Recent field experiments demonstrate that advice, mentorship, and feedback from randomly assigned peers improve entrepreneurial performance. These results raise a natural question: what is preventing entrepreneurs and managers from forming these peer connections themselves? We argue that entrepreneurs may be under-networked because they lack the necessary social skills—the ability to communicate effectively and interact collaboratively with new acquaintances—that allow them to match efficiently with knowledgeable peers. We use a field experiment in the context of a business training program to test if a short social skills training module improves who the participants choose to learn from within the program. We find that entrepreneurs who were exposed to the social skills training formed 50% more relationships with peers. These relationships exhibited more matching based on managerial skill and were more ethnically diverse. Finally, the training also substantially increased entrepreneurs’ business performance. Our findings suggest that social skills help entrepreneurs build relationships that create value for both themselves and their peers.
Entrepreneurial communication: sharing information, identifying complementary others, and sustaining communication. Performance outcomes.
The social skills training makes entrepreneurs perceive peer relationships as more collaborative and help them learn more from conversations with their peers. The social skills training also helps entrepreneurs build larger peer networks (50% more connections six weeks after the training) with more complementary and ethnically diverse peers. These improvements in entrepreneurs' social interactions lead to important improvements in business performance. Monthly profits of businesses owned by entrepreneurs who receive the social skills training increase by approximately 20% within the first year after the programme.