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Dr. Rembrand Koning

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 the number and complementarity of peers that participants choose to learn from. 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 increased entrepreneurs’ monthly profits by approximately 20%. Our findings suggest that social skills help entrepreneurs build relationships that create value for both themselves and their peers.