they cannot categorize them as
strong ties. There is a difficulty in this case for weak ties to become strong ties. Esben says that
The cases and analyses
employees, ERFA group associates, previous start up network, LinkedIn, acquaintancesetc .
46
Entrepreneurial network 2013
perhaps in a 25 year course of a company such relations limited to the company’s duties may
become strong.
Benefit from network
In order to describe the benefits from the entrepreneurial network we will also assess in this case,
the benefit that network had on discovering opportunities, gaining resources and acquiring
legitimacy for the Circal entrepreneurs.
Opportunities
As we also mentioned, discovering opportunities remains a high priority for the company through
all of the phases of the company. Opportunities have been promoted to Circal by previous
professional network created initially in IBM, Ericsson and Gemalto, which are weak ties, in
terms of gaining access to significant information on the market and the product itself .Circal
entrepreneurs seek opportunities in terms of innovation technologies and also valuable feedback
on potential market openings and new practices in the marketing or production level through
international conferences such as the Leweb Internet Conference in Paris or Gartner Symposium
in Barcelona. In these international conferences Circal is also trying to expand its presence
internationally. In searching for opportunities social Medias are also very good tools, especially
LinkedIn which have a more business profile than others, helped in finding new valuable contacts
for lucrative opportunities for the entrepreneurs. As in Timmons model (2004) the company starts
its operation with a market opportunity. For Circal the market had already given the opportunity
to develop its product and the viability of this opportunity brought the financing and the growing
of the company.
Resources
In terms of financial resources, in Circal the first to contribute were strong ties, friend and family
which except for the emotional contribution they also contributed financially to the company in
the startup phase. Financial resources were acquired firstly by business angels (informal investors
ownership equity-Entrepreneur, 2013) and then by venture funding companies such as the Danish
Northzone where Circal earned a funding of one million US dollars. Financial resources have
been acquired also by Danish public service as the Vaeksthuset or the Vaekstfunden which fund
innovative startups with up to three million DKK. For Circal it was important they pertain a
levelof “asset parsimony” (Hambrick and Macmillan, 1984, cited by Elfring and Hulsink) which
The cases and analyses
which provide capital resources for a startup in exchange of a usually convertible debt or
47
Entrepreneurial network 2013
is strategy to maintain the survivalof the company in th beginning by ensuring the minimum cost
of the resources. They have already made an agreement with Aalborg University of Copenhagen
in renting the facilities in a quite low renting and also taking feedback from students about their
project.“Bootstrapping” (Timmons, 200) strategies have been identified in this case while the
entrepreneur is requiring to have the lowest minimum cost with the method of “minimize and
control”. In finding key customers and distribution channels ,the already existed network before
the launching of Circal, plays a major role through the contacts acquired there. Last, but not least,
we should not forget the partnership with Aalborg University of Copenhagen which with the
access to a prestigious academic community provides Circal with production know-hows
information and feedback from new practices in the market, new technologies developed etc.
Legitimacy
Gaining legitimacy for a new IT software-development company must be very important since
there is a big competition and a small company should stand by a big one to survive. Nokia in
this case and the opportunity that they gave to Circal entrepreneurs to present their product under
their official attend in the IT Conference in Spain. Legitimacy is acquired also through Aalborg
University which is a prestigious educational institution and have made an agreement with Circal
in providing students inputs of their product. The type of entrepreneur of Circal and his use of
Figure 6. Entrepreneurs of Circal‘s network
The cases and analyses
network will be viasualized in the graph below:
48
Entrepreneurial network 2013
5
Discussion
The findings of this project show that the entrepreneur cannot be defined out of the network
context and that the network dimension is inseparable from him. As Aldrich and Zimmer (1984)
argued, network plays a crucial role in the entrepreneurial process.
As stated in Hoang and Antoncic (2003), also in the three cases analyzed in our project, network
activities were intensive from the startup and during the growing phase. However, in our cases,
network activities changed direction and ties timely. Due to access of knowledge the network
activities have become more selective as the venture grows.
The network structure of the three companies was formed from both weak and strong ties but
mainly weak ties. Strong ties were consisting of family and close friends while weak ties were
consisting of investors, employees, customers, ex-colleagues, business partners etc. According to
the three factors which measure success, of Brüderl and Preisendörfer (1996), the three
companies have been considered successful because they fulfill the three characteristics which
are survival, growth of sales and increase of employment.
In terms of securing resources, in the early stages of the venture as pointed from Brüderl and
Preisendörfer (1998) and then later Elfring and Hulsink (2003) , friends and family (strong ties)
assisted the new entrepreneurs with the financial resources required in the beginning. Strong ties
have bigger motivation in assisting with financial resources (Elfring and Hulsink, 2003).
However in our cases, while Mond of Copenhagen and Circal, friends and family supported them
in the startup phase of their business, SpotOn marketing mainly used weak ties who are business
associates to get access to different resources. In terms of investment partners, key customers,
distribution channels and production know-how, both weak ties and strong ties could contribute
and support.
Entrepreneurs’ networks are important at opportunity recognition. Hence, entrepreneurs with
extended network tend to identify more opportunities than solo entrepreneurs. According to our
entrepreneurs, an important finding is that a pre-existing social network, had served as a solid
basis on providing them access to knowledge and information on discovering more opportunities
for the existing venture, especially helpful in the start-up phase. Granovetter (1973) stated that
weak ties serve as “bridges” to specialized information, something which strong ties do not tend
project, in the growing phase of the venture transformed actual strong ties (which were initially
weak). In the two first cases there were specific weak ties that transformed to strong ties.
Discussion
to. However, Granovetter does not explain their possible transformation to strong ties. In our
49
Entrepreneurial network 2013
Particularly, Jacob from BNI in the case of Mond of Copenhagen, and the Incubator of the Niels
Brock College and the dentist client in the case of SpotOn Marketing. All of those ties played a
major role in introducing to key customers and opportunity channels for both of the
entrepreneurs. For Circal it was different. There were potential for weak ties to transform to
strong ties, whether this was due to a partnership, due to customer-entrepreneur relations,
however these relations remained somewhere between the strong and weak ties. These neither
strong nor weak ties remained somewhere in the middle and perhaps a considerable amount of
time is needed for them to transform. In the case of Circal, the fact that the end users do not really
get to know the entrepreneurs or due to products’ characteristics that do not give the entrepreneur
the opportunity to have a direct relation with the customer may be a factor that influence the
above results.
Another factor we should take into consideration is that the three entrepreneurs are not operating
in the same sector and that can affect the above conclusion, but it can differentiate our findings
from the existing literature. The different sectors can be different in terms of products and
services, entrepreneur-customer relation, different distribution channels, market practices, need
for resources or first material, prices in the market, suppliers, marketing, production know-how
and so many other characteristics which can influence the way entrepreneurs use their network
and the benefits they get. Therefore different sectors mean different needs for resources,
opportunities and legitimacy. For example, there is a gap between the financial resources of
SpotOn and CirCal. In Circal, which is a high technology company ,the development of its
product was more expensive comparing to the service of Spoton. Their need for resources was
not the same. Hence, Circal cannot self resource or grow organically like SpotOn and Mond but
needed to look out for more investment partners.
Different types of entrepreneurs may also be a factor that influences our above findings. We
have spotted more than one characteristics of the entrepreneurial theories for each of the
entrepreneurs. This means that each of the entrepreneurs have merged different insights of some
of the entrepreneurial literature we chose in the theory section. The only common factor they
share it is the Kirznerian type of innovation(Incremental Innovation. It was our goal initially to
also search and seek a bridge between the type of entrepereneur and the description of his
network and his utility. However our findings shows no connection or a relation with the type of
network no matter what type of entrepreneurs they are and how they used network. This could be
due to the and small number of cases of entrepreneurs that we have researched.
Discussion
the entrepereneur and the way they use networks or benefit from it, they all get benefit from
50
Entrepreneurial network 2013
Another interesting finding of our project is that Social Media is seen as weak tie and the
potentials they give in extending the network and also in finding customers for the entrepreneurs
is huge. Due to the time that people spend nowadays on Social Media, they allow firms to involve
to a direct end-consumer contact at lower cost and higher efficiency then the traditional
communication tools do. The potentials that derive from using Social Media by entrepreneur are
far from negligible (Kaplan, Haenlein, 2010). Especially in Mond of Copenhagen the use of
Facebook has brought many clients to their workshop. SpotOn used YouTube in order to
advertise-promote his company(as a marketing tool) and Twitter to inform the followers of the
company on the upcoming events (as a communication tool).The use of Social Media in the case
of CirCal is restricted in maintaining the existing business network, that they have already
acquired from past collaborations or pre-existing entrepreneurial network through LinkedIn.
According to the legitimacy benefit of the network, in our cases this is ensured by gaining
support form prestigious business affiliates such as famous people and references from customers
(FCN in Mond of Copenhagen), big market players (Nokia for CirCal) or popular dentist
customer as well as all the references on the website of SpotOn. To approach those organizations
both strong (weak that grew strong) and weak ties have contributed.
In this project we chose to “measure” the efficacy of entrepreneurial network through resources,
opportunity and legitimacy. If we were to implement this project in another way we would
choose different theories that have different perspectives on entrepreneurs and networks and
would probably have another conclusion. For example, we would identify the major roles of
network through five factors as they were selected from Amit, Glosten, Muller (1993),
including:
(1) facilitating the transformation of an idea into a realistic plan,
(2) increasing aspirations,
(3) stimulating ideas,
(4) providing practical help and,
(5) giving support.
Perhaps, this model can give a holistic perspective in the contribution of networks to the
entrepereneurial process. However, we can suggest this path for future researchers which would
Discussion
like to investigate further in the network perspective of entrepreneurship.
51
Entrepreneurial network 2013
Mond of
Copenhagen
Spoton Marketing
Circal
Type of
entrepreneur
Casson, Kirznner
Network activity
Higher in the start-up
Higher in the start
with a big density
High during the all phases
Network structure
WeakStrong ties
WeakStrong ties
Weak ≠ Strong ties
Timmons,Kirznner Casson,Timmons,Kirznner
Network benefits
Access and
knowledge,
discovering
lucrative,opp.
through weak ties
Opportunity
Financial resources
and support from
strong ties.
Resources
Legitimacy
Access and
knowledge and
ways to serve
market, deal with
customers through
weak ties
Services for innovation,
potential market oppenings,
new practices for the
market, lucrative opp
through weak ties.
Financial resources and
support through strong ties,
Financial and
human resources
from weak ties
Key customers and
distribution channels
through weak ties
and strong ties
key customers
through weak ties
Socio-political
legitimacy through
weak ties
Socio-political and
cognitive legitimacy
from weak ties
Investment partners through
weak ties,
Key customers and
distribution channels,
production know-how
through weak ties.
Socio-political legitimacy
through weak ties
Figure 7. 0verview of entrepreneurs and the use of networks
6
Conclusion
John Donne said „no man is an island entire of itself; every man is a piece of the continent, a part
of the main“. It is also true with a „man“ that starts and runs and business. Starting up and
running a business successfully requires the entrepreneurs to use network effectively.
In this project we use different definitions and theories to define entrepreneurs. In a business
and valuable combinations of resources in an uncertain and ambiguous environment (Amit,
Glosten, Muller, 1993: 816). Allen (2009) argues that entrepreneurship is “a mindset or way of
Conclusion
setting, entrepreneurship can be defined as the process of extracting profits from new, unique,
52
Entrepreneurial network 2013
thinking that is opportunity-focused, innovative, and growth-oriented”. It can be found within
large organizations, in socially responsible non-profit organizations or anywhere that individuals
and teams desire to differentiate themselves from the crowd and apply their passion and drive to
executing a business opportunity. Low and MacMillan (as cited in Amit, Glosten, Muller, 1993:
816) defined entrepreneurship as „the creation of new enterprise“. Amit, Glosten, Muller (1993)
defines entrepreneurs as individuals who innovate, identify and create business opportunities,
assemble and coordinate new combinations of resources, so as to extract the most profits from
their innovations in an uncertain environment. Bygrave’s (2003) definition about entrepreneur as“
someone who perceives an opportunity and creates an organization to pursue it. The
entrepreneurial process involves all the functions, activities, and actions associated with
perceiving opportunities and creating organizations to pursue them”. The entrepreneur theories
we use in this project from Casson, Kirzner, Schumpeter and Timmons all have different
interesting perspectives about entrepreneurs that we want to use to analyze our cases.
On the other hand, we define network as the strong, weak ties that help entrepreneurs obtain
resources, opportunities and legitimacy. Strong ties are built on a history of past dealings and in
these relationships a degree of trust can play a role (Aldrich & Zimmer, 1986). Weak ties refer to
a diverse group of persons with whom one has some business connection. Strong ties are
associated with close friends, while weak ties can be connected to acquaintances (Granovetter,
1973). Weak ties tend to be formed by people who work in different contexts, and therefore these
people may have access to different sources of information, resources and opportunities. Weak
ties are considered to lead to a more varied set of information and resources than the strong ties
can (Bloodgood et al., 1995) and consequently weak ties enhance the ability of entrepreneurs
tospot opportunities. Weak ties may raise the alertness of entrepreneurs and therefore the network
of weak ties of an entrepreneur may set into motion a chain of events, started by spotting of an
opportunity and leading to a new business start-up (Elfring, Hulsen, 2001).
From the theories, particularly from Aldrich and Zimmer (1986) and from the practical results of
our research with the three cases, we conclude that „the entrepreneur is incorporated in a social
network and this social network plays a crucial role in the entrepreneurial process“. Network is
critically important, especially in the startup process since at the startup, the entrepreneur usually
has limitted network. So for an entrepreneur to start up a business, network usually brings
deploy resources, discover opportunities and gain legitimacy for the business. The network needs
not necessarily be from strong ties such as friends and family, but any and all network will help,
especially the network from acquaintances, when some one knows some one that has connection
Conclusion
tremendous benefits. The biggest benefit, among other things, is to get access, mobilize and
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Entrepreneurial network 2013
to the needed resources and information and so on is actually an important contribution to the
business.
Based on our findings, we can see that different entrepreneurs donot benefit from network in
different way. There is no relations from the type of entrepreneurs and the benefits he gets from
network, no matter what type of entrepreneurs they are. Even though the entrepreneurs might
have different traits, and their use of network might be different; some use mainly strong ties,
some use mainly weak ties, the other might use the combination of both ties. In our three cases,
Mond of Copenhagen entrepreneur has the traits of Casson and Kirzner and he used the
combination of strong and weak ties; SpotOn marketing entrepreneur has the trait of Timmons
and Kirzner and he used mainly weak ties; Circal entrepreneur has the trait of Casson, Timmons
and Kirzner and he used both weak and strong ties; the use of network has given them
tremendous benefits for their business and taken a big role in their success as being entrepreneurs.
Our theories do not talk about the future of network or how the network will grow in the future.
We do not know about the future of these entrepreneurs and their companies either. So the
research on these entrepreneurs and companies only reflect their use of network to be sucessful at
the moment. Furthermore, we cannot mention success without mentioning our interpretivism
philosophy of science, where we subjectively measure the level of success and interpret the level
of weak and strong of their network ties they use to become successful. Nevertheless, the three
cases of our research acted as exemplary cases of successful entrepreneurs, whose positive results
Conclusion
induce us and entrepreneurs-to-be to learn from.
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Entrepreneurial network 2013
7
Acknowledgement
The final outcome of this project required practical information about entrepreneurs’ activities,
assistance and guidance from several people and we are grateful for their contribution along the
completion of our project work.
We would like to express our gratitude to the entrepreneurs: Michael Birch Jacobsen from “Mond
of Copenhagen”, Simon Salomonsson from “SpotOn marketing” and Esben Damborg from
“CirCal” for their valuable time they spent with us in the interviews. The information about their
companies, how they used networks throughout the life cycle of their ventures from the first year
of operation has helped us make fruitful analyses and conclusions.
Special thanks are given to Flemming Sørensen, our supervisor, for his professional guidance,
Acknowledgement
valuable support and his useful and constructive recommendations on this project.
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Entrepreneurial network 2013
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Nayab, N. (2013). Understanding the Timmons Model of Entrepreneurship. Available at:
http://www.brighthub.com/office/entrepreneurs/articles/73336.aspx (Accessed 18 May 2013)
OECD - Eurostat Entrepreneurship Indicators Programme. Measuring entrepreneurship. A
collection of indicators 2009 Edition. Available at: http://www.oecd.org/industry/businessstats/44068449.pdf (Accessed 20 April 2013)
Shaffer, M. J. (2011). Entrepreneurial innovation: patent rank and marketing science.
Dissertation,
Washington
State
University.
Available
at:
https://research.wsulibs.wsu.edu/xmlui/bitstream/handle/2376/2902/Shaffer_wsu_0251E_10146.
pdf?sequence=1 (Accessed 20 May 2013)
Sobel, R. S. (2008). Entrepreneurship. The Concise Encyclopedia of Economics.Library of
Economics and Liberty. Available at: http://www.econlib.org/library/Enc/Entrepreneurship.html
(Accessed 18 May 2013)
Business dictionary. http://www.businessdictionary.com/definition/success.html
Oxford dictionary. http://oxforddictionaries.com/definition/english/success
CirCal. http://www.circal.com/
Mond of Copenhagen. http://www.mond.dk/
References
SpotOn marketing. http://spotonmarketing.dk/
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9
Appendix
Appendix 1 - Interview guide
Hello, we are Master degree students in Economics and Business Administration at Roskilde
University. As mentioned, we are writing our semester project about how entrepreneurs use
network to become successful. We know that you are a very successful entrepreneur in Denmark
we are very inspired by you. Thank you for accepting to have this interview with us. Would you
mind if we record this conversation for a better transcription?
The company
1. Please tell us a bit about yourself
2. Please tell us about your company? How many employees? Financial results?
3. How did you start your company? The history? The milestones?
-----------------------------------The network
4. How much benefit do you think network has on your business?
5. Who were the people that helped you start the company? (Your family, friends or what
relations?) Please quickly sketch a network graph onto a paper.
6. How did your network influence your start up? Which one of the network/relations is
more important? Which ones are strong relations? Which ones are weak?
7. How did you find/create your network? (other than the people you mentioned)
8. How can you trust the people in your network? Have you experienced any mistrust? Any
lessons?
9. How do you maintain your network? How often do you contact them?
--------------------------------10. Were there any challenges that you faced in the start-up phase? Are there any challenges
now? What are they?
11. How have you overcome those challenges?
12. What are the key success factors of your business?
13. Do you have any advice about how new entrepreneurs should create and make use of their
network?
Thank you very much for your time!
Appendix 2 – Transcription for Mond of Copenhagen (interviews of SpotOn and Circal is in the
attached CD)
…Michael… 27 years old… my brother and I… my brother Martin is 24… we started business 2
years ago. About myself I can say… I have been student from , actually from Niels Brock…
innovation… and innovation line there 2 years and then went to Roskilde university… where
actually I did… take bachelor in Economics… and then I started in CBS for my candidate
master, but when two three classes that I cannot… I was too busy doing this. If you wanna do this
Appendix
1. Please tell us a bit about yourself.
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it is kind of… why yea… so…and i… about myself… I don’t know what else… there is no… I
am kind of in charged of financial or sales part. Martin is doing development, all the back and…
2. Please tell us about your company? About like how many employees? Two of you or
any other employees?
M: Actually we did have one employee. Actually just left three months ago… which was due to
him wanted to take his Masters, not because we didn’t want him… we are right now quite
happy… he was in charge of most of the marketing and also he was helping us a lot… we have
this sponsorship with Northsjællands… which turn out quite well… also because they went to
Champions league and everything… quite nice… he was doing like that... and we had… what it
called… internship. We had one for half year. She wanted to stay for three months but decided to
stay for … she liked here, I hope she liked here so she stayed for six months. It is quite nice and
she is... she been for us long time… she was also doing research regarding… women’s clothing
and based on her work we can starte a project with KEA, Købehavn Erhvervsakademy… where
they have some design students… they were doing projects, main projects about our company,
and about making suits for women from our company…
3. A bit about your product, how do you make them?
M: e make them… what we do… I will tell you what we do… we get custumers come to us…
then they select. We have some stands… kind of… how we make suit and they come to us, they
choose fabrics, details, design details, what kind of style they want in… and all these choices opt
to the customers but they are in our kind of frame. We have frame and say: “you can choose of
this”, and then chosen kind of… frame/decisions… they have suit, they go into our 3D body
scanner, which is quite unique… we going to that we send… we extract the measurements of
scanner, sent the 3D profile picture of the customer along with the measurements and his
decisions for suits… send that to our production facility in India, where we have been quite few
times… and we have last half year… would been working set up together, because no body
works with the scanner except of us… it is quite new and half year to set up this… but then they
start producing the fabric… the suit… and then they send back to us.
W: Does it take so long, from India and back?
M: no, actually it doesn’t, but right now we say it takes 6-8 weeks and the reason we say also we
make sure that we don’t exceed… we have experience in the past, troubles… with delivery
time… because production… shortage… so many problems…and could be customs… sometimes
can be late… maybe up to a week, just because has been clear, so…
M: we have… that is what we have taken for here, in the local tailor, right in the corner… and
there are small issues what called customers satisfaction guarantee. We make sure that customer
comes in… that’s why also… when we have suits home… we have to call up the customers,
email… “Your suit is ready. Can youcome us and try on, instead of sending the product for the
customers. That way we make sure that every time suits leaves our house, that we make sure that
they actually looking good.
Appendix
W: but how can you control your production if they make it nicely or if there are something
customers don’t like and how do you fix them?
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W: Is there anybody in India, who controls the process or just you?
M: Yes, we have the person who controls the process
W: ok, so two of you are here and one in India
M: yeah
W: so ok this business has three partners or… it is actually outsourcing
M: yeah we outsource the production. We don’t have the production and we don’t want the
production, that is not our business. We are marketing and we know how to sell to Danish
customers, maybe to European customers. That is where our expertise is. We want to built shops,
make sure that we get in, we have concept and we know it. But in the long term we want just
outsource the production for who might be the best. We discovered that it isn’t just chosen the
cheapest because that is… nothing to do it… especially when you making suits and we need to be
the best, that’s why we’ve been searching…
W: you said that you have the fabrics yourself here, you collect them, you choose your fabrics
send them to India?
M: that is a good question. Actually, we have here small sizes, so the customers say “I want this
fabric…. We have exact number, fabric we have in India, so they have stocked the fabrics
W: do you design the suit or you only have those frames, maybe three four five frames… but if
they want something different?
M: we can’t do it
W: how much frames are there in total?
M: there are a lot… you can choose onebottom suit, two bottom suits, three bottom suits…
vents…you can choose two vents, one vents, zero vents ….. you can choose own inner lining
whatever you want…so I mean, the possibilities are actually endless, but you if kind of put down
to saying we have one slim fit… we have one regular fit… they cover the entire range… because
every suit is actually still made from scratch for specific person, so we take the measurements…
we have kind of style… this is our mark. The on in blue as you see… this is actually one of
original jackets, that is how it looks, that’s at least customers know this kind… I mean of course
you can get if you are a big person it won’t look like that… it will be adjusted for him. Just
saying that’s how because need standard styles… this is here you go… so and that’s how it works
4. Financial results of your company? Profit?
M: I’m not going to talk about our financials... I am saying we made… last year I think we went
into 0, which is quite good, when you look at… we invest really a lot of money in… scanners...
M: Yeah. We also built in organic way, we put in money first of course, we have invested a lot of
in this project, but we building organically. I mean we don’t go out borrow a lot of money. We
want expand while we’re making money. If we don’t make money, then we should not be
Appendix
W: for the first year I think it is quite good. You exceeded your costs.
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expanding and that make sense. So that’s how we kinda built the business and right now we are
going like this, also we are quite surprised by how much we are actually and able to sell from this
location, you see it is in the back yard
W: Do you have some rough number you want to share?
M: not really, I mean... don’t really like to share the financials, also because of competition…. I
can say that we made roughly around… the turnover 800 000 kr for the first year, which is not a
lot, but we kinda breakeven we just cover the costs … just went zero which is fine. This year
we’re expecting 1 800 000 maybe 2 000 000kr in turnover, so far it looks promising
W: about you location?
M: right now we have this location and we are in the back of… it doesn’t seem like you are
selling suits here… I obviously understand…we still manage to have quite… people know about
us, they talk about us, they come here they find us on the internet and we are quite surprise by
how much people actually show up here… I mean we are in the back. We are not even doing a lot
of things to promote us… you can’t see a sign of Mond of Copenhagen… and still we managed
to do it quite well. What is happening now, we are building a shop… we are thinking about… we
are planning of opening late May this year and this month. When we open it, then we will have…
if we can just keep the same level of turnover we can go still, go break even. But we believe that
with the shop it is on one of the most traffical… busiest… roads in Denmark actually. So we
believe that the marketing and the awareness fromthat sign will generate, maybe not two times
maybe four times, maybe even more. So we believe it will be quite well. That is our belief that
we will do well.
M: I think we need to talk little bit how we changed the view of which ways we are gonna go.
When we started this business, actually we started with three people, with another guy. Now just
my brother and I. We started the business with the view of going out so big businesses and
selling… directly at the business, we come out and take the measurements by hand in the
business… we’ve been out to some of the biggest in Denmark, but we kinda changed that
because the service level we provide was not enough… ‘cause if you go out there you have to
take measurements and then you still have to get customers back here for thetry on. We kinda say
well, what is the advantage of you come to us when we don’t save the time we still have to come
to you anyway. So if they start up coming here then we’re aware they to need to come back and
try on. It is better for the process and benefit for customer service. So we kinda changed that, it is
kind of a small revolution in this business for us that we decided we bought this scanner… which
is quite a huge expense… and we bought the scanner and we said all right we’re going to open up
shop instead of this… so we kinda quit our main income source, which was we could go out to
some company and sell for 50 000 just one day and suddenly we decided we will not going to do
that anymore. And we’re going to say… customers come to us, which is quite big for a small
company to make this kind of change. We have recommendations because of the service level,
and what we can help the customers. The customers feel better.
W: who recommended you the scanner?
Appendix
5. Just briefly, how did you start this company? The history? The milestones? From
the first customer to…
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M: we did. We have been reading a lot about it, both my brother and I. I decided to say, I want to
see this scanner in action, we went to the 1st body scanner conference in Switzerland. Actually it
was the first in the Europe and second in the world. At that time the scanners were expensive and
they were not good enough. But we went there anyway and we talked about it, we met all people
produced the scanner and kind of discovered in one year from now then scanner would be ready
so we kinda say all right we will wait and then suddenly they… I think I found something I was
falling on the internet… and then they said the scanner was ready with a cheaper technology
because this is way cheaper, the first one costs half million. It is not near that. So and we said all
right we’re gonna to Finland see it in action then we say…. All right this is what we’re gonna
do….we bought it home and for half year we’ve been testing it.
W: what do you think is it the different thing that you offer in this kind of industry? Your strong
part?
M: Yes. You can go out and buy Hugo Boss suit for 4000-5000 kr. This is a suit that is off the
rack. I mean it doesn’t look like anybody else. Here you come in to us and choose everything
yourself. You can choose the fabric, decisions. You can be the designer. You can make a designer
and go to the customer, if you want this we can make it for you and also the fit is better. You can
get better fit suits from outside. And we make for a better price. The only reason why people
shouldn’t choose us is if they have a rush and they need it tomorrow, we cannot deliver fast, it
takes 6-8 weeks. But we are working on that every day.
W: if you do in Vietnam they will do it a lot faster
M: No
W: of course they can
M: yes but I mean they could say it do faster because they probably…. We know aboutVietnam
we have discovered place make faster but also depends from the quality again. The producer we
work knows the production facility we work. They are… we are shock that… their computers are
newer than ours.
W: India is known about a lot about IT technologies.
M: all machines maybe work maximum 2 years old and it is quite different from the other shops
we have been… there are 5-10 years old machines. These machines are just new. So much better
quality, of course is better.
M: it is males obviously, from 30-60. What we discovering now is actually there are a lot of the
20’s come to us, young rich customers. We are still trying to discover our target group that
sensethat we make the switch because before we were actually only focusing on businesses that is
then you say male from 30-60 in white color job. Maybe we will make a little bit change in target
group, but still this is the main target group and still we are working on this. And it still this make
the main income from but we see… we are flexible…everyone can come in, we can make for
children so no problem, also we make for Christening, for new year’s we make smokings…
Appendix
W: who is your target group?
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W: do you focus on market in Denmark?
M: yes, in the future we will build shops all around the world, but as now we started with one
shop. That is a vision. We start slow and pick up paces we go. We want to build concept first and
then we kinda…
-----------------------------------The network
6. How much benefit do you think network has on your business?
M: a lot… again it is… when we look to the history of the company when we talked about where
we were before we used to sell to businesses then network meant everything. It was basically our
entire business was based on network. We had sponsorship with FCN where we had a huge
partnership there. And we were allowed to talk to some of the most influential people in Danish
businesses. We were sitting in the meetings with … owners of all the big businesses and then we
kind of make agreements with them “can we come there, can we come there, can we come there”,
so in the start our network was everything. I mean we didn’t have anything, but we kinda found
network and we kinda make friends with people and kinda expanded our network that way… and
still they keep asking about us up there why are they not here and so and so but we simply don’t
have the time for it.
W: how did you through university or through friendship approach this network? How did
you get to know these people?
M: actually we went to quite a lot of different networks in the start. We went to some called BNI,
Business network international or something like this, which is morning meeting every week, it is
quite hard, very sales oriented. And then we were for few times, it was quite nice… it was kind of
some of them knew a guy from FCN. It was all right let’s talk with him, we didn’t know at the
time what … and we kinda make the sponsorship deal and then our network expanded from there.
So it’s kinda like if you know someone and then they introduce you to someone and then we
kinda get into their network. So what I’m saying is network was everything for us in the start.
W: who are the people who helped to connect with FCN?
M: it was a guy called Jacob
W: is he your friend?
M: he is now. But I mean he is from business association. We started the network ourself. We
decided we want to be in the business network, we decided to go to a business network meeting,
we kind of make friends with them there and then they introduced us, Jacob is in the network
there and he introduced us to other networks.
M: I mean of course some Facebook… we talk to them there. I wouldn’t say our customers are
network based, some see us on Facebook or the social media or whatever. I wouldn’t say that’s…
Appendix
W: so the customers that you have, how did they know about you? How did you network
with them?
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well a kind of maybe they influence about if they are friends onFacebook and know someone…
then they kind of get drawn into it or I want to use there. That is one way using network but I
wouldn’t say that…
W: but social media they are now very popular for networking
M: yeah, we also use LinkedIn, a lot… I wouldn’t say… yes of course a lot of customers come
from there
W: maybe the people who are in your network, they recommend you, recommend customers to
come to you
M: yes how it works… Yeah it also …. Exactly… we get… we talked with the boss from a big
company. He said alright come our company… but if the boss says this is a good idea for you
then we get huge sales…. If we talk with the girl in counter and she says all right come to us. And
she says to the people she knows in the company, this is good deal, then we get small sales. So
the network has to be up high. And we try to talk success volume…
W: are yourcustomers B2B or B2C?
M: now is B2C… but before… that was also the reason why we kinda stop the way we did
before. Because before we had the first selling to the business say “all right can we please come
to your place we give you good discounts” and then the business say “sure you can come in, but
then you have to decide who you’re gonna sell to, you have to sell to them on the day but if they
don’t buy then it’s not our problem… you need to make two sales first to the business and then to
the employees at the business. That’s hard. So actually don’t know if it is good business or not
because you can come in and spend entire day and make no sales. And you can come in and you
can spend entire day and make a lot of sales, so it is very up and down. And that’s why we say
before... it would be kind of B2B and then again B2C because we still sell it to the employees in
the business.
W: are there anyother any people… when you start-up this business, were there any people
from your friends, or family, or relatives…?
M: yeah, of course in the start it was only our friends and relatives. And they bought of course
suits, shirts and everything from us
W: and then they do Word of Mouth and they helped you to…?
M: that is kind of how they helped us, they bought our suits and…
W: but what about the funding of the company? For example the money that you invest here…
usually when young people open business they take money from family, bank
M: we didn’t do that. We spend our money in the project
Appendix
W: did your family also helped?
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M: our family helped a lot… they basically helped us with everything. Right now…Sometimes
our dad is still doing stuff in the shop. Cause he’s saying we are quite smart, we gave him the
key… he kind of felt this is his shop … it is a good deal, they helped us a lot of course…
W: so network that influence your business. Is it important… is it family part is more
important or the one who helped you for example Jacob. Which relation is more
important?
M: That’s the tough one. I wouldn’t…That’s why you have friends and you have family. I don’t
know which one is more important. If you say in support and everything of course friends and
family are the most important… that would always be the case. But in terms of turnover, business
partners and friends that way, were more important
W: but what about start-up face? Who were more helpful? Family and friends?
M: of course family and friends because we didn’t have the network from businesses so that’s
something we developed overtime but when you start you don’t have any businesses associates
or we didn’t know any big bosses or anything… so of course very, very beginning… there the
friends and family were most important
W: so the ones from other relations than family, have any of them become very close to
you?
M: let me just… we are talking…we have family and we have friends and we have business
associates. I would say of course family is important in the start but we are two people from the
same family. Our family is very small. So I mean the family is most important in first two days.
Then our friends were kinda the important ones because they bought more than our family
because our family is very small. We are two brothers in business so we can support each other.
W: how do you know this guy Jacob?
M: from the business. We met in business association. We decided to go there and we helped him
with something and he helped us with something…
W: and now he becomes stronger relation?
M: yeah he drops by once in a while. Also we have few friends we call friends of the house:
Jacob, Thomas, these guys… they talk to us, talk to people they know about us because they’re
like us… and vice versa
M: and what you should also know this is actually very much a net, because when he might
started business associate but then he becomes friend. When you’re a friend of us then we say
family, because wecome from a small family so everything is quite family to us… so I don’t
see… we kinda see as… once they’re friends and they showed that we can trust them. We have
experience people from another side, we don’t like, because something about them… we don’t
Appendix
W: so if you have to sketch the network graph from the start up and how would you do it? This is
you… Michael… from the startup...The first would be family… friends…and maybe from…
business associates, then maybe this would be … Jacob… and maybe this… is like a net…
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like… then they are not in this group and of course they will be in business associate, we have
one of those. We have to deal with him but he will never become a friend. So he is stay out here
and maybe even here, but what I mean, just make sure… business associates if they do well I
would say… then just keep business associate then I can go to be friends in doing well. We kind
of connect.And business all about trust…if we trust them in business I mean no reason we can’t
be friends with them
W: Have you experienced any mistrust?
M: yeah… well we have experienced…in the start. We were other people in the
businessinvolved. That was mistrust, based on the amount of output … we were three partners
and one didn’t do anything so now we are just two
W: … giving is not the same, so you felt like someone working too much and someone…
M: yes, exactly. So it is kind of create mistrust and he is not our friend anymore. Even though, we
tried to be… going that way. Just it is sometimes…
W: how often do you use Facebook and LinkedIn for your business?
M: I mean, we kinda use as promotion tool. I am very aware about what I put out of my Facebook
and also our MOND of Copenhagen Facebook. We are very professional about it. We don’t want
to put anything… kind of damage the reputation or everything… that is kind of decision. We are
professional about this. Same with the LinkedIn… we don’t use as much, because it is also
resource question about time… we would like to use more it because LinkedIn is quite nice…
and when searching for someone, I need to help me in some project, then of course we use. And
also we have someone we spar with… we have business partners we spar with and we have the
meeting with them and talk about our concept, business strategy. They can also have their
network and then… for instance, they have introduced to very interesting people from
university….Danske Institute and Alexander Institute. These kinds of networks can end up
making a lot of money for us
W: so from, through the LinkedIn?
M: yes, that is actually from LinkedIn, so I mean it just… LinkedIn is something we use as well
but it is not something we are very good at using and we would like spend more time but it is…
W: a lot of resources
M: because we are doing a new strategy. We don’t have to go out to customers and say oh you
need to buy suit, you need to buy suit… now they come to us.
W: it is like pulling and pushing
W: and pushing is sometimes annoying as well
Appendix
M: yes exactly. We changed from pushing to pulling and we don’t need to go out, of course you
need to go out, but you have to make sure marketing is different and you draw people in.
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M: it can be. So we try to pull people in. and it also the part of the change we made. Before you
are pushing where you “can we come in here can we come in here?”. Now we do it in another
way… please come in here”.
7. How do you maintain your network?
M: just talking… be in contact… and trying to be… trying to put time for friends. Friends and
family are involved… and try to involve them actually. We have friends coming and say can you
help us this and this… and I actually also wait just keeping in contact with them. That is friend a
out of it. Business associate… we just… we sometimes we talk in LinkedIn…but I mean, we are
not the best at doing it…because I mean basically your time issue… and also because before a lot
of our contact that’s why is interesting the concept is changed from being push to pull then
before we had to contact with all people. Now we kind of we don’t have to but is nice and still
keep the connection and talk to them in Facebook and everything
W: it is like automatic now because you know them, you trust them and they trust you so
M: and they are quite good talking to us, but we should do more to keep them, involve them.
Right now we are so busy that might be some of the thing we tone down a little bit
W: so because your time limit you don’t contact them often … or… you don’t hang out for
example… friends and family you do it often. But the ones like businessyou don’t do it us much.
M: no I wouldn’t say that.
--------------------------------8. What are the challenges in your start-up phase?
M: there are so many…
W: the biggest ones?
M: the product was biggest one, because we didn’t know what we are doing. Actually, the good
thing is start up: We didn’t know, we didn’t know. Actually it is huge advantage. Good thing is
now that we don’t know what we know, it is a big difference. Because then we are more curious,
we are more…
M: this is learning curve, I read somewhere… you start-up not knowing what you do and not
knowing that you don’t know. Then you start knowing, but you don’t know and you start learn to
know. And then you come master and it is the process doing and right now we are in the process
of learning and learning and we have learnt so much because we just going to jumping to this.
And it is maybe the biggest advice for new entrepreneurs is just do it. Because you just be aware,
that you don’t know anything and start learning because that is really what you really need to do,
because you cannot just jump in business with no experience… we have never done suit before.
We wear one. Martin knows a lot about suits and I have been wearing in suits for sometimes…
and of course we have family history where a lot of people sewing, that is kind of whole family
Appendix
W: that is a great thing being entrepreneur, you experience new thing. First you don’t know
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has been doing that, but that’s it, and it is not enough for design we want make new suits and
everything. That is the one biggest issue, I think it was in the start.
W: but you didn’t know a lot of stuff in the beginning and you didn’t experience any failure. That
was quite successful… big lessons?
M: we learnt the products, didn’t come on time sometimes, we learnt… then they say something,
just I mean communication with India is tough. I am reading the book right now, which is about
India communication, just to understand it better. The problem that you are sitting and saying “do
you understand this, they nod” it is so tough and they never say no to be polite. They don’t want
to lose face, which is so important over there. It just… we can think that it is stupid, but it is not,
just different culture. That is the thing we are learning a lot about it. We remember ask again, ask
more questions and make sure that they write down contract, commit with these all details
W: how do you get the contact with those Indian people?
M: we just… talked to the Danish Trade Office in India and then they did research for us, found
ten different suitable production facilities…
W: how did you choose India instead of other countries?
M: we actually started in Thailand, but we decided to go to India, because… First of all, because
for us is the cheaper, but second all… because every time we went to Thailand, there was an
Indian sitting behind the desk and doing all the works, so kind of like…uhm so we decided to go
to India, make business. We thought about China but the problem with China is
communication… so we decided to go to India.
W: how did you build your brand?
M: by… we built it with FCN.That is actually how we built it. We haven’t spent a lot of money
on brand building. So we can’t say that…
W: have a brand yet?
M: no. We don’t feel that… we kind of… it’s coming… slowly. We are not spending a lot of
money on brand building yet, because we also believe our brand will be associated with our
product and that’s what we spend our money so if we will built the product then the brand will
come eventually and that is a lot of people forget. It’s all about brand, brand, brand… Yeah but
don’t forget your product. The product will kinda reflect who you are… so that’s when you
people come and say “Oh, you look great in that suit, where you get that from? He says it’s
Mond, then we kinda build the brand …
M: Now that’s a good question. I would say… just I believe actually it is being nice to people. I
honestly believe that because… People like us. We are still the face of the company. People like
us and they come to… customer service is one thing but I’m saying being nice to people is a key
factor. Put in a more broader sense, not just costumer service, because customer service is not
everything but being nice to people has opened some amazing doors… and being generally
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9. What are the key success factors of your business?
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interested in people, be nice to people, because… even sometimes when we had a problem people
come to us and said “oh guys this is not good suit” and we had experienced that and we said “we
are really sorry we’ll make a new suit and we will pay your money back”. That is what we do.
We don’t want to take money from the customer that is not happy. And then he said “guys don’t
worry I like you guys”. It’s something that tells us being nice to people is agood way to make
money. Being nice to people and they’ll remember that. I don’t say we can’t be tough or anything
but just trying to be polite, be nice for the people is god way of building relationship, which
comes back to the network part of it.
W: are there any of the customers who become friends to you?
M: yes a lot of. We produce the good suit and they come back and say I want a new one. Some
people who waited a little bit longer, they come back and say we want a new suit. “We thought
you didn’t like?”, “no no no I like you guys, I know it is a little bit late, I read the article about
you in the newspaper and then I come back so that’s cool…
W: Besides buying suits, do they come to hang out?
M: It happens Sometimes people just dropped by, before when we were not this busy, Fridays
would normally be a day where we would have a beer or relax. But now we can’t do that.
W: do you think it is good to have very broad network?
M: I would say… This is actually not only from my experience, but from what I know, I went
when I was little bit younger actually studying at Niels Brock. I went to an internship in
undervisning, actually Niklas Canions business. The reason I went there was because he was
innovative young man and I wanted to learn from him and the best lesson I’ve learnt there was
that he built one business where he was setting kind of device for badminton players. He was
self-professional badminton player, so he knows everyone within that industry because of the
knowledge, because of his network in that industry, he made a huge success right away…
because he knows anyone here… made all decision he knew right away so of course he had great
business then started sell a business when got a good offer and he built a new business which was
education for kids. He didn’t know anyone and the business kinda tanked, but he spent two years
working in that industry, getting to know people. The funny thing is now he got offer from very
big company, but actually… they gave him a business…. He has to build in Denmark, which
Mentoring Denmark. Right now he is promoting mentoring in Denmark and now he knows all
the people from this industry because they work, did two years before, so network is crucial in
that way. If you want to build business you need to have the network. If I were to start over again
I would probably know more about accountants and attorneysand lawyers and all kinds of things.
Cause those are our prime target market… in the start. But you should remember we kinda switch
a little bit around now so we are not as much tight up to a specific industry, so I mean of course
we always be…an advantage… to know people but we are more pulling people in now
M: yes, exactly. So just a lesson I learned from that is network was everything and also that’s
why the first thing I did was to go out and searched all the business areas and find the
businesses, we built up quite a big network but it is also based on old business concept… it will
Appendix
W: you can always make friends or network with people in those industries later
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be stupid to say it is not necessary it is not true it is absolutely necessary, need people to talk
about it, maybe we be focus more getting famous people as a network… and actually quite of
our focus right now, because it draws and draws more people in that way. So it just kind of
change the network we are looking for… instead of being all business people of course, but the
real network we want is maybe the professional and the famous people
W: do you know any of them?
Appendix
M: yes. We have few friends of the house even and also some personal friends, family friends
actually…
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