1.2 Activity 2
Key influences – family and friends
No man is an island
Entire of itself;
Every man is a piece of the continent,
A part of the main …
One of the persistent myths of entrepreneurship is of the lonely hero taking on the rest of the world. Though a few prominent entrepreneurs might appear to fit this mould, the reality is rather different. People often turn to those around them, including immediate family and trusted friends, for help and support – particularly in the early days of a new business venture. We have already seen an example of this in Fraser Doherty’s venture, ‘SuperJam’, which was inspired by his grandmother’s enthusiasm for making jam, and established with the enthusiastic support of his parents (Activity 1). Entrepreneurs use their informal networks to obtain a rich variety of resources. These include tangible resources, such as start-up capital and a place to store stock or equipment, and intangible resources, such as personal encouragement and advice. For example, the inexperienced owners of a new venture might gain much-needed credibility by recruiting a friend or relative with useful experience and a trustworthy reputation. We have been using the term ‘resource’, which suggests that networks always have a positive impact on a venture. But is there a downside to such relationships?
1. Listen to ‘Friends, family and fools: a help or a hindrance?’ byand note how the interviewees describe their experiences.
Transcript: Friends, family and fools: a help or a hindrance?
2. Make some notes addressing the following questions
- What do you see as the potential benefits of relying on family and friends?
- What kind of influence can family and friends exert on a new venture?
- What do you see as the main challenges that might arise?
3. Spend a few minutes thinking about your own informal networks, and imagine how you might draw upon those relationships to help in establishing a new entrepreneurial venture. Begin with your immediate contacts (friends, family and colleagues) and then try to identify any important indirect contacts that you might have through these individuals (for example your friend’s brother, partner or employer). How might you make use of these connections, and what issues do you see arising?
Family businesses raise some interesting questions about the entrepreneurial personality and how it is formed. There are many examples suggesting that entrepreneurial careers are often prompted by the example of older relatives and that many of the key decisions in a growing venture are influenced, either directly or indirectly, by family and friends. Members of a person’s informal network can be a source of great support, particularly in the early years of a new business. However, as indicated in ‘Friends, family and fools: a help or a hindrance?’ they can also create serious challenges such as internal rivalries, conflicts of interest and other tensions. These issues need to be sensitively managed if you want the venture and the personal relationships to survive. There are also important ethical issues to consider. These become clearer if you consider the position of the other people involved – the elderly aunt who is persuaded to provide funding out of her retirement savings, or the friend who agrees to give up a well-paid job in return for the promise of a stake in the new venture. It is worth considering how entrepreneurs might do harm as they ‘exploit’ their networks, and how these negative outcomes might be avoided.
For the final part of this activity, you were asked to think about your own informal network. In practice, our personal networks change over time, with new connections being made and strengthened, while others are lost or weakened. You may find it useful to reflect on these changes, both in your own network and in those described in the accounts of the many entrepreneurs that we will encounter during the course. Much of this change is due to changing circumstances (e.g. moving house, starting a new job, enrolling on a course), but it is also evident that some people are particularly adept at manipulating their networks in order to pursue their entrepreneurial aims.
In the final activity we return to the questions ‘What does it mean to act entrepreneurially and to be an entrepreneur?’ ‘How are entrepreneurs perceived by other people?’ and ‘How do they represent themselves?’