Network Science and Startup Teams

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Essays

For those who study networks, weak ties are well-understood as holding the most value in interpersonal dynamics, and as indicators of success. One’s strong ties are the people they are close to, or know well. Weak-ties are the next ring of the circle — in LinkedIn’s words, ‘second-degree connections’. But in referring to theory about weak ties, we tend to think about it narrowly as “friends-of-friends” and stop there. I recently read this Forbes article about applied network science which pushed some of my thinking around weak ties and network science, and how it informs our thinking at Collaborative Fund. After some reflection, and hearing hundreds upon hundreds of startup pitches, I have come to believe that the best startup teams are those who manage the tension between these three characteristics: speedcreativity, and resilience. Homogeneous teams lead to speed, but diverse teams lead to creativity and resilience.

Speed
Max Levchin said that “The notion that diversity in an early team is good or important is completely wrong,” because the most important quality for a startup is speed, and diversity of thought creates dissent, which slows down idea generation and execution. This anecdotal perspective accords with the clustering aspects of a network. Strong teams work fast, and homogenous teams are likely to have the capacity to work faster than weaker teams. But most startups die because they run out of money. And plenty of the teams who ran out of money were building very fast. So while speed is likely a necessary condition for startups, it is not a sufficient condition. Because if you’re working on a problem nobody needs or wants, it doesn’t matter how quickly you build, or iterate. The Forbes article describes networks as sharing thick “clustering” characteristics, whereby there is a lot of mutual friendship within the network, and as a result, ideas flow very quickly within the network, but very slowly outside the networkThis approach creates blind spots. And if your early, homogenous team happens to be working in your collective blind spot, you might end up working on a problem nobody needs or wants. 

Creativity
UChicago Booth School of Business sociology and strategy professor Ron Burt discovered that weak ties are most powerful not simply because they extend one’s network, but because they introduce otherwise insular clusters to each other; they result in brokers who translate between these clusters, thereby introducing new ideas and radical collaboration, two key elements of design-thinking and creativity. Working in diverse teams creates brokerage between networks in ways that constantly expose blind spots, and give teams the opportunity to address them earlier than they would otherwise have been able.

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Resilience
Most startups die because run out of money. And, I bet, the rest of them die because of team disagreements. In his excellent book Antifragile, Naseem Taleb describes the phenomenon of those things which “gain from disorder”. Startup teams fit this criteria. Early disagreement, chaos and pain is highly common in the stories of most of the culture-defining startup companies. Diversity of perspectives, attitudes, and networks in the early stages of a startup enter it into the antifragile process earlier; this makes it harder to build quickly, perhaps, but it benefits companies in the long run.

At Collaborative Fund, our team is native speakers of Portuguese, Xhosa, Korean, Spanish, hail from all corners of the United States, and represent all manner of academic backgrounds. Our strongest founding teams are mashups of highly varied perspectives and demographics, and some of our favorite products are built particularly for under-considered demographics. I strongly feel that team diversity and multi-network access will be a huge asset to our portfolio in the long run.

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