The Role of Networks in Venture Creation among Irish Software Firms

This research explores how Irish SMEs, within the software industry, use networks to achieve objectives and commercialise emerging technology. Networks have many bases on which superior performance and profitability may be built. However, networks are not homogeneous. Heracleous and Murray have developed network typologies based on the dimensions of interdependence and durability, not only for classification purposes, but also to orient debates regarding the nature, potential motivations for and consequences of networks. To begin the research process, exploratory qualitative research was conducted with Irish software SMEs participating in various networks. This qualitative research took the form of unstructured in-depth interviews with senior executives in venture capital firms and other influencers within the industry (for example, business angels, government agencies) to examine their role in establishing and facilitating network structures. In particular, the role of venture capital firms is examined with respect to network creation and managing network structures among start-up firms. Venture capitalists often operate as brokers in building networks that facilitate their start-ups in gaining an advantage over competition. The findings from these interviews were used for the basis of semi-structured interviews with senior executives of software SMEs to explore the benefits and limitations to networks. The findings indicate that start-ups use networks in a variety of contexts and recognise their potential value in facilitating a start-ups success. The benefits accrued from network participation were reputational benefits by association, learning and informational advantages, as well as shared resources. Different types of networks were sought at distinct stages in a start-ups evolution and thus provide initial support for the developmental progression of networks.