Beyond social capital: How social skills can enhance entrepreneurs' success

Executive Overview Why are some entrepreneurs so much more successful than others in starting new ventures? Previous efforts to answer this question have generally focused either on the personality traits or susceptibility to various cognitive errors of individual entrepreneurs or on such external factors as the number of competing businesses. We suggest that entrepreneurs' social skills—specific competencies that help them interact effectively with others—may also play a role in their success. A high level of social capital, built on a favorable reputation, relevant previous experience, and direct personal contacts, often assists entrepreneurs in gaining access to venture capitalists, potential customers, and others. Once such access is gained, the nature of the entrepreneurs' face-to-face interactions can strongly influence their success. Specific social skills, such as the ability to read others accurately, make favorable first impressions, adapt to a wide range of social situations, and be persuasive, can influence the quality of these interactions. Moreover, by helping entrepreneurs expand their personal networks, social skills may also contribute to their social capital. Because social skills can readily be enhanced through appropriate training, entrepreneurs who take advantage of such opportunities may reap important benefits.